There has been much talk about the “Singapore Model”. The West has long equated economic development with the free market ideology and liberal democracy. To the West, the “Singapore model” is characterised by the unorthodox exchange of political freedoms in return for economic wealth, as promised by the state.
Critics of this model argue that Singapore is really a company disguised as a country, labelling it “Singapore Inc.” But are they right? Is there something truly magical about this model that has put this little red dot on the world map
In the beginning
Singapore, a fledgling ex-British colony was thrust into nationhood right in the midst of an escalating Cold war in 1965. Half the world believed that the common good was best served by state planning while the other, the embrace of fundamental freedoms in economic and political processes. Endowed with neither natural resources nor the assured protection of its colonial masters, the nation’s leaders architected a hybrid model using the only resource available– humans.
This model, guided by a single political party, avoided all the trappings of petty political squabbling and focused all energies to carving out a defensible position in the global market place. It pioneered social mechanisms like a state-pension fund, which provided a means of affordable financing to incubate its state-driven industries.
The founding fathers of Singapore also borrowed the Chinese “imperial scholar” model to recruit and manage talent. The brightest of the cohort would be selected and heavily invested educationally (in the universities around). Upon their return, they would be managed with a careful mix of incentives (monetary, fast-tracked careers) and disincentives (career stagnation). It is worthwhile bearing in mind that this is a system that evolved out of many years for managing a largely closed subcontinent, where talent had few better alternatives outside the system.
Realities of the New World
Epochs in history have been marked by seemingly small changes in technology that resulted in changes in large social order in the years that followed. While the Singapore model has coped well with Industrialisation, less can be said for its effectiveness in the Information age today. Like the Railroad that came before it, the Information Revolution changes the boundaries of the market imagination.
The boundaries for the first time in history are truly global. The implication of this is that a small producer in a remote town in Asia will have to compete “with everyone for everything” , and produce a product which the market would pay for, even if it just services its specific locality. More importantly, it turns the comfortable confines of the insides of a closed system into the uncertainty of an open system where competition can come possibly from anywhere. And the full spillover impacts of these developments are still left to be seen.
Knowledge will be the key factor of production in the new age – and the ability to attract, create and apply knowledge will be a cornerstone sustainable success in the long run of any company or country . Some have termed this the advent of a “post-capitalist society”, a world where capital does not exploit labour in the traditional sense, but rather – exists to make knowledge effective. The welfare state and the labour union were both institutions born to cope with such a world where capital exploits labour – neither has faired very well in recent times in the wake of Globalisation.
Where pension funds, managed by professional managers are now the largest sources of Capital – Knowledge comes to the table at least as an equal. It is already industrial orthoxy that the value of knowledge workforces on companies’ balance sheets are quickly becoming their biggest assets – in fact, they are quickly becoming the only differentiating assets in the long run – because we live in a world of excess capital. And the failure to manage knowledge workforces well quickly shows up in increased costs, lowered productivity and decreased competitiveness.
Growth at all cost – how long can it last?
The Singapore model has long assumed that growth driven by an elite class was the only way to move forward, if not to survive. And for a long time, the assumption was probably accurate enough to be sound operationally. We have come to implicitly accept the need for inequality in our social compact to defend our economic interests. In fact, a closer look at our institutions will show that our model is a well-oiled machine designed to optimize our efficiency in competing in global markets.
However, the price of getting the assumptions wrong can be very high, a liability to be serviced by the future generations of our country. And there are already tangible signs of systemic dysfunction caused by our “market-based” mentality – rising cost of living and income inequality, increasing levels of immigration, and more intangible areas like the erosion of identity.
If one accepts that the ability to attract, create and apply knowledge will be a cornerstone sustainable success, we just might just have to concede that our business model, for the lack of a more appropriate word, is outdated. If knowledge is the be-all and end-all in this age – it would follow that all social and governance institutions should all be aligned to this end.
Structurally, a polity which asks a large part of society to outsource its agency and independent thought to a higher authority is structurally incompatible with an economy where questioning creates new value. An education system which puts children through laborious rigour and selection is both detrimental to creativity as it is demeaning to self worth – and ineffective for training the faculties that create bold ideas that change the world.
A HDB flat which is paid for upfront with a 30-year financing option doesn’t create the incentive to participate in the economy – it lowers the ability to bear risk through entrepreneurship. And the pursuit of an industrial strategy through importing of talent rather than growing from within is both more expensive as it is risky. What if the investments in foreign integration fail for any multitude of reasons?
It’s perhaps not that we’re not doing things right – we might just not doing the right things altogether. The irony of staring at the Singapore model is not only that the model which brought Singapore to its current status might work any longer, but it might be the very thing that is holding the country back. Maybe we have been aiming at the wrong goal all this while.
In his maiden parliamentary speech, Nominated MP Viswa Sadasivan stressed:
“Traditional thinking would suggest that prosperity, defined usually in economic terms, is the cause and happiness is the effect. Now, with research showing that happy people are more productive and driven and therefore have a higher potential for career success, it may make sense for us to pursue happiness as a necessary condition for sustainable economic success. Naturally, this is counter-intuitive but if we are prepared to think out of the box, it may just make sense…”
It should be the hope of many that this generation of Singaporeans inherit not just the past solutions formulated in bygone eras to face today’s realities. More importantly, they should wield with the bold spirit of invention that created them in the first place.
References:
- Chapter 1, Drucker, Peter F. “Managing in the Next Society”, Griffin Publishers
- Friedman, Thomas (2005), “The World is Flat: A Brief History of the Twenty-first Century”, Picador
- Drucker, Peter F. (1993), “The Post-Capitalist Society”, Butterworth-Heinmann
- Florida, Richard (2003), “Rise of the Creative Class”, Basic Books
SingaShadow
post #52 on September 27th, 2009 8.18 am
////This, of course, puts pressure on people to upgrade so that they can command a higher paying job. What you should be concerned with is change, rather than immigrants per se.////
so what about people who have “upgraded” their skills to stay relevent to a new economic reality but are “forced” to accept a lower salary?
example like how PMETs who undergo retraining to be retail staff, security guards, etc. most which do not pay a salary more or equal to their previous jobs…
This was a really good article by Ian Choo.
More importantly, he has articulated developments that are indeed already happening because the issues are definately of concern to people here in Singapore. Thanks for writing it.
There lies opportunity for Singapore to re-invent itself again to be the example of a more localized, self sufficient place that would indeed use the happiness index as a measure………..If only certain policy makers could think outside of the box.
The greatest tragedy for me would be that if Singapore were to not take advantage of the many wonderful Singapore-born ideas out there.
We have ALL the ideas the country needs and wants to be the best it can possibly be.
I really enjoy TOC because I am only a visitor to Singapore now that I’ve emmigrated.
It provides a lot of honest feedback and expands on a lot of the issues I hear Singaporeans talking about when I visit here.
Cool posts too Robox. I did not know much about those topics you discussed about. Damn informative and in-depth.
I believe your #31 post was posted and thus maintained the sequence you were hoping for because that’s how I read it from.
I’m quite new here too but look forward to reading more of your future posts.
Just over the weekend, I saw a documentary which depicts the story of modern HongKongers in today’s society living in “cage apartments” all the size probably our single bed measurement because of the great divide between the rich and the poor.
At HBD being close to $350k on average with upcoming projects aiming at the whopping price of $700K per unit, coupled with the influx of FTs per year, very soon will Singapore follows the footstep of today’s HongKong, even though it has a per capital growth higher that Switzerland and host 19 billionaires! Simple logic of supply and demand really.. Very soon, only capable Singaporeans able to afford and sustain an apartment, leaving many others straggling behind with little governmental assists.
The Singapore Model that took us from Third World to First in four decades was based on the citizenry obedience to an I-know-best Government. Evidently, it has worked – we are all beneficiaries of it. We Singaporeans have enjoyed one of the most dramatic rise in standard of living in human history.
However, I agree that the old model is diminishing in relevance due to 1) the rise of China, India and our ASEAN Neighbours, 2) world change due to increased connectivity driven by technology, and 3) the increased affluence of a generation of Singaporeans whose new aspirations demand to be fulfilled.
The article by Ian is an eloquent piece. It has captured the issues at hand well and outlines accurately the challenges Singapore faces. From the replies in this page, I am heartened that many Singaporeans are concerned about where this nation is heading, and not just decide to cut and run.
I believe this discussion will be more constructive if we discuss solutions, and find ways for our voice to be heard. Lets talk about what we think the new Singapore Model should be. Let us discuss how we can engage the decision-makers. We must also not neglect the profound changes in our national policies which has greatly increased the support for the creative industries; and has taken a considerable gamble in investing heavily into biomedical R&D and allowing the building of the two IRs. But are these measures enough? What more does it take?…
Zheng…………..
Top notch suggestion :)
There are good brains on this thread.
Hardly anyone will see it though; only the few who have posted on this thread.
I’m keen to discuss solutions.
Might as well start off…………..people can fill in the gaps and add their bits.
Outline what outcomes and the ideas to get you those outcomes
Singapore’s Growth model needs to be more self-sufficient.
Less reliant on external economies for the majority of it GDP.
If Singapore’s products such as home grown Intellectual Property and Bio-medical R&D are of World-class quality and demanded by other countries…………Great :)
Singapore could aim to provide as much of their own food as possible.
The country could start growing vertical gardens in building shells using stronger concrete. I know that the technology is there and the IP owners want to do this in SE Asia.
Singapore should also aim to be the pre-eminent leader in recycling and upcycling because for such a small country, Singapore creates more waste per capita than any other country.
Being such a busy port, Singapore could also be an important retroffiting sight for new ballast systems that prevent having to dump ballast from ships.
Again this technology exists. There are also emissions extraction systems that have Singapore IP attached to them.
The world is changing and needs a country that can demonstrate adaption to a more carbon restrained economy. As Singaporean policy can implement action as fast as any other country, Singapore should aim to become a leader in translating innovation into Economic opportunity, that is sustainable and benefits the well-being of the people.
Does anyone else feel the same?
nemo here is the singapore model no 2