What is stopping the next generation of Singaporeans from becoming entrepreneurs?

A new survey comparing youthful entrepreneurs across the world has many positives as well as many negatives for Singapore to think about.

The main findings of the survey says that young Singaporeans believe that being an entrepreneur has less status than working in a bank, for example, and that they are much less likely to become entrepreneurs than all the other countries. Only 11.6% compared with Brazil and the US’s 25%.

This despite the World Bank saying that Singapore is the easiest place in the world to do business two years running. There are various other bodies of opinion that says that those most likely to succeed will usually have left home at 18.

Is this why Singaporeans are less likely to be entrepreneurs than in any other countries such as the UK or US, for example, where it is commonplace? Too much security, too many home comforts, too much risk?

When it comes to being a nascent entrepreneur, Singapore actually leaps to 3^rd ahead of the UK and behind the US and China. This is defined as creating a start-up that does not pay its staff. I would actually put this down to young Singaporeans living at home with their parents until their thirties unlike those in the UK.

No worries about costs is a strong incentive to get out there and create your own business. I am actually surprised that this is not higher given this fact and the US where this is not custom is actually on top, however that probably comes down to the US being a more natural entrepreneurial nation.

There are many benefits for young Singaporeans or in fact Permanent Residents to become an entrepreneur in Singapore. These include:

1) funding – there are many Government and non-Government forms of financial aid to help foster a more entrepreneurial nation

2) the Government itself is very pro-business, some would say too much but for an entrepreneur this is a very positive thing

3) education and training – Singaporean is famous for the amount of students gaining degrees and higher education qualifications, (some again would say too much given the emphasis of theory over experience but) nevertheless not being properly educated is not an excuse that can be used in this content

4) infrastructure is fantastic, everything is here for you, so the question really is why are there not more budding entrepreneurs in Singapore?   

In doing some research on this subject for this article I talked to various Singaporean and non-Singaporean entrepreneurs who were all based in Singapore. Ironically the Singaporean entrepreneurs I talked to complained more passionately about the lack of drive and enterprise from young Singaporeans than the international entrepreneurs.

The latter just complained about the difficulties in employing staff and recruiting in general for SME’s in Singapore. This is something that will get worse once the new Job Bank website comes into force in August which will ensure that all jobs under $12k are posted here first and in effect imposing a Singapore first policy on everyone.

Any employer just wants to employ the best person for the job, not be forced to interview unqualified people just because they feel they need to due to their country of their passport (I would say birth but many people born in Singapore are not actually Singaporean – see earlier blog on the subject).

It is expected that children in Singapore live at home until they get married and even after they get married which can be late 30’s or early 40’s. Does this stunt the Singaporean entrepreneurial drive?

There is no risk of failure, no drive out of necessity as there is in other countries where there is no safety net of a home. On the other hand there is no benefits system in Singapore as there is in many Western countries which is also a safety net of sorts.

Some countries in Europe like Italy, for example, produces less entrepreneurs than the UK because they too have a culture of children living with their families until late 20’s/early 30’s. Has this adversely affected Italian economy as many believe a similar culture in Singapore effects the number of Singaporean entrepreneurs plying their trade?

Interestingly Singaporean entrepreneurs in the survey are the most ambitious when it comes to employing staff. I worry that this is so that they don’t have to do the work themselves and they have a team to do it for them as is often the complaint of SME owners in Singapore.

Nevertheless young Singaporeans were top of the survey’s results when it comes to planning to employ 6-19 people and 20+ and bottom when it comes to creating less than 5 jobs.

Singapore comes out almost bottom and bottom when it comes to the question on whether being an entrepreneur is a good career choice and whether it has a high status respectively. This is pretty shocking and really needs to be looked at by the Government in terms of making entrepreneurialism a sexy thing to be doing in Singapore.

There is too much cache placed on working for a bank here (ironically when the rest of the world treats bankers with less respect, Singaporeans see the profession as having higher status – quite possibly because none of the Singaporean banks went down or had to be rescued in the GFA unlike every other country in the survey, for example).

44% of Singaporeans think that the fear of failure prevents start-ups. Almost 50% more than young people in China or Brazil who appear to be more gung-ho and not care about the consequences. You could say that this was a cultural thing, loss of face, but that would also include China and it doesn’t appear to have put the young Chinese off.

Interestingly the most innovative country is actually France. 40% of the French youth believe that they have created a new product or service almost double that of young Singaporeans.  

When I am talking about entrepreneurs here, I am not just talking about people freelancing or not having 9-5 jobs and doing a project here or there. I am talking about coming up with a unique business idea, disrupting the business landscape, and building a commercially successful enterprise.

Interestingly in a research paper called Purpose by Emerald Group Publishing sought to identify the cultural obstacles or what discourages the setting-up of businesses among Singaporeans, they concluded that:

Findings – Four obstacles: being over-compliant, too left-brained, over-pampered, and afraid of failing, are identified. They are assessed as stemming from two key trends: chiefly, a safe, orderly, and affluent society and Singapore Government's father-leadership style.

Practical implications – The paper implies the need for several cultural changes: Singaporeans can be more entrepreneurial by taking a paradigm shift, adopting the “backpack mentality”; embracing globalised thinking and networking; and tapping the melting-pot edge.

This survey appears to have found similar findings to the one I have mentioned at the beginning of this article. The concerning thing is that this paper was published in 2006. Has much changed?

The survey I have based much of this article on was created by GEM, the Global Entrepreneurship Monitor, who questioned 2,000 18-34 year olds in Singapore, the UK, the US, Germany, France, Brazil, the Netherlands, and China in 2013.