Interview: Singapore needs new mindset to be an innovation hot spot
Deputy PM Teo on what makes the state competitive -- and what needs to change
SINGAPORE To prosper as an international hub, Singapore needs a change of mindset, according to Deputy Prime Minister Teo Chee Hean, who also sees "many opportunities" to work with China as its enters a new phase of growth.
Teo, who also serves as coordinating minister for national security and chairman of the National Research Foundation, told the Nikkei Asian Review that Singaporeans must take more risks and be prepared to fail -- and then try again.
What advantages does Singapore have and what challenges does it face as it navigates an increasingly complex economic environment? We are well-located in the middle of a very vibrant region. We have to make good use of the geography we have. Some of the basic factors that make Singapore a reasonably attractive place to do business remain the same. This includes political stability, policy continuity, a welcoming business environment, good infrastructure and also a strong focus on education, modern skills and technology.
But we are at an inflection point. We have developed very rapidly over the last five decades and many countries are moving into competitive spaces which we are strong in. We are looking for a new basis for competitiveness. There are basically three main thrusts to this: RIE -- research, innovation and enterprise -- industry transformation and the "Smart Nation" initiative.
Can you talk about Singapore's strategy to become a hub of knowledge and innovation? I believe that there will be key hubs in the world which will largely be based on knowledge and connectivity, and these key hubs will develop and become very vibrant, exciting places to work and live in. You can see some of them already exist. We hope to be one of these hubs. We have some strength already in terms of connectivity, knowledge creation and use, and, most importantly, in terms of trust because, for example, if you want to have knowledge creation, innovation and enterprise, intellectual property protection and trust in that area will be key. Based on such strength, we hope to play a role in complementing other such knowledge and innovation hubs around the world.
What internal changes must Singapore make in order become an innovation hub? Singaporeans are not sufficiently risk-taking, because our economy has done well and has created many good jobs in the professions, [at] large companies and so on. The risk appetite of Singaporeans may need to be increased. They need to be prepared to take risks, to be prepared to fail or not succeed and try again. We need a new mindset. But I think we do see that among a good number of our younger people.
That could lead to greater disparity between those who succeed and those who do not. How will Singapore harmonize its growth strategy with social stability? One of the things we are focused on in Singapore is retraining and skills upgrading. We have achieved mass tertiary education, as other countries have as well. The next frontier is mass continuing education. I think that there are no models in the world for mass continuing education.
Technology cycles are much faster. Skills transition are faster than the average working life. Now, a person's working life may be longer than companies' [lifespans]. So the structure has changed in the working environment and, therefore, the nature of work [has changed]. The necessity for retraining and continuing education is much more important today. That's a very important part of the transformation that needs to take place.
The recent feud within the Lee family drew international attention. Do you think the incident hurt Singapore's reputation as a merit-based society? I think that the discussion on this issue reinforces Singapore's belief in meritocracy and in fact shows the resilience of Singapore's institutions and the political value system. So I would say that yes, there is possibly some short-term questions. I would say that the discussions that have taken place -- very open, frank discussions that took place in parliament -- gave the issues very open airing, which actually demonstrates resilience and strength in the Singapore system. As I said in parliament, we can rise above this, and we have.
On the international front, how has China's rise affected Singapore? How do you maintain a balance between economic ties with China and national security? China's rise is a positive thing for the Asia-Pacific and the world. It has brought hundreds of millions of people out of poverty and created new wealth and opportunities for all the countries who trade with China. And China itself is at an inflection point of its development. Its workforce has essentially stopped growing. That is one of the challenges which I think the leadership in China is very aware of, and they are taking steps to deal with it. In that sense, there are many opportunities to continue to work with China into its new phase of its growth.
We don't have any national security issues with China. We don't have territorial disputes of any kind with China. The Asia-Pacific is big enough for all of us. We should see a cooperative relationship, an open and inclusive architecture in this part of the world. Security is fundamental for stability and growth. Without peace, we don't have stability and it is very difficult to have economic growth and prosperity.
If we take an appropriate and correct perspective to both security and economics, I don't see a conflict between these two, because both are open and inclusive architectures that are complementary and can contribute to peace, stability and growth for the people in the region.
With the U.S. withdrawing from the Trans-Pacific Partnership, the Regional Comprehensive Economic Partnership, led by China, is gaining traction. What is your position? Negotiations for the TPP and RCEP had been proceeding already in parallel. I don't see the two of them as being mutually exclusive to each other. I see both of them as building blocks to an eventual free trade area of the Asia-Pacific.
The starting points are different. Therefore the dynamics of the negotiations are different. I would say that each of them has advantages and each of them can play useful roles in moving towards our final aspiration of a free trade area.
Interviewed by Nikkei staff writer Takashi Nakano