MTI Dialogue Session (all posts)

Question: I joined NUS and there were lots of PRCs. This was the last thing I wanted to see, since I am from China.

I feel bad because a few days after joining NUS, I heard PRCs talking on the bus about how to break their bonds. It made me feel sick.

I've studied in Singapore for 8 years, 4 in ACS, and am grateful. I can't make promises but I'll come back and contribute if I can.

I ask my friends why they want to leave and they say they cannot fit into the culture so they just come here for a university education. Doing projects with Singaporeans, I find they're too conservative and hold back. They don't like to mix with foreigners so we should mix with them more.

With the rise of China and India I am reminded of a Credit-Suisse advertisement: "not competition but partnerships". It's not a Zero Sum Game.

I am jealous of Singapore because the government pays locals to go to China and India for internships. You don't see this happening in China and India.

Manufacturing is 27% of Singapore's economy now. In 5 years which sector will dominate and how do you decide?

Answer: Overseas students come here with the view that they should just study and go back. We have the home ground advantage so we are obliged to make the first move.

We want to keep manufacturing because it provides jobs, and more jobs than services, due to the fixed investment multiplier (?). We want to attract high end manufacturing. eg Semi-conductors - we don't just do wafer fabrication now but wafer coating (to improve conductivity and reduce heat). Shell's cracker is high end and a huge uinvestment. We also are looking into environment and water and finance.

We're trying to avoid hollowing out like Hong Kong, which has only services now. We need balance.

Question: Since you're promoting finance should we all go study Business?

China and India are cheaper for the lower end so how do we compete?

Answer: I've yet to meet an MNC which says it does all its business in one country. You need to diversify risk and secondary locations also give flexibility.

For high end jobs, in India and China they're paid on a world scale - in Shanghai the pay is just slightly discounted from New York/London salaries. The cost differential is not that much. Major cities are very tight with respect to labour. Meanwhile it's tricky to relocate outside Shanghai.

This is also happening in Bangalore with IT professionals; in 5-10 years it won't be cost differentials anymore.

Not everyone should do business because a lot of people who're engineers by training go into finance. Humanities people too. You need some direction in your degree without being too rigid, and get portable skills.


Ending of the dialogue session: Be optimistic, but not complacent.

MTI Dialogue Session (all posts)

Question: The arts scene has blown up. Local talent is more recognised. 5 years ago no one knew about the Necessary Stage. The Esplanade is a world space.

How about architecture? We keep depending on foreign architecture. Global architects can't do a good job because they don't understand our culture.

Answer: Foreign architects have a limited appreciation of local conditions. Europeans like high ceilings since they're cool, but with thunderstorms if you have a linkway with a high ceiling, it's not good for shelter.

The IR design by Frank Gary who did Bilbao was thought fantastic by aficionados. Someone said it looked like crumpled tissue paper. Genting is getting Robert Grays, a European with an understated style. Some people found it boring.

We can't force private companies to hire locals. Branding is chosen by the company. 'Scenic architecture' needs scenic architects. Locals can't do it.

'Architecture is like art. 2 guys draw a blotch. One guy is a famous artist. it's great. Another guy, it's rubbish.'

Singaporean architecture is HDB architecture, because that's our langscape. Our architecture is not imaginative, because people want to maximise plot ratios and the most efficient way to do that is to build a box. Circles are a waste of space. Bangkok has funny designs, but they waste space from a developer's point of view.

The challenge is to educate developers here. The government is trying to use locals, eg For Marina South international architects do most of the work but one portion is reserved for locals, so they can show what they can do.

Question: The real estate industry is booming. Property prices are rising. Speculaton is inevitable, but now there's speculation in mid-level condos. When is speculation too much?

Answer: Speculation is not a bad work. When people buy and sell in the stock market we call it liquidity and it's a good thing.

It's hard to only sell to Singaporeans. Speculation is not done in middle-range condos but Marina Bay types. There's market segmentation - District 9, 10 and 11, Sentosa Cove and Marina properties go for $3000/sq ft. In the middle tier, people buy to live and the base tier is HDB. For some people it's a good sign.

Hong Kong prices have risen 10-15% per year. Singapore is flattish. Now we have stamp duty upfront to cool the market a bit but not too much.

What indicators do we use to know when to step in? We have them but we can't say, since that'd defeat the point if the speculators knew.

Question: Why don't we focus on Africa and South America? Africa is high risk, but during the IMF, Africans were distributing brochures about their untapped markets.

Answer: Small companies and businesses are stretched to their limits; just covering China and India, they're finished.

You don't just deploy people - you need to understand the market and work on the ground so trading will be easier.

Latin America is far away and there's not enough activity to justify anything. There're some Singaporean firms in Brazil and there's an effort to cross barriers. Africa has risk but there're interesting spots like Algeria and South Africa. There's a need to target markets with opportunities. It's not the government's job.

MTI Dialogue Session (all posts)

Question (from a NOC person): 1/3 of NOC (NUS Overseas Colleges) people were foreigners, and once they arrived in the foreign country they just went to get the jobs there. They weren't interested in networking sessions. The money spent on them was not worth it.

We select people for such programs based on capabilities, but ultimately we want to get value for the money we spent.

Answer: We shouldn't take the attitude: 'You studied here, so you must be beholden to us for the rest of your life'. It's a free world - if you offer a good job, good, smart people will come. Good, smart people don't like to be dictated to. You must win their hearts and minds.

Don't look at it in a negative way. Some will choose to stay in Singapore, others will work here for a while and move on, adding value while they're here. It rankles to know that there're those who use Singapore as a stepping stone, but if they study here for 4 years, they'll have a small part of Singapore in them always. If you network with them, hopefully they will have good feelings for Singapore.

Interjection: We don't want to tie them down, but we give them the money and opportunities and they just hide in their room surfing the Internet and studying, and don't get involved.

Answer: It depends on their personality and character: some local students also just hide in their room surfing the Internet and studying, and don't get involved.

Point of information: Re: the previous point, the NOC director said that most NOC people who become entrepreneurs are foreigners.

Question (from a NOC person): I'm not Singaporean. I've mixed experiences: some of my foreigner friends feel for Singapore. I feel strongly for Singapore because I interact with locals. If I didn't mix with them, I wouldn't feel for Singapore. You need to pull them in.

[Ed: If you import foreigners from specific countries by the truckload, they can form their own ecosystems and won't interact with locals.]

Answer: Merging tensions (?). You should make an effort to interact with foreign students. What may appear to be aloofness/arrogance may be lack of confidence or language facility.

If you go overseas you'll be in a small minority so it's hard to reach out. The best entrepreneurial adventures are cross-cultural, eg YouTube.

Question: 80% of Music is made of foreigners, mostly from the PRC. We've many patrons and sponsors and most students are on scholarships. We have amazing facilities.

Many students want to go overseas to study. There aren't many music job opportunities in Singapore. I'm not sure I'd want to stay here. What is Singapore doing to try to support art?

Answer: The Arts are a vital component in a vibrant city. But you've to attract all the people. We don't have a long tradition of the Arts, because we've only recently come into affluence. Now we have the institutions - music and art schools.

The demand for the Arts is increasing, but I'm not sure if we can offer an environment for world-class pianists to stay here. It takes time to evolve. Top pianists like Lang Lang are based in Boston. Some centres in the world are huge arts magnets - we're far behind, unless world class people choose to come here.

Our culture is improving but we've not punctured through to a world class event yet. We need to take time to grow. We need to get Asian and ASEAN talent to become, at least, a regional centre.

Question: Are we becoming a global city of borrowed art, bringing in famous world culture? What happened to the local brand? Few Singaporeans appreciate local art.

Answer: The London arts scene is not just the West End, and New York not just Broadway. There're many community theatre clubs. The local scene here is pretty good. The Dim Sum Dollies are very good.

We always need some global productions. If we produce something Uniquely Singapore, it may not travel globally. But if it's Singaporean but with a universal theme, it will fly (that's how world famous acts succeed - they have universal appeal).

Our older writers like Catherine Lim and Gopal Baratham write with Singaporean themes, local contexts and local subtexts, but the younger ones have universal appeal. Even if the stories are in HDB estates, people overseas will be able to relate to them. The Necessary Stage is doing a lot today.

There may not be formal learning in the arts scene, but there's passion.

MTI Dialogue Session (all posts)

Question: With the drive to life sciences, there are more people coming into the industry. The quota for doctors has been increased also. Do we need so many doctors in Singapore? More doctors will lower healthcare costs [Ed: Isn't that a good thing?]. For every doctor who goes into research, there'll be 4 GPs, and there're so many GPs in Singapore. Many of my peers have no interest in research since there's no money in it and they have no interest in academia.

What is your vision for the life science industry?

Answer: In terms of doctors per population we are far behind developed countries. The increase shouldn't be in GPs. Our medical professionals are organised the wrong way - in 1 and 2 man clinics. This is a traditional and old fashioned style. They need to go into group practice and reap economies of scale, with clinics in several locations, and add more value. Australia and the US have few 1 and 2 man clinics.

Geriatric medicine is a growing market in Singapore with an aging population but few specialise in it. People travel here for medical services. They don't travel to India even though dental filling is 95% cheaper there than in the US.

In Singapore, cataract surgery costs $3,000. In Bolehland it costs $1,500 - $2,000. In India it costs $400-500 and in Bangkok it's a similar price. People remove cataracts, go for a holiday and then return home.

So doctors should go for specialization, but Singapore is very restricted - very few are allowed to specialize. Specialization allows differentiation.

Our vision? Vision's an elusive word, but we want to generate buzz, a hive of activity. eg Clinical trials and the discovery of new therapies. Phase I testing is for toxicity and involves 50-100 people. Phase II is for efficiency and Phase III involves thousands of people. We're in a good position for Phases I and II. Asia has 3 billion people and genetic diversity so carrying out Phase III testing there is a good idea.

(My) Question: Much foreign talent uses Singapore as a stepping stone to move onto other countries, and after using us they screw us. In NUS, their depressing of the bell curve causes resentment in Science, Engineering and Computing.

Answer: In the university context, are opportunities curtailed? If you're a local student who meets the cutoff, you can go to university. If you have financial restrictions, we can help. Is the University better or worse off with diversity? I studied in Harvard and learned more since in a class of 40 people there were people from 30 different countries.

Interjection: Diversity is good, but people say 25% of engineering is composed of PRCs. In a class of 40 people we may have people from 3 countries - Singapore, China and Vietnam.

Answer: Vibrance and diversity is brought in by foreign talent, and the context that people from other countries bring is good. Today they depress the bell curve but tomorrow they can be useful contacts.

You can't be naive in university grading. When we compete it's global competition, especially if you join a global company. [Ed: It is a false dichotomy between sponsoring PRCs for 25% of engineering and having no competition. Oddly too, this is at odds with the stated philosophy of streaming.] You need a sense of realism. If a company wants to employ foreign talent when setting up in Singapore but we say they must only hire locals, they may not invest here. The challenge is to find balance.

I've heard feedback before that PRCs are not interested in the others. The point is cross-fertilisation. It's less of a problem if there's interaction.

Private banking likes to come to Singapore not only because we speak English, are numerate and learn well, but because we can deal with different cultures easily. Singaporeans have multicultural instincts, as opposed to Shanghai which is monocultural.

Question: To give Singaporeans exposure, why not just send more overseas on scholarships. eg A*Star gives them only to the top few people and the Chairman, before his depature, wanted to attract PRCs. Why not give Singaporeans the opportunities to go overseas?

Answer: If you have the ability, nothing is holding you back.

Interjection: My first choice was medicine and I was offered a place at Johns Hopkins, but NUS medicine rejected me twice.

Answer: A*Star aims to groom a pool of PhD level people to develop a research ecosystem. "Like everything in Singapore we're trying to do it fast, but PhDs take 6 years to cook" They must be Singaporean because of the investment of public funds, so we make them commit.

There's a limit to what government can do because it uses public funds and there're competing uses for the money.

Local tertiary institutions are now increasing overseas experience (SEP, NOC) and this is good. The private sector has to pick up.

MTI Dialogue Session (all posts)

Question: The government needs to support startups, by providing lnks and support and by faciliating efforts to tap regional markets. Local SMEs can be supported and turned into a pillar of the economy to create jobs for locals.

Answer: In the first ten years the government [can support startups? my notes weren't clear], in the next ten years the private sector.

"The business of government is not about being in business"

The government should only intervene if there's market failure. The government should not get too involved since it will complicate life.

In the area of facilitation he agreed. Startups have special needs - seed money, hooking up with VCs and acquiring A*Star technology for use. SMEs meanwhile need financing and expansion into other markets, which is where IE Singapore comes into the picture.

Manpower is a common problem. Most people want to work for big companies, since smaller companies have no capacity to pay, and they stand the chance of ruin, and people are risk averse.

The only relationship big companies have with the government is lobbying: "I've yet to meet a businessman who is satisfied, so I guess we're doing the right thing."

Question: To what extent is government support a liability? It identifies engineering and bio-science and people rush into those fields and there's a brain drain from others. Now, it's targeting tourism and high end properties (the IRs). If it works, everyone will go into these fields, and there's a cottage industry of polytechnic courses. It's only a matter of time before NUS comes up with a tourism degree. If it doesn't work, it's even worse - Macau has >12 casinos.

Answer: Macau has a different product and appeals to a different sector of the market. People only go there to gamble. Gambling revenue in Macau exceeds Las Vegas. When people go to Las Vegas they want to see a show or visit the Grand Canyon, but for Macau they fly there on a low cost carrier on Friday night, gamble, then go to sleep. The next they gamble the whole day and go to sleep again, and they fly home on Sunday night. Our objective is to offer all-round entertainment and recreation. Sentosa is for families and Sands for business travellers, meetings and conventions. Singapore is to be a "World Class Premier Destination", a city with many things to do.

Brain drain is not a problem because people move to where opportunities are. There are few vocations where you start and finish in the same career. Medicine is one. Law is another but it's changing. In other areas there're big variations, so what's important is getting good training. SMU offers one management track with international trading.

Question: In Singapore there's governmental initiation of opportunity, but in Hong Kong banking and finance are strong because they take a hands-off approach, and we're second to Hong Kong in financial freedom. We point to growth sectors when we should deregulate and let people go in.

Answer: Pointing to an area is not the same as regulating, but rather creating the environment.

The IRs can be a flop, but the government got private investors to come and there was strong interest from credible international investors. Some people say Hong Kong is governed by a small group of businessmen.

Hong Kong's advantage is its hinterland. If you put us near China we can compete, and our regulatory framework for financial services is comparable. Shanghai is fighting with Hong Kong and the centre of gravity may shift.

Instead of being a centre for China like HK and Shanghai we're aiming to be a centre for Asia. If you want to reach India you can use an Indian city but Singapore's the only choice for the whole of Asia. This is because we speak good English - we're the only feasible city in Asia with English as a working language (Sydney's too far south and Manilla is not a business hub).

MTI Dialogue Session (all posts)

Question: That our GDP had been rising by a phenomenal 7.7% per year since 1960 was mentioned but how much of this was real was questioned, especially with GST, inflation, transport costs rising and stagnant wages.

Answer: 'We don't cook the numbers. One of the attributes - trust, disappears immediately'. The difference between real and nominal GDP was explained.

It was admitted that this was a difficult question. Those of us in the room would have no problem due to our degree which would grant us flexibility in the labour market since we would have the skill sets to switch jobs and we could pursue anything.

The problem was with the bottom 20-30% of Singapore, who hadn't even completed secondary school. They were in their late 40s and early 50s and had a lack of training, rendering them vulnerable to competition from low cost labour from India and China.

The cost of living in Singapore was rising by only 1-2% annually thanks to currency appreciation and this was reasonable by global standards, especially since we're totally urbanised (in urban areas the cost of living rises more quickly than in rural ones, so we actually do very well compared to other countries).

The question was whether there was a trickle down effect. Retraining was encouraged but the reality was that it was hard to adjust, and he'd met many such affected people during Meet the People sessions.

Question: How can we contribute back to Singapore? I went to the US for the NUS Overseas Colleges (NOC) program and worked and got exposure there. If I leave Singapore how can I contribute? If I stay here I will lose out.

Answer: Even in teaching there was a chance to go global. He'd gone to Cambodia and there were Singaporean teachers there teaching under a private company.

It was up to us to work overseas but we were urged to take this opportunity. Even Singaporean companies, if able, would send us overseas to gain global exposure, let alone MNCs.

We were told to take the offers because it wasn't unpatriotic to do so but "please come back" to contribute with what we'd learnt. The temptation to leave would be great but there'd always be a part of Singapore inside us and we'd feel pangs after a while: 'I don't want to reduce it to char kway teow... It's more than that'. For example some emigres return to Singapore after a few years abroad.

The example of Vietnam was raised. They have 80 million people or so, yet 3 million in the diaspora: 0.5 million in the US [Ed: Wo-hen!], 0.5 million in France etc. The constraint that Vietnam faced was of not having enough good people, thanks to their bieng under communism for too long, and in its time of need, Vietnamese overseas returned to it.

Venture capital in Singapore was good - $20 billion worth.

Question: Singapore lacks talents. Not just money but people. In the US you can rub shoulders with Jeff Bezos, but you can't do that here. It makes more sense to go to the US since it's hard to found startups in Singapore.

Answer: The US was huge and it had a grand tradition of entrepreneurship. If you ask VCs who the important investors are, it's those with experience who can guide startups. Rockstars of industries lack the bandwith - they don't have the time to help everyone unless they take a personal interest in you.

Singapore might've been a bad place for startups 10-15 years ago, but now we have home grown people - Olivia Lum, Sim Wong Hoo (and one more whose name I forgot). People come here from China and India to help, and we have Singaporeans with experience.

Finally, compared to the US, all countries are far behind in this respect.

Question: People in Singapore are too risk averse.

Answer: This is a reason why the early entrepreneurs were from polytechniques [Ed: Pardon my French] - university graduates were too comfortable. The more education you have the more risk averse you have - those with PhDs are totally risk averse. But this is changing.

Question: Are we changing fast enough to compete on a worldwide field?

Answer: We can't beat China and India, but many are prepared to come to Singapore.

Question: What is the future of the humanities in Singapore? We study what we're interested in but we can't find corresponding jobs.

Answer: He did economics as his first degree and public administration later. Since he was bonded, he didn't get to choose his first job, which was as Deputy Director of Police and Security in MHA. His world was shattered. The moral of the story is that it's not to do with your training but your state of mind.

Those from the humanities have a different (qualitative) way of looking at things. Those in the social sciences occupy the middle ground between humanities and hard sciences. If you're a good Humanities student you can get a good management post anywhere. Many companies want balance and an environment for good decision making.

For hard political analysis, the marke tis not big, being mostly in academia and institutes. Business political analysis is a bigger market and Singapore is the best place in the region for this, together with Hong Kong.

There are opportunities, but they are not as obvious. You need to differentiate yourself and not shut the door.

MTI Dialogue Session (all posts)

I was at a dialogue session with the Minister of State for Trade and Industry Mr S Iswaran today about the Singapore economy and our views on where we're going, and the notes are too long to finish in one post, so I'll do it in spurts, and tag each one "mti dialogue".


The session opened with a presentation on where the Singapore economy was going.

Right now 77.3% of our GDP is composed of external demand, and only 3.4% government spending.

I was expecting a list of challenges but the only one we got was the rise of China and India - others are getting cheaper and better.

The strategies laid out for us to compete were:

Speed - We can move quickly as a small, united country, capitalising on our efficiency and infrastructure.

Trust - We have a good reputation, good in areas like financial services, aerospace precision engineering and intellectual property.

Innovation - We can move into new markets and do things different, eg Environment and Water Technology (Hyflux), Interactive and digital media and Life sciences

Breadth - We offer a spectrum of related products and services. If we only had a single offering we would have to compete on price, but we offer complementary services. For example Bio-tech <-> Pharmaceuticals <-> Health care <-> Medical technology

Buzz - We have talent and ideas. The IRs, new Botanical gardens and rejuvenation of the Singapore river are part of the plan to generate Buzz.

Our growth prospects are 4-6% for 2007 (MTI estimate - the other organisations didn't give such a large range).


The dialogue bit then began.

Question: It was asked whether there would be enough jobs for people in the life sciences.

Answer: Life sciences is a broad area. In the Singapore context we're going for bio-technology and pharmaceuticals, because we can capitalise on our strengths; they require a high knowledge content (education plays a role here) and their taking 12 years from identifying a molecule to bringing it to market as a drug requires a rigorous intellectual property regime so the research costs can be recouped. Drugs need quality control and consistency for safety reasons.

Those with basic life science degrees were advised to go for pharmaceutical companies or biotechnology where they could support research. The rest were told to go for PhDs.

The life science degree was feted as offering mind training: 'The world is your oyster', and this applied to other disciplines as well, eg Engineers diversify into other fields.