Singapore has a problem with failure — we are just not making enough of them, reckons Dr Finian Tan. “You cannot ride a bicycle without falling. But if you ride a bicycle and if you fall and you die, you will never try to ride a bicycle.”
Cycling is, of course, an analogy but Tan’s call to rock the boat is clear. We are aboard Tan’s yacht, berthed at the very end of a dock off the prestigious Sentosa Cove area on the island of Sentosa. The main deck is enclosed — carpeted and air-conditioned — with silverware laid out on a dining table. The large craft sways ever so slightly, and soon becomes barely noticeable. Singapore, and its start-up field in particular, needs a radical change, says Tan, who is the founder of Vickers Venture Partners, now the fourth most consistently performing fund manager in the world. To foster a lasting culture of innovation, Singapore will require more than what he helped to kick start some two decades ago.
From 1997 to 1999, Tan served in the Ministry of Trade and Industry as deputy secretary, where he worked to turn Singapore into the “Silicon Valley of Asia”. To drive this transformation, he put forth three recommendations: A billion-dollar fund from the government to jumpstart venture capital in Singapore, an inter-ministerial committee to allow start-ups to thrive and the creation of a science hub in the Buona Vista area. The government accepted all three proposals and he was placed in charge until he left for the National Science and Technology Board (now A*STAR), becoming its executive deputy chairman.
Two decades later, Tan says he is proposing a complete overhaul at what he thinks is an “opportune time” for the city-state. “Hong Kong is becoming more Chinese. If you want to serve India, Southeast Asia and China, Singapore is the best place.”
“In the past, we used to be a crossroads for ships, then aircraft. We can now be a crossroads for start-ups, talent and capital and all the ancillary support like accountants, lawyers and brokers,” he tells The Edge Singapore. However, some “very major changes” are necessary for Singapore’s Silicon Valley dream, adds Tan. Once again, he outlines three recommendations, starting with a much larger capital injection. “[I asked for] $1 billion at that time, today, $100 billion; just as a seed to jumpstart everything. I would also identify funding gaps in start-up stages and increase capital availability using government schemes.”
Next, Tan thinks a revamp of our education system is in order. “The system should not be focused on training them to be employees, but employers. [It should] allow them to dream, not just dream of being a doctor or a lawyer, but allow them to dream of company creation. I am encouraging internships from a very young age at start-ups and venture capital companies.”
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Finally, he hopes to increase the quality of the talent pool in Singapore by reducing the “unfair advantage” enjoyed by government-linked companies (GLCs). “It’s a very major change to reduce the role of GLCs in this country so they don’t stifle creativity too early. I would release scholarships from being bonded only to the government and reduce our reliance on lower-skilled foreign workers. Instead, I would focus on people in the start-up ecosystem.”
A former scholar himself, Tan was the first Singaporean recipient of the Shell Scholarship, awarded competitively to the top three candidates from 11 Commonwealth countries. An engineer by training, he obtained both his Masters and Doctorate degrees at Cambridge University, and joined Shell as an oil trader after graduating in 1990.
By then, Shell had already been in Singapore for nearly 30 years, and Singapore was reaping the economic rewards of its “first-generation playbook” in job creation: Attracting multinational corporations (MNCs). “In the past, how did Singapore create jobs? They created jobs by importing them. At least, they imported the jobs atop the pyramid. For example, Shell came in, bringing their latest and swankiest innovation. They brought the product, the innovation, the customer, what did we need to do? We needed to supply the labour,” says Tan.
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That was relatively easy to do, he says. But the factor and investment-driven stages of Singapore’s economy in the 1970s and 1980s respectively were quickly giving way to the innovation-driven stage of the 1990s. It is here that Singapore remains lacking. “To create Shell: the product and the idea, the capital and the customers; it’s much harder.”
“Singapore created jobs in partnership with creators of products that sell. Now, we have to rely on Singaporeans to do it. How do you do that? It’s a lot more difficult. Innovation and entrepreneurship must come together, and you must have people thinking about it,” he adds.
While Tan is confident that Singaporean students are as capable as those in Silicon Valley, few locals prioritise company creation like they do, he says. “You can’t have people wondering about ‘Where’s the best place to buy HDB?’, ‘Who’s going to be the 4G leader?’ Those can’t be the only conversations people have.”
“When university students have lunch in Silicon Valley, they’re not thinking, ‘Which job should I take?’, but ‘Which product should I build that the world needs?’ So there are more world-thinking, world-changing ideas. Are we as smart as them? Absolutely. But name me the number of startups here that have changed the world,” he says.
Universal basic income
This is where governments can step in, says Tan, by offering universal basic income (UBI). “At the moment, people are so worried about bringing food to the table that they sometimes remain in bad jobs, jobs that don’t suit them, where they have no opportunity.” “I think UBI is a very humane and kind way of ensuring that you combine talent, interest and opportunity. A simple, clean wage; everybody gets, say $1,000 per month as long as you’re alive and of age, including the rich. This makes it simple to implement. It will also prepare us for the time when artificial intelligence will take over a lot of what we do today,” says Tan, by no means the only proponent of UBI.
In 2016, Swiss citizens rejected the closely-watched UBI proposal in a referendum. That hasn’t stopped other countries from launching similar experiments. For example, Finland ran a trial with 2,000 unemployed citizens in 2017, giving them 560 euros a month for two years. While many remained unemployed by the time the experiment was ended in 2018, recipients of the stipend were reportedly happier and healthier.
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In Kenya, non-profit organisation GiveDirectly started in 2017 a 12-year study in UBI, distributing cash transfers to 20,000 people across 197 villages. Initial results for that study are expected this year.
“Once you allow UBI you will have less problems to worry about,” says Tan. “For those who were unable to take advantage of opportunities, you will move them towards their interests and skills and away from putting food on the table, and that results in entrepreneurship.”
That said, Tan is aware of the sceptics, particularly how a country like Singapore would afford such a scheme. “I think the biggest question is, ‘Where does the money come from?’ A third can come from current schemes that are already applied to disability and unemployment [benefits] plus the tax that comes from the UBI expenditure [going] back into the economy” he says.
“The rest has to somehow come from an increase in government revenue. In Singapore, you can do that through several means. In my opinion, money from land sales, which is currently below the line, should be part of the budget since we don’t really sell land in Singapore but instead lease them for 30-99 years and only lease a small portion per annum.”
Tan’s call for bold moves extends also to the government. With regards to national reserves, he hopes the top brass can value investment potential over excessive savings. “We are saving money for a rainy day. But every time you save money for a rainy day, you are taking money from the current population and saving it, for future generations. If you still have people who need money today, shouldn’t they get priority now that we have enough in savings?” says Tan. “I think we already have one of the largest reserves in the world. Do we continue to squirrel away? What’s enough? 10 trillion? Five? There’s some scope to reduce the growth of these savings. Perhaps just for inflation, and use the rest to ensure everybody has no fear of [having to hold] two jobs or our seniors collecting cardboards just to bring food on the table.”
Tan proposes that Singapore keep a certain amount as a “growing pie”, to keep pace with inflation, while using the rest to jumpstart the economy. “In doing so, you’re investing, not just consuming, because what I’m proposing will create a culture [of innovation] and it’s the new wall which we need to put our ladder on. We are sometimes so preoccupied with climbing the ladder that we don’t realise it is no longer on the right wall, as is the case with our multinational strategy of importing jobs. There are still some steps to climb on that wall, but we need a new wall to put our ladder on soon. And that is in creating an ecosystem that allows us to create our own jobs and not rely on multinationals to do that for us.”
Bold ventures
As chairman and founder of Vickers Venture Partners, Tan is working on solving present problems himself. Founded in 2005, the venture capital firm started with a US$9 million ($12.3 million) fund, but today manages over US$3 billion across six funds and co-investments.
With its focus on life science and deep tech, companies in its stable include AWAK Technologies — a Singaporean company with a kidney dialysis machine as small as a handbag — and the Singapore-based biotech start-up RWDC, which is offering a biodegradable alternative to single-use plastics. But perhaps the most exciting is Emergex, a UK-based biotechnology company working on a vaccine for Covid-19. Unlike other vaccine companies, however, Emergex is the only company focused on killer T-cells instead of antibodies. While antibodies work to eliminate the virus before it infects the host, T-cells kill cells that have already been infected. Tan likens the former to a “surface-to-air missile”, while the latter allows the infection to happen before preventing the disease.
The vaccine is ready for human clinical trials in Switzerland, and a proof of concept can be expected by the end of this year or early 2021, says Tan. If the vaccine proves successful, it will be “very, very quick to produce”, as it is stable at room temperature and purely synthetic, he adds.
Another company in the Vickers Venture Partners’ wheelhouse is Eavor Technology, which aims to make geothermal energy an accessible alternative to fossil fuels. Tan believes geothermal energy can power Singapore’s electrical grid and desalination plants, owing to the heat from our proximity to the seismically active Ring of Fire.
His investments seem wide-ranging but that’s part Tan’s yearning for more “audacious” ideas. This concept of innovation has been promoted for years, and more people should help put their shoulders on it. “We need a climate that allows people to think big and not be scared, from the government to the parents and teachers, but this needs a safety net.”
Tan continues: “Be fearless. If your basic needs are met, why worry about joining a start-up instead of one of the GLCs or MNCs? What’s the worst that can happen? You fall a little and start again. Before you know it, you’re riding your bicycle.”
