What price innovation in S’pore?

What price innovation in S’pore?

Many Singaporeans are avid users of WhatsApp, a mobile-messaging company with only 55 employees and no meaningful revenue. (“What’s up? Facebook stuns with S$24b WhatsApp deal”; Feb 21)

FROM LAI KOK FUNG –

24 FEBRUARY

Many Singaporeans are avid users of WhatsApp, a mobile-messaging company with only 55 employees and no meaningful revenue. (“What’s up? Facebook stuns with S$24b WhatsApp deal”; Feb 21)

While many are amazed at the size of the deal, I have examined this from the point of “what price innovation in Singapore”.

I took a snapshot of the market valuations of the largest Singapore companies listed on the Singapore Exchange, and WhatsApp is worth about twice of Singapore Airlines and more than StarHub, Singapore Press Holdings, ComfortDelGro, M1, SMRT and SBS in total. It is also comparable to three of the largest property developers here, CapitaLand, City Developments and Keppel Land, combined.

These are supposedly Singapore’s best companies, helmed by the brightest Singaporeans and foreign talents. They employ tens of thousands of staff and consume significant resources of this nation.

Yet, like Goliaths, they do not appear to match up to a David in WhatsApp. This warrants a rethink of the centralised model, in which resources are clustered and monopolised by a handful of elite companies. Supposedly, this creates the scale for Singapore companies to compete globally, as we are unlikely to have sufficient talent pools to form more than one A team.

I had first-hand experience of this philosophy in my early career as an information technology researcher. In the 1980s, experimentation was encouraged among small teams of young engineers, infused by returning scholars from top overseas engineering schools.

Interesting work flourished and would have formed the seeds of Singapore’s WhatsApps today, had the process continued. Sadly, by the 1990s, small project teams were terminated, with engineers pooled together to implement national projects in education and transport.

The result: Many bright IT researchers became project managers and, subsequently, administrators. The wisdom of the model was questionable then; it is outmoded today.

In his latest book, David and Goliath, Malcolm Gladwell questions the conventional interpretation of the famous story. While the giant appeared a formidable opponent, he exhibited symptoms of gigantism, which probably affected his vision and movement.

He was dressed in heavy armour in the style of an infantryman, expecting to fight on these terms. Instead, David chose to fight as an artillery soldier, leveraging on speed and agility and employing a few stones as projectiles. The rest is history.

What price innovation? Perhaps, the right question is: What price non-innovation? The answer: Goliath.

Ironically, with many government initiatives to encourage entrepreneurship and innovation, the harder question is: Are we ready for innovation? The process is messy and unstructured, authority would be questioned frequently and results would be highly uncertain. Most importantly, top talents and resources must be released from traditional areas.

Finally, entrepreneurs who feel stymied by the monopolistic environment should note that they do not have to fight the battle on those terms. To David, Goliath is a sitting duck.

The writer is CEO of BuzzCity, a Singapore-based multinational company that specialises in mobile advertising. He is also Adjunct Professor at the School of Computing, National University of Singapore. He started his career in the Information Technology Institute, a now-defunct, government-funded institute.