Speeches

INTRODUCTION

1. I am glad to join you at the gala dinner of the fifth Global Entrepolis @ Singapore.

2. I am especially privileged to be here tonight to present the 2007 Asian Innovation Awards (AIA). This is the 10th year that Wall Street Journal Asia is honouring the region's most innovative individuals and enterprises. The AIA recognise a wide range of innovations, conceived and developed by individuals, companies or organisations based in Asia, but all ingenious in their own way.

3. Last year, the gold award went to Veredus Laboratories, a Singapore firm that devised bird-flu test kits that can quickly diagnose the disease - as early as the second day from the onset of infection. That's crucial, as anti-viral drugs need to be administrated early, soon after symptoms appear, to be effective.

4. The Awards last year also honoured a very worthy social responsibility project. The State Government of Gujarat in India was given the silver award for its maternity-care programme called Chiranjeevi Yojana which is successfully reducing maternal and infant deaths in its poorer communities.

5. This year's awards will be similarly exciting and, more importantly, useful. I am delighted that Singapore is able to be the point at which these wonderful innovations converge. I offer my heartiest congratulations to the finalists of the 10th Asian Innovation Awards.

IMPORTANCE OF INNOVATION AND ENTREPRENEURSHIP

6. We are now well and truly in a world driven by knowledge-based innovations. The countries that are pulling ahead are those that have vibrant innovation systems - they have the institutions, networks and cultures that support continuous innovation.

7. There will always be an element of serendipity in successful innovation. But it is not all a matter of luck. Nations that build strong innovation systems will increase the chances of developing ideas that achieve commercial success.

8. Every nation therefore aspires to develop a vibrant system of innovation. There are many dimensions to achieving this, but we know that one thing that is fundamental to it all is entrepreneurship. An innovative economy needs entrepreneurs. High levels of knowledge and skills alone will not produce the innovations that create value without entrepreneurs, and a culture that respects and encourages risk-taking.

9. We also know that it takes time to develop this spirit of entrepreneurship in society. Historical differences between societies can be remarkably resilient. European societies remain measurably different from American in their attitudes towards risk. This is also why no one expects a sudden surge in entrepreneurship in Singapore, or a sudden turn in attitudes towards failure, even though we are a younger society. By common observation, Singaporeans have been averse to taking risks, and especially so among the more academically successful. This is not surprising. The success of our past economic strategies, beginning with the jumpstarting of the economy in the 1960s with policies to attract MNCs and set up government-linked companies, has given several generations of graduates a wealth of opportunities to pursue well-paid, stable careers in the MNCs and other large corporations, the professions and in government.

10. But we are making decent progress, partly coming out of our concerted efforts in the last 5 years. Last year we had an all time high in the number of enterprises being formed - over 45,545 enterprises. Of these almost 10% (4315) were high-tech enterprises of one sort or another, which was itself a 10% gain over the previous year (3894 high tech enterprises were formed in 2005.) Not bad, given that Singapore has been operating at close to full employment, making paid employment an attractive option.

11. We think we can keep up this progress. Government cannot force the pace, but can help by ensuring we have an environment that is supportive of risk-taking, and helps entrepreneurs succeed.

12. First, we have to keep our rules simple and transparent, and allow markets to work. Singapore is doing reasonably well in this regard - in fact for the second year running, the World Bank has ranked us first in the "ease of doing business"^[1]. Competitive domestic markets, openess to new entrants and protection of intellectual property are absolutely critical to innovation.

13. Second, we have to keep taxes low. We in fact have a tax regime that is one of the most conducive for entrepreneurship, internationally. Our special provisions for start-ups and small companies mean that over 80% of all companies in Singapore pay tax of no more than 12.5%, which is Ireland's corporate tax rate. (Start-ups enjoy full tax exemption on the first $100,000 of their chargeable income for each of their first three years. The Partial Tax Exemption threshold for companies was recently increased from the current $100,000 to $300,000. Enterprises are allowed to carry back up to $100,000 in losses for a period of one year.) This, together with the reduction in headline corporate tax rate to 18% and the absence of capital gains tax, make Singapore one of the most competitive locations in the world for starting and running a business.

NURTURING ENTREPRENEURIAL MINDS

14. Third, we have to keep working in education, at nurturing innovative minds - people who are willing to do their own thing, try new and untested routes, and to take advantage of uncertainty. Entrepreneurship requires that state of mind - constantly looking out for a new way, and looking out for opportunity.

15. We need to do this in education, not just because it helps to throw up entrepreneurs. It is important for us to become an innovation-driven society. We are past the "catch-up" phase - past the phase where we try to do as efficiently as possible, at lowest cost, what has already been done elsewhere. We are now in the phase where we need a whole generation of innovative minds, people who are constantly questioning and searching for something new, always trying to do something better, and occasionally breaking new ground.

16. To achieve this, how our students learn is more important than what our students learn. At the heart of it, we have to encourage our students to take more intellectual risk. In other words, to be willing to question, to tinker with things and to explore new approaches knowing full well that there is every chance that they will not succeed. Knowing full well that each new approach that you embark on has a good chance of not working out. This culture, or attitude towards learning and experimentation, has been the seed bed for the most innovative societies in the world.

17. It is not entirely absent in Singapore, or the rest of Asia. But is very much `work in progress' in reforming our education systems, starting with our schools, and especially in our universities. Changing the culture of education to one which encourages students to take more intellectual risk.

18. This involves many shifts in education. It is not a "big bang", not a large or sudden change, because we do take off from a strong education system in Singapore. Instead, we are moving forward in meaningful shifts.

19. One of these shifts is in the nature of examinations, because they remain central to our systems. Examinations are still the simplest and fairest way of ensuring that the system remains meritocratic. Which school or university you get into and which department you get into has to depend on merit. And examinations, unfortunately, are still the fairest, simplest and most transparent way of gauging a student's abilities, even if in an approximate way.

20. But we have to gently evolve the nature of our examinations, towards a system that tests students' ability to think in a more open-ended context, in a situation which a student has not fully predicted. This is after all what thinking ability is about, which is why we always have some examination questions which are not easily predictable.

21. Next, we have to expand the menu of assessments beyond written examinations. We are experimenting with new types of curricula and assessment. That is why we have project work, or the various other types of assignments and assessments that our students in the Integrated Programme schools are exposed to - research, presentations or projects in which they have to create something. Devising these new forms of curricula and assessment is extremely important. They are more authentic to what happens in real innovation processes, and to the skills that come into play in the real world.

22. This is also why we are developing new ways of identifying talent, besides measures of academic ability, within a system of meritocratic progression. We have to do so in a way that remains fair, remains meritocratic and remains reasonably transparent. This, too, is an important reform in Asian education systems, which in some respects we have been able to move further along in Singapore, compared to the larger and more complex systems in Asia.

EVOLVING THE WAY WE TEACH AND LEARN

23. But the shift in education, at its heart, is not about exams and the types of assessment, but about evolving a new culture of teaching and learning, where the role of the teacher and the lecturer is to encourage students to question, to challenge, and to think originally. Thinking in original ways has to be the dominant motif of education in Singapore. That is how a student should get an "A1", not by reproducing as capably as possible what his lecturer thinks, or least of all what his lecturer has handed out in lecture notes.

24. We have to encourage children to stand up and speak their minds, even if they may not say something that is always correct or even relevant. Take the risk. This has to start from young - from grade school or primary school - so that it becomes a habit and our children develop the habit of thinking originally as they grow up.

25. We have given our schools and teachers more room to do this, through their own programmes. They are helping our students exercise initiative, think independently and think deeply and critically about issues. Many of our schools also have fine programmes to develop students' entrepreneurial capabilities. Especially at the tertiary level, there has been an increased emphasis on education in entrepreneurship. Both NUS and NTU have very successful entrepreneurship programmes to teach students the basics about starting businesses. And this works. NTU's Technopreneurship and Innovation Programme, for example, now in its 7th year, guides students through the process of creating a start-up based on inventions from the university. More than a third of the students in the programme ended up starting companies after graduation.

26. Entrepreneurship education is a life-long exercise. Even seasoned businessmen have something to learn. SPRING Singapore launched the Management Development Programme in April this year to equip SME leaders with appropriate knowledge and general management expertise to give them an edge in today's globalised economy.

YOUNG INNOVATORS AT GES

27. So the key is - start young and keep the flame burning. It is heartening to see that students from our schools, and indeed from the region, have been taking part in GES since its inception. This year is no different. If you had visited the Enterprise Exchange exhibition earlier today, you would have seen young innovators eagerly presenting their inventions to you. I am sure they have benefited greatly, rubbing shoulders with real-life entrepreneurs from all over the world.

CLOSING

29. As you continue with the remaining two days of GES, I wish you a fruitful and enjoyable experience in Singapore. My warmest congratulations to each of the award winners in this year's Asian Innovation Awards!

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^[1] World Bank. "Doing Business 2008"