MARCH 10, 2003

Lessons in success from animal ecology

By THOMAS GOH
IN HIS Budget speech this year, Deputy Prime Minister and Finance Minister Lee Hsien
Loong highlighted the need to develop an entrepreneurial mindset in 'all businesses, large
and small, as well as the public sector'.
The same day, Deputy Prime Minister Tony Tan, chairman of the Economic
Development Board's International Advisory Council, unveiled the EDB vision to turn
Singapore into a 'Global Entrepolis', home to the world's most enterprising companies, by
2007.
Both events outlined a compelling vision about Singapore's future and the way we work.
By changing our mindsets and our way of doing things, local communities can help make
the entire country attractive to business and innovation.
To learn what it takes to be a world-class entrepreneurial hub, I turned to Professor
William Miller, for answers.
Prof Miller heads Stanford University's Stanford Project on Regions of Innovation and
Entrepreneurship, and his team has studied successful innovation and entrepreneurship
hubs around the world.
It found that, similar to the ecological systems that support life, an entrepreneurial hub
nurtures growth and innovation in both start-ups and established companies.
Prof Miller, who is also the Herbert Hoover Professor of Public & Private Management
Emeritus at Stanford University, calls such an environment a Habitat.
He stresses that an effective business Habitat is one that fosters a mix of both large
multinational companies and local start-ups.
'The fuel for entrepreneurship is the ideas, talent and capital. If Singapore continues to
create a favourable Habitat for innovation and entrepreneurship, the result will be an
increase in new business formation both within companies and of new companies.'
According to Prof Miller, a successful Habitat should include the following:
Favourable rules of the game to encourage entrepreneurship.
Strong value-added business services to support its growth.

 Free flow of capital, people and ideas to encourage innovation.

Global linkages to other industrial clusters.
Using Cambridge in England and Zhongguanchun Science Park in China as case studies,
Prof Miller outlined how both Habitats combined human capital initiatives with financial
incentives to promote international and institutional cooperation. They became fastgrowing bases which, in turn, attracted more professionals and businesses, thus
accelerating their economic growth.
'Singapore is definitely learning what works in terms of building the Habitat by building
local and global networks through the Government and universities.'
However, it should be mindful of challenges coming from emerging entrepreneur regions,
'not only as low-cost producers, but increasingly as low-cost innovators as well'.
He added: 'The trend of doing more with less is bringing risks for many developed
countries as companies move jobs to countries with cheaper skilled labour like India and
China. That concern is parallel with some of the fears in Singapore over outsourcing jobs
to these countries.
'There will be continued pressure from low-cost, highly-skilled countries which will force
developed nations like Singapore to upgrade its skills and produce the highest valueadded work.'
Citing Silicon Valley as an example, Prof Miller said its competitive advantage in
providing innovative services and products wards off continuous challenges from new
and low-cost global entrepreneurial regions.
'In fact, the value added by each employee at Santa Clara County has increased
significantly from US$179,700 per employee in 2001 to US$184,300 in 2002.' That is
$312,680 to $320,680.
'I'm certain the statistics would follow this trend in Singapore. As companies try to do
more with fewer resources, they will need effective productivity tools and technologies to
help them,' he said.
Global competition has also speeded up the rate of boom-and-bust cycles. Therefore,
companies need to manage these periods by adapting to waves of innovation and
adjusting to economic cycles. He urged companies to adopt a positive, flexible attitude
and to think more in terms of boom-bust-and-build rather than just boom-and-bust.
'Companies need to learn how to ride out the current downturn by building a dense and
flexible network among people who know how to translate ideas and technology into new
products and services fast enough to stay on the edge of innovation.

'Companies, both old and new, build on technologies and service ideas that started in the
boom. I am confident that the technology business will emerge from the bubble era of the
1990s with several years of rebuilding, just as it did in the 1970s and 1980s.'
So what does it take to keep a company going after a boom-and-bust period?
Externally, there should be physical, legal and social mechanisms that boost speed in
product development and in promoting cross-firm learning about both technical and
business issues.
Entrepreneurs should also develop an environment that rewards risk-taking and does not
punish failure, as courage is an important element to be successful.
Internally, a company should consider hiring experienced people, seek advice from more
experienced business and technical people, solicit expert functional and technical
professionals to run its operations, and continue financing and working in partnership and
alliance with people who have an interest in the company's future.
Prof Miller should know, as apart from being an academic, he is also chairman of
Borland Software and a board member of Xpeed and HandySoft.
But it was his role as trustee of the Cheetah Conservation Fund, which conserves
cheetahs in the wilds of Namibia, that caught my interest.
Cheetahs and successful entrepreneurs have something in common: They both react fast
and move swiftly. This quality is crucial to transforming Singapore into an
entrepreneurial society and the Global Entrepolis.

TO DO WELL: What it takes

ACCORDING to Professor William Miller, who heads Stanford University's Stanford
Project on Regions of Innovation and Entrepreneurship, a successful entrepreneurial hub,
or Habitat, should include the following:

Favourable rules of the game to encourage entrepreneurship.

Strong value-added business services to support its growth.
Free flow of capital, people and ideas to encourage innovation.
Global linkages to other industrial clusters.

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