CULTURE     PRODUCTIVITY

Singapore - Promoting an entrepreneurial spirit in the younger generation can lead to an increase in national productivity levels and job opportunities.

SMEs (small and medium enterprises) and an entrepreneurial culture are the cornerstone to the Singapore Government's recently announced strategy to restructure the economy towards higher-value activities and raise productivity. Professor Hamid Bouchikhi, founder and academic director of ESSEC Ventures, an entrepreneurship centre at ESSEC Business School, shares lessons from the French government's experience and how these can be applied to Singapore.

Despite being plagued by massive unemployment over the last three decades, France leads the other G7 countries in terms of productivity, with its GDP (gross domestic product) per hour worked in 2008 at US$53.20. The issue facing the government therefore has been how to lower the unemployment rate while maintaining the same level of productivity.

With the French economy made up of some 2.5 million private companies today, French political leaders have realised in recent years the key to generating employment and economic growth lies with small businesses and entrepreneurship. In particular, the focus is on creating favourable conditions for SME development, which would lead to an increase in job opportunities and stimulate employment.

Since the 1990s, successive French governments laid out three main ways to do this:

-        One, foster new venture development, with a special focus on science and technology based ventures, as well as, expand established businesses

-        Two, promote modernisation of business through local networks of start-up assistance enabling entrepreneurs to sell new products or sell their products in new markets

-        Three, simplify administrative procedures so entrepreneurs can spend their time on what they do best - creating, leading and developing businesses.

While governmental plans and initiatives are necessary to facilitate high growth entrepreneurship, they are clearly insufficient. The key challenge in a country like France, where many people still aspire to a career in the civil service or in a cosy corporation, is to change this mindset and promote business creation and ownership as a realistic and desirable professional alternative. But government policies and initiatives, however well-meaning and useful, cannot by themselves promote an entrepreneurial society.

What is also needed is a fundamental change in culture, a process which takes time and requires consistent efforts from all parts of society from the family to schools, businesses and even the media. Education remains one of the most effective ways in which to change mindsets. By exposing the young to new ideas and a different way of responding to issues (moving away from a process-driven solution for example), the government can help to promote an entrepreneurial spirit in the next generation. This is particularly important at the tertiary level where tomorrow's leaders are nurtured and developed.

As the Economic Strategies Committee has outlined, universities will play an increasingly important role in training talent across the innovation and enterprise value chain. While entrepreneurship cannot be taught (as an academic subject like economics), it can be promoted through a set of initiatives designed to train young students, and more seasoned executives returning to school.

Some challenges that all entrepreneurs face and can be taught in school include:

-        how to get the most efficient use of their limited resources

-        where to find the best opportunities (information)

-        how to assess the economic value of target companies (intelligence)

-        how to optimise the allocation of available cash (decision)

-        what are the key drivers of success for an entrepreneurial investor (control)

But after creation must come growth, otherwise the government may end up investing a lot of resources in starting up companies only to see them leave at a later stage.

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