Is Singapore Economy In Danger for Long Term Decline (Part 2)? – The Need for “Penetration Model”

This post (Part 2) continues from the previous post. Is Singapore Economy In Danger for Long Term Decline (Part 1)? – The Flaws of “Seduction Model”


In the Financial blogosphere space, many aspire to achieve Financial Independence Retire Early (FIRE). We do not want to depend on our day job indefinitely, running an endless rat race. In a way, we want to have control over our own life, and do not want to depend solely on our salary for survival. Hence, the strive for FIRE, regardless of where or how they started.




In spite of all attempts to be independent for ourselves, I realise a contradictory phenomenon when we are discussing similar issue for our country.


We disbelieve that Singapore can create a “world beating MNC”, because we are not in a favourable position. We think that the odds of happening are very low.”


Isn’t it funny, when it comes to issues for ourselves, we do not want to depend on others for survival? We do all we can to achieve FIRE and nothing is “gonna stop us”. The strong faith to achieve Financial Independent (FI) even motivate many to quit their stable job to own businesses teaching FI, and others become FT traders, and some living on dividends to cover their expenses. But when it comes to issues for our nation or our next generation, how many times have we heard that “we have no choice because we are small with limited resources, and we have to depend on others for our survival.”  


Isn’t it funny, that suddenly we seem to forget that five decades ago, we were at “ground zero” with no money, no resources, no infrastructure, no talents, but a divisive multi-racial population? Are the odds of our success higher back then? Certainty NOT! Yet, we made it!


But now, just to create a world beating MNC with Singapore current status of money, expertise, education, good infrastructure, good location, bilingual population, we said “the odds of happening are very low.”


The truth is, it has nothing to do with “odds” of success! It has everything to do with the mindset to begin with!




Stop building barriers for ourselves, before we build anything

In the following, we will take a look at examples of small countries producing global companies. Before we start, please have an open and positive mindset, rather than lamenting:


“aiyah…their countries or companies have a long history, aiyah.. they have how many millions population bigger than us, they have bigger land… bla bla bla.”  


Sadly, this can be the mindset, that before we start building anything, we always start to build barriers and find excuses. And the worst, is to find tonnes of reasons to justify why we can’t, and why we are already very good now and should not change. When we should, instead appreciate the truth and facts, and have a humble and positive learning attitude to change and to improve. And there is absolutely no shame when you are wrong or have failed. At least you try!


Small nations producing global names and footprints

Below are some examples of small countries with companies/brands that thrive in the international arena. Many countries mentioned, I have either been there before, or have close business/personal relationships and friends with the citizens of these countries. Hence, I am speaking from personal experiences and not just “google and read from internet”.


Finland, a country with 5.2M population, not strategically located and with a very harsh cold climate, can produce companies such as Nokia, Kone, Neste, Wartsila, Cargotec etc with global footprints.


Denmark, another small country with 5.8M population, producing names like AP-Moeller-Maersk, Carlsberg, Orsted, Novo Nordisk etc. Moreover, Denmark has always been engaged in scientific and technological invention, from the very start and has not stay stagnant. In recent times, the country also participates in many high-profile international science and tech projects.


Switzerland, with names like Novartis, Nestle’, Roche, ABB, Tetra Pak, Glencore, Rolex, Swatch, and International banks in UBS, Credit Suisse etc


Sweden, producing Volvo, Ericsson, H&M, Nordea, SEB, Swedbanks etc.


Netherlands, a country that is dangerously below water-line, has global names like Unilever, Heineken, Shell, Philip, ASML, Randstad, ING, ABN etc.


Norway, aside from its oil reserves, the success of the country is also as a result of ingenious engineering and exceptional creativity in Technology with many entrepreneur-led SMEs thriving with global presence.  


Israel, a country with limited natural resources, surrounded by hostile countries, but has intensive development in science and technology, military weapons, and also development of the agriculture and industrial sectors over few decades to make the nation largely self-sufficient in food production! Israel also has the second-largest number of startup companies in the world after the US, and the third-largest number of NASDAQ-listed companies after the US and China. For example, WAZE, the navigation App was an Israeli start up acquired by Google in 2013.


The above are just some of the many examples of companies that have global footprints. Of course, some may want to compare Singapore to SEA nations that we are doing extremely well. But I prefer that we learn from countries who have strengths that is better than us. I am not advocating comparison, I advocates learning. I have many friends from most of these countries and their camaraderie spirit and love for the country is something we really should know. These countries are small, yet creative with high proportion of local people for PMETs. They focus extensively on “true” R&D to build technology and products of their own that can penetrate and cater to the world. Investing locally for long term and sustainability is really their strengths. On top of that, they have free education and healthcare and a very good work-life balance. Yet, they never falter at the global stage.


Large countries with little progress

Still not convince… and you still think that country and population size always matter? How about Brazil and most South American nations, India, Indonesia etc. Are they not big enough? Why are they still struggling as developing nations? Are you able to name some of their famous companies and brands with global footprints? Perhaps not too many!


It is the mindset, the attitude, and the character that matters

Yes, US and China are big countries. However, the fundamental reason for their successes today, is not just size alone. It is the drive, the hunger, the hardwork, the creativity, the freedom, the competition, the ambition etc of the people that have propelled them forward. Above all, it is the NO FEAR for failures that give them the extra edge!


Sometimes the lesser you have, the more you gain! In many instances, people or countries tend to excel in adversity! Therefore, stop bemoan that we are a little red dot with limited resources and have very little choice.




Don’t get me wrong. I never say we can survive on local consumption and a 100 percent local workforce. Common sense will tell us it is impossible for the country of our size to survive on local consumption. The world today is interconnected and complexly intertwined. No country can solely depend on oneself, even for the likes of US or China.


As I repeat again from Part 1, making Singapore attractive for foreign investments is of paramount importance. And for all we know, we already did very well in the seduction model, and I commend Singapore for that.


The headline from the Straits Times newspaper on Saturday 12 Sep 2020, reads “Singapore continues to draw investments from global players” – TikTok parent ByteDance, German logistics firm DB Schenker, PayPal investing more here.


So then, what’s my point.


My point is: while we continue to make Singapore a country that is “seductive” enough for foreign investments, we should then learn from them, and also effectively develop our own local homegrown talents, companies and brands, so that in the long run, we can truly “penetrate” out of Singapore with success and sustainability.  Today, US is still the super power because of the huge number of home-grown corporate powerhouse, not because of their government! Likewise, China is catching up like grease lightning.


Therefore, I term “Penetration Model” as the building or grooming of fundamentally strong Singaporean companies or companies that are built by Singaporeans. This is so that these companies are able to extend their businesses into a regional or global environment, thriving in the midst of global competitors to become true global MNCs with Singaporean HQ and core, that is sustainable and growing to become market leaders in the world.




Grab is not global yet, but did well in SEA growing to 6,000 employees since founded by Anthony Tan and Tan Hooi Ling in 2012. Although the founders are bornt in Malaysia and the company started in Malaysia as MyTeksi, it is in Singapore, where the company grown. The backing of Softbanks, Didi Chuxing, and the lack of support from the Malaysia government certainty help the growth of the company in Singapore. Anyway, Forbes still list Anthony Tan as Malaysian although he has already obtained Singapore citizenship. Both Tans being educated in Harvard also provided them a somewhat different mindset. The male Tan coming from a rich family background has added advantage too.


Then we have Razor, the gaming company founded in US, by Singaporean Tan Min-Liang, an ex-lawyer educated in NUS. I am not a fan of Razor and the founder, but have to give absolute credit to him for the ability to be successful in the competition of many US companies. That said, there is not much to boast if you look at Razor Inc’s share price performance since its listing in HK.


Espressif, the fabless semicon company founded by Singaporean Teo Swee Ann in 2008, has been in the limelight lately. The company is located, grown and listed in China. Teo graduated from NUS as an Electrical Engineer, and went on to work as an Engineer in US, before joining a Chinese company working in China. Teo has hoped to hire 80 Singaporean Engineers over the next two years in his R&D centre in Singapore.


Finally, Dymon Asia, the investment firm founded by Singapore hedge fund manager Danny Yong and his good friend Keith Tan in 2008, has also find success within a short space of time. Both founders graduated from NTU, and I love their humbleness and down to earth attitudes. Yong used to work for JPM, Goldman Sachs, and had spent six years’ experience working in HK and Tokyo offices. Tan used to work for Standard Chartered and has experience working in Shanghai.


All have overseas experiences

With the aforesaid examples, it is clear that all the founders have extensive overseas exposures. To be honest, Grab is still a very local company finding success only within SEA. Aside from Grab’s founders, all founders had career experiences where they start and compete, grow and thrive in a foreign competitive global environment. Some also have worked for foreign leading MNCs before finding their successes. And all are graduates from local universities (NTU/NUS), aside from Grab’s founders graduated from Harvard.



On the contrary to above examples, most local Singapore leaders often start with exceptionally good academics, received scholarships to study in overseas Universities, graduated and come back to Singapore with a career in local statutory board, SAF, or Temasek-owned companies with a pathed career destined to bring them to the very top, unless they foil it with acts of stupidity.


During my reservist ICT, I was told that a young overseas scholar who just graduated not too long ago, was posted to our unit as Captain, destined to be a General in no time. Everyone is aware of that. The Captain then made the stupidest presentation in front of all the officers. Despite that, none of the Majors and Colonels dare to give him real feedback about his ignorance and impracticality. Yet he was greeted with compliments even by his superiors… “yes, yes, yes” and “good, good, good” …, for the fear that very soon in the near future this young Captain will become their General and Commanding officer and take revenge on them.


Outcome: The confidence of the young Captain rose and soon became arrogance, intensified with ignorance and total detachment from the ground and reality. He will then go on to become SAF General, and later even as Minister.


This type of leader has very little local competition in his/her career to speak of… no failures, no correction, no real progress, let alone thrive in an international competitive global arena. When he/she travels overseas, he/she is always supported by many subordinates or “ka gias”. All he/she needs to do is to greet, smile, shake hands, and exchange dialogue with a plan script. And if he/she meets with anything too difficult, many of the “ka gias” will quickly flock to his/her rescue!


It is like a frog who is the king in his well, that jumps out of the well occasionally and thinks that he knows what the world truly is like!




The Taiwanese Driver

Many years back, when I was in a Taiwan, I had a designated Taiwanese driver for a few days. The driver Mr. Hu, in his 50s, seemed extremely knowledgeable about the world and read a lot. He is very insistent in his views on many important global matters. As the days passed with plenty of conversations, I realised that his views are mostly superficial or merely extracted from what he read on the newspaper, and lack solid insight. Furthermore, he never once substantiates his views with real personal experiences/testimonies. Then I asked if he had travelled to many countries? He replied that he had never taken a plane in his entire life before and has never step out of Taiwan! Duh!!!


My Ex-boss’s advice

When I was a young engineer, I worked in a small SME. Beside computer modelling analysis or layman calculations, and writing reports in office, I often had to travel abroad. My overseas work normally involved hands-on work in very harsh environments. I also gave training and presentation to overseas clients frequently. I started to get sick of the frequent travelling. My boss, a local Singaporean who is one of the owners and founders, told me something I remember so vividly. He said “go out and experience the world, there are mountains to climb and rivers to walk. Don’t just stay in office and read!” This ex-boss has since been semi-retired in his 40s and migrated to Australia. The Chinese has a saying 读万卷书,不如行万里路!




Guess I have said enough and you probably already get my point!


With the money Singapore earned, and the knowledge gained with a globalised economy, we should have strived to build more home-grown SMEs to grow our footprint overseas as early as in the 1990s. Instead, we are always more concern about every year economic success percentage, and neglect to invest on our own talents for long term future. We keep on justify our old methods with barriers and excuses.


It is always “our yearly report card score” that matters, but the long-term importance of the learning itself matters less. This mindset is so wrong!


While it is late now, but it is better late than never. I really hope that one day we can wake up from our clouded vision and improve our effort to groom home-grown talents to build international companies. And yes, stop saying that the odds of happening is slim!


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8 thoughts on “Is Singapore Economy In Danger for Long Term Decline (Part 2)? – The Need for “Penetration Model”

  1. As usual, good read for a rainy day at home. It is never too late for us (as individuals and as a country) to recognise our shortcomings and do the right thing! One thing for sure, it is better than not knowing and not trying!


    1. Hi Kev,

      Thanks for the rainy read! Hope it dun add more chills.

      Yes, it’s ok to err, but it’s not ok not to acknowledge it, and not trying at all is a sin especially as a leader who carries huge responsibility on behalf of other people.

      Honestly speaking, the people also need to take a lot of responsibility! We, the citizens of Singapore also need to learn to be forgiving!

  2. Hi Rolf,

    My take is, Singapore has been trying to move to penetration model for years. It seems that we are only focus on seduction because we seems to do well in that model, in fact so we'll compared to penetration.

    Govt led trade talks/ agreements and GLC leading the way into China, etc. However, how do we have a global footprint? Or at least region footprint with mass and not selected few?

    I have not travelled widely but when I read biographies, it seems network and trust could be a barrier. Not just knowing someone, but having done business and trusted someone and going elsewhere with a JV first.

    Many seems to take that path. Govt lead trade talks are a starter.

    But even with a good partner, the odds of failure seem high, esp for SMEs and if there is a demand gap to be filled or created, why would the natives want to JV with us ?

    I am also a concerned Singaporean as I worried that seduction might not be working well when we cannot get our workers out of dorm and everyday I read about percentage of Singapore core.

    1. Hi SI,

      Yes, we tried but not successful, because our focus of economy is on financial services and real estate. Science and tech companies provide more nicheness to penetrate, while service industry is more attraction in nature.

      Actually I am into various Engineering companies both local and foreign, the treatment of local clients big to smaller SMEs is not correct. They squeeze so hard. In the past, I love working with foreign companies more although revenue volume is lesser, but margin better. If I sell to local companies squeeze like hell, and make us lose money.

      In overseas, they have local-support-local, here, local-squeeze-local. To penetrate other region, our core in SG must be built first.

      Also, while our Engineers studied one of the hardest in the world with so many modules and hours in uni (I am one of them), the recognition given to them in work is rather shitty! In some overseas countries, where Science/technology are the focus, there is enormous respect for Engineers. The Engineer pay can be substantially higher than the Manager.

      Singtel failed in India and barely ok in Australia. China so far, we have nothing there except CapitaLand and Keppel Land.

      The SG mindset need to change, that is first step. However I doubt we can because this culture of Top down squeezing will never be able to change! The spirit trend of any SG leaders, are also top-down squeezing. Unless we are China, India with big population, this can work. But being small, we cannot do that. By contrast, in many overseas EU countries I mentioned, everyone has total respect with everyone regardless of where you are in the supply chain. There is equal respect to suppliers as well as clients.

      The mindset is, we need to let our suppliers earn also, then they can survive and support us! Here…..typically, let us squeeze them dry, because the top also squeeze us! In my work, I always have a chat with our purchaser and ask her/him treat suppliers with respect and both of us need to earn money.

  3. I think it has something to do with the way with the same education system. The government tends to restrict creativity as it wants everyone to "obey and listen" basicaly they want to control the minds of the population. This stops people from thinking outside the box.

    1. Hi Snake, I agree with you that we are more obeying than thinking and creating. Asking questions also helps creativity. But sometimes we are not allow to ask.

      My next post answer to the education system that I think is not perfect and too high volume of homework and hours, rather than stimulate thinking and shaping mindsets. However, I think this is not core reason. Instead it is the environment created.

  4. G'day Brolf. another-rainy-noon-monday!

    food for thought: would Anthony be willing to be such a risk taker, if his grandfather is not who he is?
    same for Tan min Liang. he comes from a very wealthy family.
    dont get me wrong, i'm not doubting their capabilities (being accepted into harvard is no easy feat!and so is managing a coy with thousands of people); but i am referring to that first step mentality, when they decide after graduation, that they can venture out.

    they have what we dont have: a safety net aka backup plan if they fail. there is nothing much to lose, except that few 100Ks of chump change.

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