Entrepreneurship in Singapore
Abstract
Singapore has completed its catch-up growth phase and needs to find a new growth engine. Entrepreneurship can contribute to a nation’s productivity growth. The purpose of this chapter is twofold. First, a theoretical framework is presented, along with empirical evidence, to understand government interventions aimed at boosting entrepreneurship. Second, using the framework, the chapter discusses whether Singapore’s current policies are suitable for helping entrepreneurship. The theory demonstrates four reasons why government intervention is needed: (1) resource misallocation, (2) positive externality, (3) entrepreneurial human capital, and (4) tax and default policies. Singapore’s government has implemented various policies that potentially fix market failures and hence boost entrepreneurship. Going forward, focusing on internalising positive externality and improving entrepreneurial human capital could generate the highest pay-off for Singapore’s economy. Relatedly, attracting high-potential start-up firms, regardless of their nationality, would be beneficial given that such firms can generate synergy with local firms and create more local employment. Finally, allowing more debt forgiveness for failed entrepreneurs could be considered.