SINGAPORE should relook its economic growth model in an era of tighter government regulation and multilateral oversight that could evolve in the aftermath of the global financial crisis.
Professor Linda Lim from the Ross School of Business, University of Michigan, told the Singapore Economic Policy Conference yesterday that the growth model that has served Singapore may be out of place in a changed environment.
Prof Lim said the growth strategy - the 'EDB (Economic Development Board) model of give them a tax break and they will come' - has both tried to do too much and achieved too little in terms of delivering high and secure incomes and living standards.
'We've 40 years of savings and repressed consumption, so do we throw it at UBS and Citigroup and lose 60 per cent of the value, or do we use it for ourselves?' said Prof Lim, a Singaporean and a frequent contributor to The Straits Times.
Instead of letting the state make big bets on a few major, capital-intensive, projects dependent on foreign capital, labour and skills in which they have no intrinsic comparative advantage, it might be worthwhile to consider releasing capital and talent to local entrepreneurs, she said.
These people can innovate and create value in smaller but nimbler locally rooted enterprises, she added.
Prof Lim said that a national government, for example, should not use domestic savings to create employment disproportionately for foreigners simply in order to claim success in establishing a particular sector of its choosing that may not be validated by underlying market forces.
Singapore, she said, can become a 'global model' for environmentally-friendly buildings and lifestyle.
Other clusters of 'regionally integrated' economic activities might be in the creative fields of traditional and modern Asian and Western arts and culture.
Another cluster is social and health services in, for example, developing policies, systems, products and services for an ageing population, Prof Lim said.
'Don't think of yourself as an outpost of a declining empire, or a second Shanghai or a second Boston. Why not be a first Singapore?' she told the audience of economists and academics.
[I would like to see more local entrepreneurs. Unfortunately, true entrepreneurs are few and far between. The ones we get are usually those who jump on pearl bubble tea, sushi counters, papa roti, peanut pancake, and other fads of the day. Besides Qian Hu, Creative, and Hyflux no other entrepreneur springs to mind. And Creative hasn't had a new big thing for a while. ]