Managing Director of Vanilla Law
I read
with interest the response of “BeautifullyIncoherent” in his blog called “TheDyson Debacle- The Difference Between Foreign Investors and Local SMEs. . The thrust of his blog was to highlight the disparity in treatment
for foreign direct investments (“FDIs”); as against our local boys/girls who
are already invested here.
On the
whole I agree with his observations. I do understand also the underlying reasons
why we would want to roll out the red carpet to these FDIs. However, I am now
wondering whether such a practice has outlived its intended policy reasons?
When Singapore was just a developing country, it was a matter of survival that
we attract FDIs for money and jobs. I do not think anyone can argue against
such a policy and the success which it brought to us.
The world
has changed in many ways and is still changing. The most significant of these
changes is the ease of doing business overseas. The advent of the digital age,
has brought down the cost and barriers to doing business. This does not only
bring benefits for the large companies, but also smaller companies.
The irony
it seems, is that the larger companies have been quicker to appreciate the
change and have been quicker to adapt and exploit this change. To give an an
example; in order to shelter itself from tough tax regimes and uncertain
political climate like Brexit, they can now easily set up foreign HQ companies in
countries where the taxes are lower and the politics are perceptively stable.
Command, control and communications are no longer barriers, as there are a plethora of digital tools which are available to
overcome this.
When Dyson
announced in May that it was going to invest in a factory in Singapore and give
jobs here, did anyone not consider such a statement with a healthy dose of
skepticism? I would be very surprised if they were not questioned as to how their
plans could be better than attempts made by our local boys/girls back sometime
in 2010 to test electric vehicles use on Singapore roads and also grids to
support such use. What happened to those tests? What were the results of those
test by our local community? If indeed our local tests showed that it was not
feasible, why did people believe that a foreign company could do better than
our local findings?
Having
worked with local SMEs for more than 25 years, I hear from the ground that
people who are tasked to execute government policies do not have faith in them.
It appears that the top management has got their heart and intent right;
however and in reality when it is executed, the stumbling blocks are usually
the middle management.
If I had a
wish list, I would propose to these middle management people to have faith in
our local businesses. While there is some truth that they are slow to adapt;
there needs to be patience when working with them. They may appear rough on the
outside, but most are good people on the inside. It may seem easier and faster
to close deals with large FDIs, but this is a “short cut”, because we are not
naive to believe that these FDIs are here for reasons other than our tax regime
and our safe haven status.
It may not
be that our SMEs are uncooperative; but lack of skills on how to relate with
another person in a business setting.
It may not
be lack of innovative ideas; but lack the facility of language to articulate
their ideas. It may not be myopia; but lack of organisational awareness and
skills to manage and work in groups.
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