Why startups need lawyers, not legal templates

By Mark Goh Aik Leng, Founder and Managing Director of VanillaLaw LLC

Article first published by Tech In Asia

Ask any entrepreneur who is in the early stages of funding their business about their priorities. There’s no doubt that funding, growth, and product development will be among them (plus caffeine, of course!). Somewhere at the bottom of their priority list will be all their legal matters. This is understandable for growth-orientated startups.

Additionally, some entrepreneurs think that lawyers are prohibitively expensive and that legal templates can be downloaded from the internet. This is common—but wrong. Such a mindset can lead many successful startups to wind up their business or something worse.

This fellow could save 

There are over 2,000 startups in Singapore and the city-state has been justifiably named as one of the top 10 startup ecosystems in the world, with 220 funding deals made in 2015. It is evident that Singapore has become quite the wellspring for entrepreneurs and startups, and while this is great for our economy, it does bring with it its own brand of problems and challenges.

These fellows from grief as they grow their business

Many first-time entrepreneurs are sometimes so overwhelmed by the bustling activities and the ins and outs of running a new business that they tend to overlook legal fundamentals which ensure protection if things go wrong.

Unfortunately, the cost of legal services is often daunting for startups that may have limited funds. This makes sense, with the market rate for a website’s terms of service (prepared by a lawyer) at approximately US$2,100. Bills could add up if you include additional vital documentation such as employment contracts and partnership contracts.

The surprising reality

One in 10 startups fail due to legal reasons, many of which could have been avoided if basic legal matters were taken care of properly. This happens because these business owners either tried to use a contract template off the internet or never sought legal counsel from a lawyer.

It is understandable if they were concerned about legal fees. But dealing with issues with legal documents and having to appear in court to settle disputes will cost them so much more. This is a classic case of being penny wise but pound foolish.

A client’s case from before comes to mind here:

There were two young Singaporean entrepreneurs (Company A) who discovered a way to make special industrial ovens that were fundamental in baking microchips. They were based in the US and went to Taiwan to find an industrial oven manufacturer (Company B).

By this time, Company A had secured millions of dollars in the form of pre-orders. They knew they had to produce the ovens fast, but they also knew the importance of legal protection. So, they downloaded a legal agreement document template off the internet and made modifications without consulting a lawyer. Through this, they secured their position as the sole distributor of the ovens in the US—or so they thought.

Everything was well until 5 years after the initial launch. Company B found a loophole in the agreement signed by both companies and used that to terminate the agreement and sue Company A for damages. This apparently came off the back of late payments and other breaches in the original agreement committed by Company A.

Company A, embroiled in lawsuits, eventually had to wind up. Meanwhile, Company B repositioned themselves as both the manufacturer and the distributor of the specialized ovens in the US, essentially taking over the entire market.

The changing reality of the law

In the past few years, we observed that there has been a rise of companies that make use of technology to create legal documents for multiple types of situations. This is an improvement from using templates without the counsel of a licensed lawyer. Innovative individuals have made this their core business, leveraging on the savings their clients could enjoy with their service/product. For businesses with limited budgets, like startups, such a service is an ideal way to make sure they have some form of legal protection for their business.

The legal landscape is set to change and face-to-face consultations—the traditional way lawyers conduct their business and one of the main reasons why legal services are expensive—may soon fall out of favor.

A balanced approach

Looking at the legal challenges startups face and the changes that are already shaking up the legal communities in Southeast Asia, there is an aspect of this entire issue that can sometimes be forgotten—considering the mindsets of startup owners and their legal needs. Legal protection is important for businesses, but it is not always as simple as using a program that generates a draft of a legal document and hoping or assuming that it is the right type of document for your business.

It might be more accurate to say that currently we are in a middle ground, where technology helps to alleviate some of the basic and labor-intensive ground work done by lawyers (which is normally charged directly to the client). But we will still need to see qualified lawyers giving legal advice to make the content of legal documents more suitable for their clients.

A cost-efficient, technology-oriented service coupled with face-to-face consultations with lawyers might be the best way to give business owners true peace of mind.

Yellow Fever

On 12 June 2018, Singapore hosted a historic summit between Donald Trump, the American President and Kim Jung Un, North Korea’s leader. This was the first time ever that the President of the United States of America, who is often called “Leader of the Free World,” stat down and talked to the leader of the world’s only communist dynasty.

Whatever one might feel about Donald Trump, the world can only hope that his gamble pays off and the North Koreans decide to make peace and get rid of their nuclear weapons. The world can only hope that the younger Kim will become an enlightened leader who leads North Korea into peaceful prosperity.

While we may wish for good things to come, the odds are they won’t. The Kim Family, which has run North Korea since it was founded in 1948 have proved to be very good at holding onto power despite one brutal war and virtual isolation from the rest of the world. The Kim family are very aware of the fact that nobody invades countries that actually have the bomb and have shown a willingness to use it. The Americans were happy to get rid of Saddam Hussein in Iraq because they suspected he had the bomb but when it comes to North Korea, which has the bomb – everybody sits down to talk. Every North Korean watcher has said that the Kims know that their survival depends on having nukes and even dares to dream of the Kim dynasty surrendering their nukes.

If you look at the document that was signed, the young Mr. Kim only said he would “work towards the denuclearization of the Korean Peninsula.” He avoided committing to a time frame or letting international observers enter the country.  In addition to that, the American President who had been insulting towards him a few months ago (“Little Rocket Man,”) transformed into the cuddly father-figure that the North Korean never had. The Trump who is old enough to be Mr. Kim’s father could not stop gushing about Mr. Kim. He called him “talented,” and said that he “trusted” him and most importantly talked about the “special bond” that was forged. One the main press briefings where Mr. Trump waxed lyrical about his new favourite son can be found at - https://www.youtube.com/watch?v=00G-mUn12os

In fairness to Donald Trump, he seems to have caught a disease that many Caucasians get when they enter Asia – Yellow Fever or the disease that robs otherwise sane and capable people of their sanity and reduces them to blabbering idiots. I remember being in court during the Ku De Ta trademark dispute. This monumentally successful night club in Bali was built by a visionary Australian called Arthur Chandros, who had brought in a few of his fellow Australians and Brits into the venture and somehow, when the relationship collapsed, everybody was left arguing over nothing. The reason was simple – no proper agreements were drawn up. When put on the stand, everybody just said, “He’s my mate – we trusted him,” and “that’s how it works out here.” I remember one the men who had testify was a very successful pub owner in England. In the words of PN Balji, the founding editor of the Today Newspaper (and the main contractor on the job), “This man is a big timer – would he do this in England?” The answer was obviously no – he wouldn’t have reached his status in England had he behaved the way he behaved in  Bali.

The most common cases of Yellow Fever occur in older White Men, whenever they get a much younger Asian girlfriend. The ingredients of the relationship are usually obvious – he rediscovers his youth and the joys of being loved by a young sweet thing. She finds the meal ticket for herself and her family. 

I shouldn’t be critical of this phenomenon in as much as it has alleviated many people from poverty. If a man can bring up not just the girl but her mother, father, brothers and sisters, he’s managed to alleviate at least four people from the reality of abject poverty (which remains the case in rural Asia.)

So, on one level you could say that this is a fair exchange. Guy gets youth and girl gets to be a faithful daughter by bringing up her family in life.

However, the question remains – does every party in this type of relationship understand the exchange. The Asian continent is filled with Western men who were in senior corporate positions giving away money to their “girlfriends,” and then discovering new depths of disappointment when the girlfriend does not live up expectations.

In many cases, you’re looking at the guy and find yourself screaming, “Dude – you’re an executive corporate vice president (usually of a world respected company).” Somehow, the brains and guts that got the guy to this top job paying barely legal amounts of money desert him when it comes to a bit of yellow or brown pussy.

Perhaps it’s a culture thing. While love does happen between social classes in Asian societies, Asian, particularly the Chinese are better at compartmentalizing things. I think of the novel “Nobel House” by James Clavell where there a brothel owner explains to her girls, “If the customer is Chinese – no need to pretend to like but if he’s Gwei Lo, you must pretend to like it.”

In a way, sex is pretty much like life. It’s more fun when the other party has fun too. To put it bluntly, most men would kill themselves if their partners didn’t pretend to orgasm. However, when it comes to the “paid” variety, many Asian men understand there’s an exchange involved and she’ll do enough to make you feel happy but that’s about it. Asia’s brothels are filled with Western men who forget that there is a correlation between the intensity of the female orgasm and the amount paid.

The Asian continent is filled with many great opportunities for things like business and love. For Western men, the allure of Asia is particularly strong, especially when it comes to women who may seem prettier and demurer than what they have at home. It’s especially tempting when women throw themselves at you merely for being who you are.

Yet, the rules of the game of life remain. While Asia may have things that appear different, Asian people are not less different in what they want from anyone else and I’d ask many White men – “would you behave that way at home?”

So, while the President might think that he’s found his new favourite son, let’s not forget that the Kim Dynasty of North Korea hasn’t changed – they’re still a bunch of power hungry murders who have lied and cheated the rest of the world when it has suited their needs.    

Healthy Endings

I recently had an article of mine published in the Straits Times, Singapore’s national (only) newspaper. I decided to catch onto the fact that there were several letters in the forum talking about how marriage was the bedrock of stability and society and anything that made ending it easier was bad for society and so on and so on. I decided to argue that the problem wasn’t so much the ease of divorce but the ease of marriage that was the cause of societies problems. My letter can be found at https://www.straitstimes.com/forum/letters-in-print/ease-of-getting-married-may-be-the-problem.

[The premise of my letter is that instead of making divorce more difficult, one should make marriage more difficult. As thing stand, it’s ridiculously easy to get married. One merely needs to be over 21 and able to find witnesses. Everything else is a formality and I stick by the argument that nobody really values things that come easily.

My letter got a few likes, including likes from two lawyers and my favourite Pudding decided that my letter was a total waste of a good read because my premise was faulty and I should realise that society does respect marriage hence it makes it easy to get married and very difficult to get divorced (I’m on my second marriage and she’s in her second relationship).

The next day, the press decided to run another article from someone who appears tragically young, who decided to start quoting from a political lobbying group called the Institute for American Values, which argued that unhappily divorced adults were not happier unhappily married adults and that children of unhappily married adults were not better off than divorced parents. That letter can be found at:

https://www.straitstimes.com/forum/letters-in-print/hold-on-to-time-tested-values-amid-rapid-changes?&utm_source=facebook&utm_medium=social-media&utm_campaign=addtoany

Such articles have the benefit of making me so happy that I come from a patchwork family and have been continuing the task of adding more patchworks. I think too many people miss the point of marriage or get stuck in a some ideal of what it should be.

I’m either the best person or the worst person to talk about this but I believe that marriage is about partnership. It’s about two people who can’t live without each other despite known all the awful things about the other. A married couple should have shared ideals and goals thus having something to keep the individuals together despite the differences that individuals bring to the table and yes, physically attraction should also be part of the game.

My marriage to Gina failed from day one because we didn’t have shared goals. There was nothing in the union to bring and keep us together. OK, that’s not quite true – the sex was fantastic and part of the reason why I allowed her to blackmail me into signing the paper was the fact that I didn’t want to lose a regular sex partner. She on the other hand wanted me to buy a flat quickly and to “settle down.” She was so happy when I got a job in the civil service (teacher), which I couldn’t run from fast enough. The idea of “this is the rest of your life,” sent shudders down my spine. In the words of the late Old Rogue, “She had fire-place written all over her.” I think she got violent when it was clear that I didn’t share her goals.

My marriage to Huong is working out better. Despite our many differences, there are things that keep us together. She’s someone who is more than a quick shag in the bush and hence we struggle to build a home and family and find unity in the struggle of building that.

Marriage is a partnership which should ideally bring out the best in both parties. One always thinks of the saying, “Behind every good man is a woman,” and my mother actually says that her marriage to my Dad made her a more confident person.

I don’t dispute the fact that a stable marriage is the best breeding ground for socially well-adjusted people. The African-American Community in the USA has provided us with plenty of statistics linking criminal behavior to dysfunctional families.

What I do dispute is the notion that a happy, well adjusted family means the biological parents remain together and I disagree with the notion that children become worse off when their parents separate. My sister once said that she felt offended when the discussion came to difficult people being the way they were because they had parents who separated – we weren’t arseholes and our parents had separated (many times as a matter of fact.)

I look my situation and I believe that while a part me wishes my parents marriage worked out, I don’t believe I’m any worse off because it didn’t work out. If anything, I got lucky in that respect and it’s probably in later life, when I got married and divorced for me to appreciate them. My parent’s marriage failed but they didn’t fail me (even if they might disagree whenever I fuck up).

Why do I say that? I believe that my parents had the chance to do what they did for me because when their marriage reached the stage where it was clear they couldn’t live together, they had a chance for clean break. The marriage ended and both of them could move on.

To my mother’s credit, she only brought decent men into our lives. Both stepdads, Lee and Thomas loved Tara and I like their own. The patchwork family, particularly with the American family, somehow gelled. I think I’m the only person in my social group who gets invited to an ex-step-nephew’s wedding. Biology was never an issue with my stepdads, who took their role of being instant dad’s quite seriously.

My mother also worked hard to ensure that I kept my relationship with my father healthy. I’ll never tire of mentioning the fact that she would push me to write letters (pre-internet) to my Dad. I’d protest but she’d push on and guess what, I have a somewhat normal relationship with my father.

I also credit my Dad for ensuring that the financial support would always be there for both me and Max, despite whatever differences he had with his ex-wives. Both of Max and I have never really starved and both of us are educated men because my dad ensured that the funds were there. My final year of university coincided with one of his darkest points financially and he told me, “You will finish university even if I have to beg, borrow or steal the money.”

With my family background, I cannot argue that biology is essential in making the family unit work and it’s quite clear that I am a beneficiary of someone who benefited from a situation that most people would call disastrous. I can appreciate that I’m lucky in the sense that I had the right elements – namely the adult figures in my life at the time happened to be decent enough people who found a way of working things out for my benefit. Not everybody gets that lucky in the genetic lottery the way I do.

Decent people who make bad situations work are hard to find and I guess you can that the statistics hold – children of divorce parents get fucked up.

So, what about the guys who stay together for the kids or worse – to preserve their legacy. I think of a friend of mine who is a naturalized citizen who built up a successful business. This chap married a woman who extracted a heavy price from him – her family have moved into his flat, she’s slowly but surely taken over operational control of the business and her friends are forced upon him. The man is so happy with his family life that he’s out drinking every night and he spends his waking hours plotting how to avoid going home. The kid is left to the grandmother’s (a heavy gambler) care because both parents are officially “too busy” for him. The kid is growing up materially well off but I’m not sure how fun it is growing up in a household where dad does everything possible to avoid mum and gang.

I don’t think it’s respecting marriage to keep unhappy people together. Yes, nobody goes into marriage hopping it would end but we have to accept that people do fall out of love and letting people have a clean break is actually good for everyone. I think decent people who become anything but decent when they are around their significant others because that significant other is a source of pure misery.

You don’t respect an institution or protect minors by forcing miserable people to stay in a situation that is increasing their misery. You help them find a clean break that works out in everyone’s interest.

The People You Snub.

One of the biggest fights that Gina and I had in our turbulent marriage was the fact that she always felt that my parents and the people around me snubbed her. It didn’t help that at the time, I was living with my father who lived in a swish condominium opposite the Shangri-La Valley Wing (a place often inhabited by VIPS like former Chinese President Zhang Xi Min) and she lived with her family in a Housing Development Board Flat in the North of Singapore. I remember going out with her on an occasion and not wanting to follow her home and she lashed out at me, yelling, “Is it because I live in an HDB flat.” Another of her out burst was against my family’s group of friends, who consisted mainly of prominent members of the advertising community – she felt they were weird and at one stage stressed that her father’s business associates were just as rich as the well to do executives my father knew.

In fairness to my ex-wife, my friends and family really did think I was married to trailer park trash. In fairness to my family and friends, they disliked her for reasons other than the ones she felt. My Dad said, “It’s not about snobbery – her father could probably drown me in his cash,” and in fairness to my Dad he is actually quite comfortable with Huong aka the Ruthless Half, who has a better claim to come from the gutter than Gina ever did i.e. Vietnamese village girl who barely speaks English, as opposed to Gina who did go to a recognized university of sorts.

While my ex-wife and family didn’t get each other right, I bring up the topic of how she perceived by family because it highlights one of the major issues of our time – namely the cultural and communication gaps between people. We often assume that culture gaps are about things like race and religion. The talking heads of the West often enjoy talking about how you’ll get a clash of “civilizations” or about the “North-South” divide and the struggle between light and dark-skinned people. While these are valid discussion points, I believe the biggest cultural misunderstandings and conflicts happen between “social” classes in the same place. Trump was elected by White Skinned people from rural Pennsylvania who lost touch with white skinned people in Manhattan and Beverly Hills. I live in Singapore am living on the bridge of being in the world of corporate restructuring and waiting tables.

I’m something of an oddity in both worlds and I guess that gives me an insight into both. The funny thing is both worlds are very similar. People in both want the same thing – namely to earn enough money to build a decent enough life for themselves. Yet, they’re incredibly unable to understand the struggles of the other. While collar people for example, cannot understand why I would ever want to work a blue-collar job and the well-meaning ones often feel they have an obligation to rescue me from the dregs of being a blue-collar worker. 

I can appreciate my well-wishers. Blue-collar work is financially unrewarding for the hours that you have to work. In my blue-collar existence, I earn the princely sum of $10 an hour and I’ve worked there for six-years. My co-workers are barely paid S$2,000 a month and they easily work eight hours a day and six days a week, including public holidays (which is actually the busiest time to be in a restaurant). The mathematics aren’t exactly in favour of the worker.

Having said that, I don’t understand why people feel that I need to be “rescued” from my blue-collar existence. Just because the financial rewards are lesser, it doesn’t mean that the existence is without benefits. One of the benefits of being in a blue-collar existence, for example, is that you have tend to have peace of mind. When the restaurant shuts, I’m not obliged to think about the place until the next time I enter the place. By contrast, in my existence in corporate restructuring, there’s always the nagging feeling that I have to jump at a moment notice because of this or that.

White-collar people also have a tendency to forget that life exists beyond their own and the worst part is that they forget that life is often fluid and the way of the white-collar worker isn’t the only way. Which brings me back to the point that Gina once made – her father’s friends, aka the small time Chinese businessmen were as wealthy as the high flying multinational executives that my parents knew. She’s right.

The executive class often overlooks the fact that knowledge isn’t always from books and more importantly, the key to success boils down to guts. My former father-in-law sold eggs for a living and somehow managed to put two kids through to university in a country that doesn’t subsidize much. Think about it – the old man had to sell a commodity where the margins are calculated in cents and its easy to get undercut by the big boys and somehow, he managed to put his kids through to school. I stress this point because how many of us can gather this type of money by doing that?

People from the rougher side of life have knack of looking at things that matter. I give the example of Zen, my favourite flesh ball from the rough streets of Geylang (Singapore’s red-light district). Somehow, flesh ball has a way of measuring people up pretty accurately. How does she get this ability? She’s probably been screwed more than enough times than most to have learnt the hard way. I take the example of Huong, who looked at a girl I had brought to a function – she said, “That girl only wants money from you.” She could pick this up from one glance. Interestingly the young lady in question said the same thing on my other half but qualified it as, “I’ve done my research and it’s proven that Vietnamese girls only want you for money.”

They also network much better and as my father said to Huong on his first meeting – “You are from a third world country where people still help each other. “I look at the communities formed by the foreigners from the poorer parts of Asia and I notice that people help each other and that’s how they manage to thrive.

Somehow, my white-collar friends can never understand how people without a degree can obtain money. It’s such a pity that they have this blind spot because if they were only able to look at the things that matter, they’d find a way of prospering for themselves too.

I remember going to see the fancy high-priced lawyers we were working on in a case. The client was an old Chinese businessman who could not speak English and who operated out of a hole in one of the streets that needed to be cleaned up. The client threw cheques at the lawyers. It occurred to me that it wasn’t the guys in the suites throwing the money……………..I believe this is something many young professionals need to understand about the way the world works.

When the Boys Don't Come Home/

The issue of safety of our national servicemen is once again in the news thanks to the death of Private Dave Lee Huan Xuan. Private Lee, a young Guardsman (the second toughest group in the Singapore Army after the Commandos) had completed an 8km fast march and had to be treated for signs of heat stroke. He was pronounced dead on Monday 30 April 2018, a mere four months after his enlistment in January of this year.

The family is understandably upset and they want answers. The SAF is once again in a situation where it has to answer for the life of a young man.

Coming from a batch of National Servicemen that lost two of its members in a tragedy some 21-years ago, I feel obliged to comment on the death of every young national serviceman because it says many things about our society just as it did all those years ago when we lost Ronnie and Yin Tit.

Based on the available information, it seems that this case is a tragic mishap. Even in the dark days of the late 1990s, it was always standard practice for every trainee on every fast or route march to consume water. It was always standard practice to ensure that was the trainees got plenty of rest the night before and it was, even then, standard practice to ensure that such marches did not take place during the hottest time of the day. Given the increased knowledge in medical science and the pressure on the SAF to ensure safety of its soldiers, I believe that the safety procedures should have become even more stringent.

The commanders need to answer one basic question – did they adhere to basic safety procedures. If the answer is no, then the chain of command needs to answer for it. The organization needs to show that it did everything humanly possible to ensure that Private Lee was fit enough to on this march.

As with the case of Private Dominique Sarron Lee, who passed away coincidentally on the 9^th of March 2014, the parents have the internet. Unlike Ronnie’s parents, the parents of Private Dominique Lee and Private Dave Lee have a venue to demand the adequacy of justice. What do I mean by that?

Back when Swift Lion took place in 1997, the Ministry’s first action was to convene a “Committee of Enquiry,” which was chaired by Tan Ghee Paw (who would be PUB Chairman when I was working at BANG PR on the PUB account). The job of the Committee is to look into the facts and to find out what happened. If you look at the news article into the death of Private Lee ( https://www.straitstimes.com/singapore/national-serviceman-19-dies-after-heat-stroke) – you will note that this is standard practice.

The question is, what happens after the Committee has done its job? In Ronnie and Yin Tit’s case, the answer was bugger shit all. In the reservist trainings that I went to after the incident, we were always told – “Oh live firing is perfectly safe – we found out that DSO (Defence Science Organisation) had bought a faulty fuze from Island Ordnance Systems (http://www.islandordnance.com/cat.asp?sessid=31756635) , an American Company that outsourced the manufacturing of the fuze that killed Ronnie and Yin Tit to the Chinese. The action taken can be summed up as “we’ve now found a new supplier so everything is OK.

Human beings have short memories. We allowed the families of our fallen comrades to get over their grief. Time healed the wounds and that was that.

I don’t know about you but I have difficulty with that and reading reports like the report on Private Dominique Sarron Lee’s death (https://www.theonlinecitizen.com/2016/04/18/pte-dominique-sarron-lees-brother-decries-inadequate-punishment/) makes me all that more cynical about the system.

I don’t blame the SAF for existing. Singapore does need an armed force to deter potential aggressors. I don’t dispute the fact that we need the national service system because we don’t have the manpower to field a large full-time army. I even see the non-military benefits of having national service – I wrote my dissertation on the subject.

Having said that, the SAF must remember that it is a “people’s force.” Like the rest of the government, the military exist to serve the people and not the other way around. Commanders are responsible for the safety of their men and I believe in what the Great American General George Patten says – “My job isn’t to make sure my boys die for their country – I’m there to make the other son of a bitch die for theirs.”

A military commander is given greater privileges than his men (the military remains mostly men) and so should his responsibilities. Holding back someone’s career and pay for being negligent over training standards will never feel acceptable. Telling us that it was all bad commercial practice isn’t enough.

We’re not mercenaries. We don’t fight for out country because the pay is good. I remember my battery commander, Captain Lam Sheau Kai (Now General Lam, Commander Combat Support Service) asking us if we’d be willing to continue the mission right after the news of Ronnie and Yin Tit’s passing. Our reply was simple – it this was war, we’d continue no questions asked – but it wasn’t – it was a training fuck up and we didn’t see why we should be happy (we were also asked if we would follow orders – our reply was that there was no question about us following orders – the question was whether we would be happy about it.)

As humans, its easy to die to protect those you love or for the ideals that you can believe in. Asking someone to give you his or her life when your track record suggests you have your material gains at heart is another matter all together  

Don't Call me Boy

It wasn’t my finest moment today but I ended up storming out of the office after throwing a few kind Hokkien words at the Living Desert who had made the mistake of commenting of my cleaning the company shredder after jamming it. It didn’t help that the company Grinch, an Irishman who reads Breitbart News, decided to add in his ten cents to a machine he has utterly no connection with.

I’m not proud of being in a situation where I couldn’t think of wanting to do anything else except to do damage to someone who usually inspires feelings of puppy dog cute and to the Grinch. I just saw red and it took control to prevent myself from doing violence on the spot.

However, what I will say is that this incident evolved around the shredder – a machine that is often used by lawyers, liquidators, accountants and anyone who spends any length of time around pieces of paper regarded as “confidential,” or “classified.” The shredder in this office is often used as it is shared by at least six-people dealing with special documents. While the machine is used by six-people, only one person seems to have any knowledge of how to clear the shredder – me. While it doesn’t take a degree in rocket science to clear a shredder, it usually requires a little bit of movement beyond the office doors and its considered degrading work by people who have qualifications. So, when two people who have never even cleared the shredder decided to become experts on clearing the shredder, I snapped.

I raise this very personal incident because it touches on one of the most prominent subjects today – namely the subject of inequality. If you look at statistics relating to the subject, you will note that the world is becoming even more unequal, where the “haves” seem to be getting hold of more of the pie and share of the ever-increasing number of “have nots” seems to be growing regularly.

Singapore, the country that I’ve called home for the last two decades is a particularly good example of how the ‘haves’ have visibly increased their share of the pie and the ‘have nots’ have seen their number grow and their share of the pie shrink. Our hyper efficient government takes great pride in the fact that an increasing number of billionaires have decided that having a home in Singapore is a necessity and at the same time thinks nothing of exploiting people from less fortunate countries. When you talk about the maids being paid a “princely” salary of less than SG$500 a month, the standard reply is that, “It’s a lot of money where they came from.”

One of the most interesting things about “inequality,” is the fact that it’s not produced many revolutions. You would expect the ‘have nots’ to get angry enough to do something pretty violent and nasty in order to get a more “equitable” share of the pie. However, they generally haven’t. Why is that?

The answer, according to the former Governor of the Reserve Bank of India, Dr. Raghuram Rajan, is chance or rather belief in the system. Dr. Rajan argued that the poor don’t rebel if they believe that there’s a chance that they can improve their lot or if not the lot of their kids if they merely work hard and play the game well enough. 

Rebellions only happen in places where the poor see their lot as being stuck there for all eternity no matter what they do. America, despite the inequality remains fairly peaceful. Every penniless migrant to America believe that he or she can achieve the “American” Dream if he or she works hard. By contrast, the Middle East got shook up by the Arab Spring because people found it impossible to achieve anything for themselves whatever they did.

The other key factor is behavior. A few years ago, the Algerians in Paris rioted because they were tiered of being addressed as “tu,” (the informal French version of “you,” usually used by an elder when addressing a junior.) A similar point was made by “African-Americans,” in the deep South who rioted in the 1960s – they were tired of being addressed as “boy.”

I believe here lies the crux of the matter – people can accept income inequality but up to a point, they won’t accept being treated as anything less than human. The poor are not asking for a hand out nor are they asking for pity. What they are asking for is a bit of dignity and respect.

I think of the Little India Riots in 2013, when a group of Indian and Bangladeshi workers rioted and the police had to struggle to contain the violence. Much of the chatter was around how people of South Asian origins could not handle their liquor and didn’t understand our local culture of respecting law and order.

What many people forgot was the fact that an Indian worker was killed and when the police came onto the scene, they seemed more intent on protecting the bus driver who had run over the worker than in providing justice for the worker who had been killed. It was, as they say a clear-cut case of disrespecting people.

The rage of an individual is an ugly thing. The rage of a mob is worse. The best is to ensure that there is no reason for rage and in a society of ever increasing despite between the have’s and have nots is to ensure that those who “have” remember to allow the “have nots” to see a glimmer of hope and to respect menial task as a stepping stone into better things.

SMEs – the challenge of creating jobs amidst innovation

Can Singapore show the way?

By Gurdip Singh - Correspondent Press Trust India (PTI).

Published in http://www.fii-news.com/smes-challenge-creating-jobs-amidst-innovation/

Girija Pande 

Technology is fast changing manufacturing landscape for large enterprises in every country. These enterprises are consequently restructuring and often downsizing. Consequently it is essential to simplify the regulatory architecture to create meaningful jobs and innovation in the Small and Medium Enterrise (SME) sector in future.

Ancillary links to large industries with long term supply/services contract to help scale and internationalise;
Availability of trained manpower; and
Burden of regulations which cost and more importantly waste precious time.

As India progresses with growing its Micro, Small and Medium Enterprises (MSMEs), Singapore-based industry veteran Girija Pande shares his views on recent developments in SME sector globally – especially reviewing what Singapore is doing to remake this sector for future challenges.

Pande’s thoughts are important and urgent both for Indian MSMEs/SMEs and the regulatory agencies in India. India is one of the world’s fastest growing economy with millions of MSMEs/SMEs upgrading to be Tier II or Tier III players in the global manufacturing space.

 Girija Pande, Chairman Apex Avalon Consulting Pte Ltd of Singapore and Past President of Tata Consultancy Services Asia Pacific, writes:

Quote:

I must confess I have like many others – including many governments of late – taken a strong liking to SMEs and their future.

With Digital tech revolution creating Manufacturing 4.0 with Robotics, Artificial Intelligence (AI), Internet of Things (IoT) and Cloud-based technologies, it is clear that in the medium term, large industries in manufacturing or services will need to ‘reinvent’ themselves to survive.

In this decade-long restructuring, these enterprises will certainly not be able to create large scale jobs as in the past, in fact many of them will be downsizing employment.

All Governments have understood this oncoming disruption – hence the sudden priority on growing MSME/SME sector in each country.

India needs to urgently grasp this disruptive moment and focus on how to accelerate employment in the SME sector by deregulating it as fast as possible.

Globally, SME sector – which includes both services and manufacturing including startups, listed/unlisted companies and the non-profit or social sector – will be the one to create bulk of jobs in the medium term in most economies – some even in the new gig economy.

My contention is that for SMEs to continue to innovate and create meaningful jobs for the bulk of our relatively lesser skilled brethren, we need to prioritise rightsizing the current SME regulatory architecture, amongst other measures required to keep them going.

With a bit of innovation applied to a dream, this store can become

Consequently, from the point of view of employment any regulatory change which can improve their survival chances is welcome, certainly for the vast number of ‘mom and pop’ businesses.

I have observed these SMEs closely from many angles. I have created one, mentor a start up, serve on Boards of a Fintech Fund and a listed SME company. I also work with small social organisations which deliver very useful services to the community.

These have given me insights into their unique problems which were not apparent to me when I was running large global companies around Asia, the largest being Tata Consultancy across the Asia Pacific markets.

Challenges that these SMEs face can broadly be grouped under four broad areas:

Availability of risk and working capital;

Many solutions are being proposed in countries about how to tackle shortage of capital and manpower for this sector but it is the regulatory cholesterol which in my opinion presents the greatest challenges to their growth.

Singapore is similarly grappling with this challenge despite its well known efficient economy.

The Singapore SMEs are also ones which will create bulk of future jobs. Being a high cost open economy with manpower constraints, Singapore’s SME sector, unfortunately, faces greater challenges to survive in this volatile and uncertain world.

This Store 

The recently formed Enterprise Singapore (ES) defines SME companies being those with turnover under S$100 million -constituting nearly 90% of enterprises in Singapore.

Of these nearly 160,000 small/micro enterprises with turnover between S$1 million to S$10 million – constitute 80% of the total.

This could be a useful guide to define what constitutes SMEs.

These micro enterprises employ nearly half a million Singaporeans while all SMEs (with turnover under S$100 million) employ nearly 2.2 million – over 70% of the total employees in Singapore.

Most of the focus has been on provision of finance and Government agencies in Singapore have done a reasonable job with grants and tax incentives.

Many trade associations – including my own, Singapore International Chamber of Commerce – are attempting to assist SME members with links to larger Multi-National Corporations'(MNCs) working on Industry Transformation Maps (ITM) created recently to improve enterprises productivity and to assist in digitising them.

These efforts are laudable but still not sufficient till we right size the regulatory architecture impacting SMEs.

This will require a delicate balancing act by many Government departments who need to be focussed on cost/benefits of each and every regulation and look to light touch where possible. Undoing regulations to promote ease of doing business is a major thrust of the current US government as well as the Indian government.

One shining example in Singapore was the waiver of compulsory audit of annual accounts of SME’s with turnover under S$1 million announced few years ago. Similarly not levying Goods and Services Tax (GST) on such enterprises. For start ups and micro enterprises such simple regulations are a boon beyond belief.

However, there are many more in the statute book which could be modified or eliminated pragmatically. Could we for example, in some instances, move towards reporting rather than approval based regulations in some instances?

SME’s will not need to wait for approvals but work to build or grow their enterprises and report compliance when done. Time is of essence for SMEs and anything that can be done quickly and painlessly can make a difference between success or shutdown.

Do we need listed SMEs to fill up pages on sustainability as required by Singapore Exchange rather than a one pager? Many other instances abound, I am sure and we will find them as we look deeper.

Singaporean bureaucracy has a sterling reputation for innovative thinking. For example Monetary Authority of Singapore (MAS) has taken an excellent lead to create a unique regulatory sandbox to allow startup Fintechs to innovate and prosper. This is likely to make Singapore a Fintech hub in Asia.

Is there a need to create such a regulatory sandbox for SMEs under Ministry of Trade and Industry or Enterprise Singapore, where myriads of regulations which impact them are reviewed in detail for their applicability to SME’s, some retired while others put in such a sandbox for trials.

It will certainly go down as Innovation Singapore style. It may also save many SMEs from possible extinction. Unquote.

-/fii-news.com