Does Singapore really need more people?

A city's size alone does not seem to result in economic growth or leadership
Richard Hartung, Today Online 3 May 08;

SINGAPORE'S population is too small to compete globally!

This constant refrain, tied to the concept that Singapore needs a rapidly growing population to sustain economic growth, seems to lie at the heart of the argument for increasing the population by millions.

The size of many cities at the forefront of innovation and economic growth in other locations, however, belies this need for a large population. Indeed, bringing in small numbers of the right people rather than just lots more workers, and focusing on creating the right environment for growth, may be more important.

Think about innovative cities around the world. In the United States, Silicon Valley immediately comes to mind. Not too far away, Seattle is the birthplace of Amazon, Microsoft and Starbucks. Around the world, top centres of innovation include cities such as Bangalore, Helsinki, Stockholm and Dublin.

It's true that the seven-million population in the Bay Area around Silicon Valley is larger than Singapore's, even though the population of the Valley itself is only about 2.5 million. Yet the populations of other centres of innovation and entrepreneurship are actually surprisingly small.

Seattle is at 3.4 million, Stockholm 1.9 million, Helsinki 1.3 million and Dublin 1.6 million. Bangalore's population of 5 to 6 million is admittedly larger than Singapore's, though not by much. Even when they are part of a larger country such as the US or India, economic development in these cities is local, and having a large population available in places such as Kansas or Kashmir doesn't enable innovation or growth in these cities.

One driver of growth is that these cities attract top talent from around the world. In Silicon Valley, about 35 per cent of the population is foreign-born and 17 per cent of Seattle's population is imported. In Bangalore, about half the population has migrated in from other cities in population-heavy India. Even Helsinki has the largest percentage of immigrants of any area in Finland. And it is not just numbers, as immigrants are usually more highly educated that the average population.

On the other hand, many of the world's largest cities certainly aren't recognised as centres of innovation and leaders in the competitive economy. The five largest cities in the world — Tokyo, Mumbai, Mexico City, Sao Paulo and New York — have populations between 17 and 28 million.

While it's true that Tokyo is known for adapting new technology well and New York is a financial capital, Mexico City or Sao Paulo may not top the global list for growth and innovation. Size alone therefore does not seem to result in economic growth or leadership.

If population size is not the key, then, what makes these cities thrive?

Mr Steve Poloz of Export Development Canada summarises the thoughts of many when he says that "today, the prime determinant for growth is whether a city is a catalyst for innovation. A city's rise or fall depends on how well it attracts the players — business, institutions, individuals — to interact, create and innovate."

What results in innovation? Leading author Richard Florida says in The Flight of the Creative Class that the drivers of innovation are the three Ts — talent, technology and tolerance. A nation that nurtures talent through education, develops technology with research funding and tolerates diversity such as women's rights or democracy or gays, he says, has a higher likelihood of attracting the human capital that will drive innovation and growth.

A city with the 3 Ts can have more innovation and higher growth than a city that just attracts lots of people.

Instead of size, then, developing a welcoming environment that nurtures talent and enables it to flourish seems more likely to drive growth than just population increases.

Two issues loom large for Singapore: First, Singapore may need to re-examine whether it has the right environment to attract talent, and how its environment is presented. A bourgeoning arts scene, allowing in same-sex partners and pouring money into research centres may help pave the road to success.

Yet, it is anecdotes such as censors banning movies and limited media freedom that attract attention. The image of the environment for one T — tolerance — could need improvement.

Second, attracting the right type of immigrants may be more important than sheer population growth alone. However, the people arriving to support the sectors currently driving growth here may not reflect the purported focus on talent development.

Even as research funding focuses on key strategic sectors, such as biotechnology and environment research, that epitomise talent development, the real engines of job growth are reported to be tourism, construction and marine engineering. Saying that high-end technology is central when lower-skilled jobs drive growth may make a second T — talent — seem suspect.

The successes of smaller, innovative cities indicate that population can be less important than other factors for driving economic growth. Instead, having all three Ts seems more central to success. Research funding initiatives show that technology in Singapore is here or on the way.

Enhancing the other two Ts — talent development for jobs that matter and a tolerant environment — to attract more talented people may be more important than sheer population numbers in driving growth higher.

The writer is a consultant who has lived in Singapore since 1992.