Resilience can help Singapore private equity leapfrog to pole position

Business leaders can take more cues from entrepreneurs in the region to encourage greater generation of ideas and innovation.

SINGAPORE'S recent budget announcements have been trade focused. Simplifying regulations, the launch of a US$5 billion private markets programme to encourage global private equity investment, and the establishment of the SME Co-Investment Fund III, to bring in additional funding, are all measures which boost the attractiveness of Singapore as a private equity hub.

Further, Enterprise Singapore's scale-up programme, Scale-up SG, will work with local firms to build new capabilities to innovate and expand into international markets. This builds on the existing work that the Infocomm Media Development Authority is doing to upskill businesses with its Industry Digital Plans for SMEs.

With significant effort put into networks and resources, Singapore has been hard at work boosting its reputation as a regional hub for private equity. The World Bank's Doing Business 2019 report, for example, ranks Singapore third in the world for its ease of starting a business.

However, while the city state impressively accounts for 56 per cent of all private equity in South-east Asia, there is much work to do.

India and China remain the closest competitors. Private equity deals in India reached US$24.4 billion in 2017, while China was the largest private equity market in the APAC region, with a record US$64 billion in deals.

What are some ways to get a larger share of the pie? Singapore has already established itself as an excellent hub for developing capital, so it is not failing there.

To become more competitive, business leaders can take more cues from entrepreneurs in the region, to encourage greater ideation and innovation.

Singapore may be missing out in some cases not due to the competitiveness of its public-private support network, but rather something more intrinsic to individual business leaders.

Some call it hunger or passion, but these are simply visible traits from leaders who have the ability to grow, adapt and perform through times of change and challenge.

While a strong support network is key for helping businesses, resilience is what is needed to build stronger, regionally competitive businesses in Singapore, and thus attract greater investment.

Resilience is especially important because uncertainty is and will be a constant in leadership roles. As such, business leaders must nurture their ability to grow, adapt and perform through times of change, challenge and diversity.

As SMEs develop in their markets, they're bound to be subjected to disruption and change which threaten them, and leaders would do well to have the grit and tenacity to tolerate uncertainty and escape unscathed.

The ongoing momentum that the budget has provided so far on private equity is welcome. However, to capitalise on growth, further initiatives should be put in place from the public and private sector, to not only build an ecosystem of entrepreneurial growth, but to foster a mindset of resilience that embraces learning from failure, rather than fearing it.

As Singapore's business leaders adopt a resilient spirit of embracing failure and use these lessons to pivot to even greater ideas, we will increase chances of being Asia's regional hub for global private equity investment.

  • The writer is director, head of YSC Singapore.