On a recent visit to a polytechnic, Minister for Education (Higher Education and Skills) Ong Ye Kung was shown a student's business proposal for shared taxi services.

The project, completed years before ride-hailing app Uber became popular, showed him that Singaporeans were capable of great ideas but also that ideas do not become businesses on their own.

Singapore needs to create an environment where more of such innovation can flourish, he told 2,300 senior public servants yesterday at the Public Service Conference.

"The main obstacle is ourselves - our organisation and all our entrenched processes, bureaucracy and a culture of being afraid to fail because all these years we have succeeded," said Mr Ong, the minister in charge of innovation.

In his keynote speech, Mr Ong made the case for the urgency of innovation and suggested how public servants can make enterprise happen. From Estonia and India's digital identification systems to China's e-payment systems using facial recognition, countries are reinventing themselves to stay relevant in a global economy, he noted.

This is the biggest economic challenge of Singapore's time, said Mr Ong, as he called on senior public servants to rise to the occasion.

Singapore cannot compete head-on with other countries which have the advantages of bigger markets and looser regulation, he said.

Instead, Singapore can offer impeccable coordination between its agencies to make things happen.

"Whole-of-government efforts mean every agency chipping in to make the impossible possible. It is not every agency having its own vested interest and a veto to make the possible impossible," he said.

Public servants can get in the way of innovation, by coming up with new rules to regulate activities instead of looking for ways to cut red tape and enable new activities, he noted. Common reasons given are a lack of time and resources, and unsupportive bosses, said Mr Ong, who was a senior public servant before he joined politics. But public servants must set aside the time, he said, adding that the best ideas are always born out of a desperate need.

"Don't wait for that grand plan, for your boss to tell you this is the mission... make a start, no matter how small," he said.