Even as Singapore makes a push to modernise its economy, the country's fear of failure - which locals might recognise as the "kiasu" mindset - may be holding it back, a new study has found.
The Economist Intelligence Unit's Connecting Commerce report, which was released yesterday, placed Singapore 14th out of 45 cities in terms of how confident businesses are that the city's environment supports a digital transformation.
The study, which was commissioned by Australian telco Telstra, looked at five indicators: innovation and entrepreneurship, financial environment, people and skills, development of new technologies, and information and communications technology infrastructure.
Bangalore in India was ranked first in the report, ahead of San Francisco in the United States, with six other Asian cities in the top 10. Among South-east Asian cities, the highest ranked were Manila at sixth, and Jakarta at eighth.
Singapore fared most poorly in innovation and entrepreneurship, where it ranked 21st, and in people and skills, where it ranked 18th.
Mr David Burns, Telstra's group managing director of international and global services, said this is largely because innovation often involves being willing to fail repeatedly before achieving success.
Speaking yesterday at a panel discussion organised by Telstra, he said: "In corporate society in Singapore, failure is not in the dictionary, whereas that innovative environment works on trying things and seeing what works".
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Mr Markus Gnirck, founder of home-grown start-up Tryb, agreed. He said: "There hasn't been enough learning or learning through failure, but conversation about it is finally happening."
And with thousands of tech start-ups making their home in Singapore, talent is needed. To keep up with their needs, universities and companies have to work together, the panellists said.
Big data analytics skills were most in demand for firms in Singapore seeking digital transformation, with 38 per cent citing these as their biggest requirement. Digital security came second, at 32 per cent.
The study polled 2,620 senior executives and at least 28 business leaders in 45 cities.
As for the role of government, 53 per cent of executives said Singapore's government programmes were the main source of financial assistance in digital transformation.
A further 43 per cent found these programmes and events to be the most helpful local resource.
Regarding the shortage of people and skills, Mr Khoong Chan Meng, director and chief executive of the Institute of Systems Science at the National University Singapore, called it a "happy problem".
He said: "If Singapore had just a few start-ups, we wouldn't be talking about this. There are 50,000 start-ups in Singapore and 10 per cent are tech start-ups. The demand means the local pool will almost never be sufficient."
Mr Khoong said executives eager to embrace the digital transformation find themselves in a "Catch-22" situation. They see technological innovation as a means of growing their businesses or advancing their careers, but are wary that pursuing innovation could also lead to failure.
He said: "People in Singapore aren't satisfied with what they have and want to achieve more, but they have the constraints of being less confident in this different agenda - digital transformation. This in-between situation will persist as long as they look for more growth."