Competitiveness, technology and immigration in Singapore

A few thoughts about the way Singapore, and conversation by tech, digital and social players, are turning bitter these last months. Disclosure first if needed : I’m now living and working here, and hopefully have secured my visa even as a foreigner (-1) qualified individual (+1) working (-1) in a start-up (+1, but for how long ?). If the present time saying wants that “it’s complicated with” having a job in Singapore for foreigner nowadays, there’s a little more to dig behind and to try explain the situation.

I’ve had many opportunities to talk with French and other foreign founders and workers here in the tech industry, listening to talks and chats in the start-up ecosystem, and I have a close Singaporean friend who explained me a few things as how he sees immigration and the differences felt after a decade of crazy growth and openness in Singapore.

Visa policy is tightening, but does it make sense ?

Yes and no. Yes, because the country is enduring a declining growth, from 4% to 2% a year. This economic slowdown is probably a good reason for authorities to put a halt to open immigration, even for skilled people : would you invite a foreigner to eat at your table when you see the food in your fridge decreasing ?

No, because unemployment is staying very low (around 2%, which is for many economists an incompressible rate due to an average number of people changing situations at a given time). Consequence ? Inflation, notably on salaries, goes up. Why ? The main tool for Singapore to mean it’s not as welcoming as before is to ask for visa applicant to get a higher salary from their would-be employers. An obvious (but biased) example is on the PEP, a visa for high-level executives, which now demands to have earned 144 000$ a year, from 34 000$ until then.

For young and innovative companies, the ones that create jobs and make 50% of the GDP and 70% of the workforce on the island according to Minister of Trade and Industry Teo Ser Luck, it means growing hardships to recruit talents. Working from Blk71, the heart of the start-up ecosystem here, it sounds like “We can’t recruit technical profiles anymore”.

The sound of silence for office space and LinkedIn invites

Another sign of this gloomy atmosphere on a micro level, now. A friend of mine is managing both his mobile app company and two offices spaces he sublets to entrepreneurs and start-ups. Meeting with him recently, I found him in a lousy mood, as half of the guys he subleted his office space couldn’t afford it anymore (Singapore is still a very cautious business culture, and start-ups have difficulty getting the “last mile” of their funding), and let him with about 8 empty seats, each around 600$/month.

On the other hand, he has less calls from entrepreneurs and freelancers willing to find a place (probably because less visas are given, the price being average on the market), about 1 every two weeks compared to 1 per week before. His LinkedIn “flood”, if not always qualitative, has also decreased. His plan is to try develop an app for himself to showcase its skills, and prey for startuppers to get funding and looking for office space soon.

Growth on steroids : beware the backlash

To match this atmosphere of tech people complaining about visa policy, long lasting negotiations for funding and necessity to hire technical or marketing skills outside Singapore, I talked a lot with an good friend of mine, Singaporean for three generations, living in Potong Pasir.

As he explained to me, there’s different types of immigrants, and even if unemployment is low, he feels less “at home” than before. He talked to me of the Chinese immigrants being “everywhere”, “not speaking English”, when he, from Indian descent, is now unable to talk with some of the local restaurant staff, mall salesman, or bus drivers. Yes, it seems a little funny for us when hearing of the SMRT Chinese drivers strike, but there’s definitely something about it. I’m lost half the time on the bus as I can’t speak with the driver, it’s nobody’s “fault”, but I can understand how one can feel.

You could tell the same of others groups, we French in Singapore for instance are the fastest growing French community outside France, and every week or so a new French bar or food outlet is opening. Nice for me, but this is also a factor of price rises, be it only in real estate…

An opportunity for other South-East Asian countries ? Most likely

To conclude this post (which titles comes from Shakespeare, not from what I think of Singapore, just to be sure…), I’d like to quote an American investor here in Singapore on his recent trip to Thailand for a startup event :

“There are lot more foreigners building companies in Bangkok than any other city in Southeast Asia (aside from Singapore). I worry about the plight of Singapore the more I speak to them. [EXPLETIVE, DOUBLE EXPLETIVE]. The high cost of living and operational cost in Singapore (not forgetting the talent crunch with unreliable immigration policy for new hires) is no laughing matter. Great entrepreneurs are not fully sold on Singapore as before, there are moving parts that irks them. When you bootstrap and just want to get things done, Singapore is not the place on the top of your mind. Not until later. Maybe. Maybe not.

Local serial entrepreneurs are starting funds and programs to teach and give back. It is interesting to see Thailand’s version of IdeaLab, Science, Betaworks like Ardent Capital and lean programs like Disrupt University. Wherein Singapore does not have either yet, except maybe FI, or JFDI.”

More, if you want to keep your brain “on” on this issue : Singapore government is in need to make its population grow, and it won’t be able to do it with Singaporean only who don’t make enough babies. Immigration ? You see where and what the problem can be.

Your turn to speak, guys 🙂

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More on the same topic :

– great stats on immigration and residents in Singapore since 1950

– an AFP piece on visa & immigration in Singapore

Martin Pasquier