Promoting innovation is one half of the economic plan to revitalise the economy. The other half is productivity. Innovation and productivity are in reality closely interlinked. It is typically innovation which drives the productivity gains at the firm and industry levels. Skill levels of workers are meaningful only in so far as they can equip labour to function at and operate with the latest level of innovation in process, product or organisation.
Singapore has run out of room to compete on price. This is because of the high operating costs. We need to compete on value. Value is a derivative of more than doing things efficiently. It is about serving the customer differently. This means filling a market need in a way which satisfies customers on multiple dimensions, not just price.
Better still, being effective can mean making a new market, as Apple has done to the music industry with iTunes and iPods, or redefining the market, as adding miniature digital cameras to phones has done to the photography industry. Making that difference is innovation.
Is Singapore a place and a people that are capable of seeing and developing different ways of doing things? Let us take a look at the essential features of innovation.
First, innovation is about taking risks. These risks can create opportunities and, if the investments in innovation don't pay off, invoke crises for firms. It is not enough to be "risk-willing" to be innovative. It is necessary to be "risk-seeking". The innovator has to look for the new idea or different idea on the margins of the known. It is axiomatic that in innovation, one must accept the certainty of pain in return for the uncertainty of a reward.
Singaporeans have a reputation for being risk-averse. This may be the case for two reasons. First, we are trained to be rational. We do the maths and think that if the odds are too great, then it is best not to attempt something.
Second, we are afraid of failure. Even where Singaporeans are willing to take risks, we want a safety net or a hand to hold. The myriad government schemes to support entrepreneurship are generous but also indicative that, left in his or her natural state, the Singaporean would prefer to sail within the map of the known - take a job, earn a salary, don't rock the boat.
Happily, there is emerging evidence that the new generation of Singaporeans is willing to take the plunge. The LaunchPad @ one-north is filled to capacity with technology start-ups. We need more such initiatives and we need more Singaporeans to populate them.
However, it is essential that young people understand that innovation is dependent on but not the same as entrepreneurship. Starting a cafe or a wine bar is entrepreneurship but not innovation. Coming up with better coffee machines or wine-pairing would be. Selling fashion online is not innovative any more. Coming up with a different way to sell online could be.
Second, innovation is contingent. Being innovative and being successful are related but not synonymous. Being successful depends on getting a lot of other more mundane things right - managing costs, marketing, intellectual property protection and recruiting the best people. It is also dependent on timing.
The lesson here is that the innovators, whether we are thinking in terms of owners and managers or firms, have to have a broad set of business competencies and not just geekiness. Singaporeans tend to take specialisation of learning too seriously. To be successful, innovators have to know something about a lot of things even while knowing a lot about a few things.
Third, being innovative requires ambition. It is possible to make a distinction between marginal and game-changing innovation. Piling on marginal innovations does not add up to a game-changer. Yet, both can generate competitive advantage. Those from the former tend not to be as great or as long lasting as those from the latter. The innovators have to be ambitious about their goals.
Are Singaporeans ambitious enough to take on the most difficult problems? The answer to that question is knowable only when we see the outcomes.
It is conceivable that even if we see a rise in the willingness to innovate, our achievements are capped by the modesty of our ambitions. Hence, we become a "tail-coat" centre for innovation, in that we ride on major breakthroughs realised elsewhere and by others, rather than be "coat-making", in that we produce first-order innovation locally.
One challenge is our small population size, which may hinder us from achieving critical mass. But another small country, Israel, has established a thriving concentration of innovation. We can and should overcome population limitations through targeted augmentation of immigration policies.
A second challenge is the small size of our domestic market. This can be overcome if our innovators think from the start in terms of the international market. Spring Seeds Capital is doing good work to help start-ups accelerate and commercialise their innovations. But we can benefit from a richer and deeper pool of financing for innovation.
This means bringing the mainstream banks into the story. Hitherto, other than the Government, innovators have relied either on their own limited resources or on a small pool of angel investors and venture capitalists. Mainstream banks have been reluctant to load capital to back innovation. They should rethink their views and develop the capabilities to assess innovation risk in the same way that they have risk proficiency for capital market and infrastructure project financing.
For our innovation landscape to have high peaks and not just small hills, our risk takers need financial backing.
Third, innovation is hard. It requires making front-loaded investments, a high tolerance for failure over multiple attempts and the persistence and patience to see things through.
Are Singaporeans willing to focus on the longer term? Can we delay gratification? Can we take hard knocks and get up each time?
An unintended consequence of a tight labour market is that salaried jobs for our best educated are easy to secure. The chase for paper qualifications translates to more years spent in education.
It is eminently sensible for those who have worked hard in school to want to get economic returns. Innovators are capable, not lucky, people. They would have career options. Initiating a start- up, joining a research team and pushing for innovation within a company's stable product or process line require a willingness to take the harder and more uncertain road.
Fourth, innovation is about motive. To take that harder road, the motivation for innovators cannot be merely coldly material. It should be hotly emotive commitments to excellence, to want to do something special, to a need to make things better and to delight in discovery.
Are Singaporeans too transactional and too materialistic? Do we have too tight a relationship between cause and effect - I work, so pay me?
Innovation, particularly of the game-changing sort, is powered more by a colourful character than coloured credit cards.
We need to ensure diversity in our population and multiple but not competing pathways to learning, and to cultivate a positive attitude towards adventure in our young. But the state and its teachers can only do so much.
Parents who relentlessly stress the need for good jobs and incomes - especially where "good" is a moving target - are well-meaning but perhaps guilty of narrowing the minds of their children to a tight geometry of meaning between the dots of cause and effect.
But being innovative, as former Apple chief executive Steve Jobs commented, means accepting that "you cannot connect the dots forward".
We should stop fussing about getting everything right and in the right sequence and focus more on what is right for each of our children and let their interests and passions drive the sequence of learning.
Finally, innovation is culture. The Hollywood fairy tale of lonely geniuses beavering towards eureka moments has coloured the reality that innovation is about collectives.
Innovation goes nowhere without people working in teams to support the final goal. It cannot survive in firms unless the management and workforce embrace, welcome and nurture it.
Innovation is about collaboration as much as it is about competition. Are Singaporeans team players? Are we trained to be so competitive that we think about collaboration as weakness?
Academic achievement tends to be an individual pursuit, or at least measured in terms of individual performance. Those who do well in our system may think that they are special and their achievements are all self-earned. They forget the parents, teachers, schoolmates and others who supported them.
One of the best arenas to learn the importance of collaboration is in sports. The success of our athletes in the recent SEA Games, especially in team sports, is inspiring. Teamwork, as with so many of life's most important lessons, can be read in a book but is best learnt by doing.
Complementing individual academic endeavours with collective project work or team sports is a useful way to encourage young Singaporeans to value collaboration while staying competitive.
I have only touched lightly on the need for more government support. Government support is not a substitute for any of these crucial requirements for successful innovation.
To succeed at being an "Innovative Singapore", we need to first innovate Singapore - our ambitions, our motives and our value systems. That is not the work of ministries alone, but more so of families, communities and ourselves. Charity is not the only virtue that should begin at home.
The writer is the Chief Executive Officer of the Future-Moves Group, an international strategic consultancy and executive education provider based in Singapore.