Tuesday 24 March 2015 10:02 am

Two lessons the UK can learn from economic powerhouse Singapore

I admit: the idea of the UK learning lessons from a dictatorship feels uncomfortable. But starting a business in Singapore has convinced me that despite massive differences in the size of our two countries and our political regimes, there is a lot Singapore has to teach when it comes to building a strong economy and encouraging entrepreneurship.

In the week that Singapore mourns the passing of patriarch Lee Kuan Yew, here are two that leap to mind.

1. Enable business, rather than strangle it in red tape

At 17 per cent compared to 20 per cent here in the UK, Singapore’s low rate of corporation tax has made it a magnet for foreign investment for multinationals ranging from Google to BMW to Procter & Gamble.

Singapore also offers generous tax exemptions for new companies for their first three years of operation, making it a very attractive base for start-ups particularly in the tech and internet space.

What’s more, Singapore’s policy mindset is to enable business, rather than strangle it in red tape: you can launch a business in two-and-a-half days in Singapore and the attitude of officials and professional services people is very “can do”.

The UK ranks eighth in the World Bank’s Ease of Doing Business table compared to first place for Singapore.

To close the gap a key priority must be to simplify our massively complex tax system and to reduce tax further. George Osborne’s Budget commitment to review business rates was a good start, but more needs to be done.

2. Develop every child’s potential regardless of their ability or ethnicity

Pearson recently ranked Singapore’s education system the third best in the world and it’s no coincidence that the country enjoys an unemployment rate of around 1.9 per cent compared to around 5.8 per cent in the UK.

Singapore’s educational policy aims to ensure its future workers have the skills and knowledge base to meet the changing demands of a successful economy.

As well as a strong focus on maths and science, what really impresses me is both the meritocratic nature of Singaporean education where it’s understood that hard work pays off and the approach is on developing every child’s potential regardless of their ability or ethnicity.

There is also a big emphasis on vocational education embodied by the world class Institute of Technical Education, which has dispelled the lack of kudos often attached to non-academic learning by investing in innovative programmes, attracting the best teachers and forging close links to multinationals.

As someone who left school at 16, I am pleased that here in the UK apprenticeships feature large in the manifesto pledges of the main parties.

However there is a long way to go before vocational education in this country enjoys the prestige it does in Singapore.

It's true that Singapore radically differs from the UK however this doesn’t mean we can’t learn from its principles or approach: another thing Singapore does well is to embrace best practice from abroad.

Dave, Nick, Ed – take note.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.