x Abu Dhabi, UAEFriday 21 July 2017

Sustainability lessons to be learnt from Singapore's economic rise

Singapore's defiance of conventional wisdom that growth is accompanied by deterioration in the environment extends past the economic justification.

Singapore last year ranked first in the World Bank's Ease of Doing Business Report. Above, a view of the city's central business district. Edgar Su / Reuters
Singapore last year ranked first in the World Bank's Ease of Doing Business Report. Above, a view of the city's central business district. Edgar Su / Reuters

In just half a century, Singapore has transformed itself from a small port-city to a global financial centre, hailed as a bastion of urban livability, environmental sustainability and economic efficiency.

Last year, it ranked first in the World Bank's Ease of Doing Business Report, fifth in Transparency International's index of least corrupt nations and number three in Insead's Global Innovation Index.

But the city's defiance of conventional wisdom that growth is accompanied by deterioration in the environment extends past the economic justification. As its population has grown, so has its green cover. Contrary to popular belief, the physical environment has been the unsung hero of economic sustainability, according to new research at Insead, which opened its Asia campus in Singapore in 2000.

"You cannot attract highly educated people and become a knowledge centre if you have a lousy environment," said Luk Van Wassenhove, the Henry Ford Chair in manufacturing and the academic director of the Insead humanitarian research group.

"Singapore had the foresight to realise very early that they didn't have resources. They didn't have water, they didn't have energy," he said. "So they were forced from the start to include sustainability in their thinking. They understood that economic sustainability for them was tightly linked to environmental sustainability and now in the future social sustainability."

While Singapore can arguably bask in its glory, it can by no means rest, as it now grapples with challenges similar to those of other developed and developing cities.

The residents of today's rapidly globalising urban centres have a different outlook from that of their parents. They don't necessarily see the environment improve on a daily basis, and at times it may seem to get worse, Mr Van Wassenhove said. "There can be a lot of noise, a lot of construction, a lot of traffic jams, you name it. These populations have challenges the previous generation didn't have. And they want to have more of a say in how the city or the state is being run."

"You combine that with advancements in technology and new media and you can see how that can lead to social unrest, even in Singapore," he added.

It is a phenomenon affecting many bigger countries with increasing urban populations. They are expecting not only to be heard but also to be catered for.

"You think about the middle class in China, the middle class in India and you think about their consumption power. It is explosive," said Mr Van Wassenhove. "It's good that these people get out of poverty but the constraints they're going to put on resources are just enormous. Sustainability is no longer a luxury; it is something that business will have to deal with because it's going to become an important element of their licence to operate."

Administrations around the world - some of which lacked the political will and unity to act previously - are starting to move towards sustainability, both in infrastructure and environment.

Mumbai built the "Sealink" bridge to divert traffic away from the gridlock of the city and along its coast - again, after much delay and dispute.

These ad hoc, reactive measures are themselves not sustainable, said Mr Van Wassenhove. "There's still the issue to develop a longer-term plan rather than chaotic management of cities. There may still be the issue of resources, where are the resources going to come from? Maybe companies can help by helping to create business which would generate economic resources."

This was reflected by Mohandas Pai, the chairman of Manipal Global Education Services. "If you go to China you see beautiful infrastructure, you see everything that works and you come to India, you see India as it is; naked. Good infrastructure, bad infrastructure, poverty on the streets," he said. "But when you meet the Indian corporate sector, when you meet the Indian business people, when you meet the entrepreneurs, you are shocked by their quality, their ability to create strategy, their ability to execute and their ability to bring scale.".

"There's certainly a role for business to be played here," said Mr Van Wassenhove, noting the need for cities and business to work together in areas such as supply-chain management.

"Companies can come up with intelligent solutions to many challenges, assuming city government is willing to collaborate with them. Modern technology can also play a part. It allows us to do things today that couldn't be done 10 years ago," he added.

"It's in the long-term interests of companies to work with administrations, governments, NGOs and social entrepreneurs to help cities and countries develop. Working in cooperation, huge improvements are possible."

This collaborative spirit can also be adopted in the public sector. As Singapore demonstrates, interdepartmental cooperation is one of the reasons starting a business in the country is so easy.

The country's zero tolerance for corruption also adds to the public sector's efficiencies.

"The challenges we are looking at are very much cross-disciplinary. You have to have people who understand the different issues," Mr Van Wassenhove said. "Another thing Singapore has been smart about is ensuring some of the best-paid jobs and some of the smartest people are in the public sector."

Key to addressing challenges relating to sustainability and social harmony is control over land ownership.

With its centralised government Singapore was able to rearrange the land and make decisions on what to develop and where.

But central management does not apply everywhere.

"You have to think about perhaps giving cities more autonomy. Somehow you have to think about the long-term issues that should be taken out of short-term politics," Mr Van Wassenhove said. "I also believe that it is important for cities or city governments to listen much better to their people that live in cities and modern technology has allowed that."

 

Republished courtesy of Insead Knowledge (knowledge.insead.edu). Copyright Insead 2012