Here are some of the things you hear about Singapore from the sensitive flowers in the West:
"Singapore? Never been there. I hear the government controls everything"
"Singapore... they still hang people don't they? Doesn't that stunt the development of society?"
"Apparently you can't chew gum in Singapore. How are you meant to be creative?"
"Singapore is too authoritarian... startups will struggle to take off"
Wrong. No government in the world cultivates and nourishes its startup ecosystem better than Singapore (except Israel).
Singapore may be tiny, but just like Israel, it houses a disproportionate number of successful startups. In fact, Israel has the most startups in the world per capita. The chart below suggests that it also attracts the most venture capital investment relative to the country's level of wealth. Singapore does pretty well too.
Indeed, Singapore has been so impressive at fostering its startup ecosystem that it should be the prime policy model for all countries trying to achieve the same. The Valley, in all its glory, resulted from an extremely rare amalgamation of over 50 years of technical advancement, venture funding, ridiculous talent, and a fat dose of luck. It is a once-in-a-lifetime happenstance. Most government initiatives that attempted to recreate the Valley - such as the Science City in Tsukuba - fail terribly.
Singapore is different. It is sufficiently astute to understand that entrepreneurship follows money; that you need someone to write those small cheques in the early days. To kickstart the startups, you have to take a gamble on the venture capital industry.
Following in the footsteps of Israel's Yozma Programme, Singapore's policies aim at catalysing startup formation with grants, before pushing the entrepreneurs to validate their concept/thesis by securing investment from an external investor. For example, the government could co-invest alongside other investors at a 4-to-1 ratio: if the investor puts in $100k, the government would invest $400k. The investors are allowed to buy out the government's share at any time, allowing them to more effectively leverage their initial capital investment.
To my knowledge there is no other government in the world that provides such a complete end-to-end funding solution for its startups and VCs. I'm waiting with bated breath to see if Singapore manages to build a Silicon Island...