GLOBAL developments make it unlikely that Singapore's past growth model can be continued, let alone be successful, going forward, says Dr Linda Lim.

It is becoming increasingly risky and expensive for the state to try to pick winners, target particular industries with tax breaks and subsidies and woo MNCs here to drive key sectors.

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'You can't have everything, even if you're not small and resource-constrained. Comparative advantage in one sector means comparative disadvantage in another. Trying to do everything will only push up resource costs and make you uncompetitive overall.'

There is no way, she says, Singapore can be a Jack of all hubs - from semiconductors, life sciences, health care, education, financial services, digital media and creative industries to casino tourism. By trying to do it all, it risks becoming a master of none.

'If we try, all sectors will face rising costs as they compete with each other for scarce land and talent. And negative externalities such as inflation, congestion and environmental degradation will balloon,' she warns.

Singapore's recent economic growth model, she charges, has both tried to 'do too much, and achieved too little' in delivering returns for Singaporeans, relative to foreign firms and foreigners.

Only a 41 per cent share of Singapore's gross domestic product (GDP) goes to wages and salaries here, which is one of the lowest such shares in the world, as is the similarly low share of aggregate consumption in GDP.

Meanwhile, more than a 50 per cent share of GDP goes to corporate profits, interest and dividends, which is one of the world's highest. At the same time, the foreign share of domestic production and income has also increased, to around 40 per cent, she notes.

Externally too, says Dr Lim, Singapore's MNC-led, manufacturing export-intensive model is hobbled by challenges, not least its high-cost structure. Worldwide, there is also less tolerance for government industrial targeting policies, which 'unlevel the playing field', she says, pointing to controversies over automobile policies in countries such as the United States, France, Italy and Brazil.

The World Trade Organisation and other international trade agreements are also starting to clamp down on Asian 'mercantilist' policies, including export and capital subsidies.

There is also the emergence of new competitors with larger home markets and talent bases, particularly China and India in pharmaceuticals and electronics; Vietnam, Cambodia and the Philippines in casino and other tourism; Malaysia, the Philippines and Thailand in medical tourism; Malaysia and the Philippines in education.

The way forward for Singapore, she says, is to allow the market to 'diversify on its own', with resource allocation done by market forces and entrepreneurs, instead of the state and bureaucrats.

'Do we devote our carefully husbanded national savings, accumulated over generations, to letting the state make big bets on a few major, capital-intensive, risky and expensive projects?

'Or do we privatise the economy, releasing capital and talent to local entrepreneurs to create value in smaller but nimbler enterprises? At least, if they fail, it will take only small parts, rather than big chunks, of the economy down with them.

'It's much better to send out 100 motorboats, rather than one huge aircraft carrier, into the unknown. I would bet on at least some of the motorboats making it, instead of the aircraft carrier, a sitting duck, which could get blown up.'

This article was first published in The Straits Times.