ThinkingNectar

It just seems that Singapore is getting more and more pro-business. Looking at the latest news Changes planned to allow 18 years old to go into business, it seems that we are going to get younger and younger business owners.

Plans have been laid out to make it easier for young entrepreneurs to go into business.

The Finance Ministry is proposing a delinking of the age of majority from the age of contractual capacity, reducing the age from 21 years to 18 years.

The move is the result of feedback received by the Pro-Enterprise Panel that legal barriers that prevent young people from starting and conducting a business should be removed.

The change will, however, require the amendment of a host of other laws, and the Civil Law Act which the Finance and Law ministries have drafted amendments to.

The proposed policy is still under consultation and I believe it is a positive step forward for the local start-up ecosystem. It gives younger people the legal space to start a business. Most importantly, it signals to young adults that they can strike out early. Of course it should do the economy some good with younger people striking out early and enaging the different type of legal, accounting and logistics services that comes with starting a new business.

On a pragmatic note, younger people have lesser opportunity cost as compared to new graduates or undergraduates. Their perceived earning power is lower (at age 18 to 21) and hence, will have a lower perceived opportunity cost also.

From the government point of view, it gives good signs to people that it is changing its legal framework to help younger people to start a business. Starting out a business is surely one of the most enriching experience anyone can have. The learning experience, together with the must do mentality will be very useful in life. Not to mention the appreciate of money, hard work and human relationship that is part and parcel of starting a business.

Beyond the rosy portion, lowering the starting age to 18 could have several issue. One of which is National Service. Young able bodied Singapore man have to undergo National Service. And from what I understand, those on Reservist can be deferred if they start a business within 6 months of their Reservist duties. So looking at National Service at age of 18, what will the direction be when 2 different priorities of the national comes into contention?

Should protecting the national comes before building a better future for oneself? Artistic, talented and scholarly young adults can get deferment for studies. And when it comes to business, the window of opportunity for success could be even more passing.

Picture a scenario should a capable (if not fortunate) young man managed to secure a deal that requires his business and services overseas. And he is to be called up for National Service. How would such a scenario resolve? Question here is where will the line be drawn between the young business owners and their National Service obligation?

Also, starting a business at young age will surely require certain form of capital. And if deferment is allowed because of any enterprising initiative by some young men, what guidelines are put in place so that no one abuse the system?

Moving beyond National Service. The idea of having business experience replacing university activities in students resume gotten my imagination. So if more students in the local campus run companies and conduct business instead of spending their effort in university activities, who benefit?  The students will benefit from more impressive resumes, and the economy benefit from paid transaction and effort. Student run university activities does not pay students for their time and effort while business based efforts does.