A Great Simian or just a Monkey

Month: September 2014

Is todays education killing creativity

Today we are educated out of creativity. Our school system need to take care and spark creativity, not kill it!

For a long while I have been fascinated by education as well as how to cater creativity in the best way. Education is such a great thing we have almost all over the world, and in the parts where education is not available for everyone, we all struggle to make it available so every child on this earth could get an education.

Creativity on the other hand is something considered positive before school, pushed away during the time in the school system and then creativity is sincerely missed when entering the work life that will last for about 40 years.

The question I have been thinking about a lot lately is the following:

Almost every education in the world follow the same path and almost everyone uses the same method of teaching (small variations). Is the way we do it really the best way? Is math, literacy etc really the most important things today, because there is a clear hierarchy in education and math, literacy etc is on top of that list, but where is creativity?

To be honest I hated school. The first school I ever even considered liking was the first part of Military Academy, the part that was focused on leading special forces units at war. I loved it, the second part of Military Academy was way more focused on theory and again I lost interest. I even forced the academy management to insert an exercise where we as cadets again put on our harness, backpack and weapon for a short but intense 24h exercise. The operation was called “The Horse” and was a big failure, mainly due to the fact that I as a young cadet left all alone without any guidance to facilitate and plan an exercise for app 200 military cadets. I was at least creative. Now back to the subject….

How many creative souls do we loose during the school years?
Creativity is as important as literacy and we should treat it with the same status.

If kids do not know the solution to a problem, the will at least give it a creative go to solve the problem, take a chance. Adult are afraid of doing wrong, kids are not. That is a big difference that really puts the finger on how school and we as adults kill creativity. We should instead focus on keeping that creativity alive.

We don’t grow into creativity, we grow out if it

Or put in other words, we are educated out of it.

Thera are more backlashes of this type of school-system. Highly talented creative individuals are treated as “different”. Their specific creative spark (dancing, art and other creative categories) is considered weird and actions are taken to “make them normal”. That is pure talent destruction. Some will fight back and if you think of it we all know who they are when you look back at your school years? You see them on TV, read about them in the papers, but then you have all of those who’s creativity was killed…….and now they are constantly struggling to get it back.

Sweden vs Singapore if starting or running a company

Singapore is heaven for companies whilst the Swedish welfare system is broken, but Sweden hangs in there for other reasons and has also changed in the right direction during the last years.

After one year learning about the Singaporean regulations, taxes and general business environment for companies here, I thought it was time to share some key findings in regards to the difference between running a business in Sweden compared to Singapore.

I run companies in both countries.

Sweden is still competitive if no employees, if it is more like a holding company, and you can rely on dividend not salary. Sweden has great business ethics and a healthy yet productive work life balance. 

Singapore is run like a company and the support the government gives to companies is extensive. Singapore is build to create a great environment for companies and has truly succeeded with the task.

This post only brings up the different taxes and fees and how those compare. I have another post in the making about the startup and VC climate here in Singapore, so I will leave that part out in this post. No soft skills are brought up in this post.

1. Starting a company

I would say it is about the same. Sweden has a bit more user friendly way of doing it online, but in general I would say the cost and the administration is extremely good in both countries. Well done both Sweden and Singapore.

2. Employing people

Singapore: This topic depends a bit if you employ a Singapore Citizen / Permanent Resident or an expat.

  • Citizen or PR: You have to pay CPF (Central Provident Fund. CPF is like a pension fund that everyone has. There are other stuff included as well. Just head over to CPF (the design is beyond awful btw) to find out the details. The economics is both straight forward and complicated. Straight forward in the way it is calculated and complicated in the way that it is two parts, one part that is payed by the employer (currently you as an employer pay maximum of S$800) and a part that is payed by the employee, but this part is deposited by the employer and then deducted from the salary before payed. The most complex thing with this process is that you cannot pay CPF online from your business bank account, this since the Singaporean banks do not allow eNets (e.g VISA or MasterCard) transactions on Business Cards, but has to be done by autogiro or cheque (how is that for old-school).
  • Expats: The process of getting a Visa for an expat is pretty straight forward and easy process, all done online. The online systems are not perfect, one fun thing is that the online systems are closed outside of office hours, so when you most of the time actually have that hour over to apply for an employee, the system is closed. When in Singapore you tend to get upset with the amount of time and effort it takes to get an Employment Pass for an employee. It is a wast amount of documentation and rules that apply, also the government have recently tightened the rules a bit. Yes, it is cumbersome, but if we look at the hole picture it is actually really generous and great system. If compared to Sweden this process is like a breeze. It is fair, straight forward and honest. Singapore still lacks some competence in certain areas, many of those areas are expertise that Swedes and many other western countries have, so most of the time the process is very straight forward. Minestry Of Manpower even got a self assessment tool if you want to try if you would get an EP in Singapore. You do not pay any CPF for expats.

In summary, the maximum CPF you pay as an employer is around 16% (a S$5000 salary gives a S$800 CPF contribution), but in most cases well below 5%.

Sweden: Well, this is a beast. In Sweden there are two different taxes / fees that has heavy impact on the financials for a company, employer fee and social benefits. Those combined adds up to 38-46% extra that you have to pay on top of ordinary salary to the employees. This has a huge impact on small companies.

Conclusion: The CPF system is not perfect (inherited from Switzerland if I am not mistaken), but it is fair to both employer and employee. I cannot say the same for the Swedish system. There are some significant advantages with Sweden here also. The safety for an employee is great in Sweden, whilst in Singapore it is almost zero, on the other hand the un-employmentrate is also almost zero.

3. Income tax

Well, don’t know how to put it, but it is expensive to run your own company in Sweden if you also are employed in the company. It is actually a really shitty situation in many ways. Singapore is a really good country for this.

Sweden: Between 31-56%
Singapore: Between 7-20%

Conclusion: If you look in your wallet when you are paid your salary, you will not want to be in Sweden, you will want to be in Singapore.

4. Company tax

This is actually the subject where Sweden as well as Singapore are in pair on being globally competitive in a good way.

Sweden: 22%
Singapore: 17%

Even if it is not such a big difference there is a big difference in attitude. Singapore have tons of tax exemptions for young companies. Some you don’t even have to apply for, but are just there by default, such as the one that makes the first three years kind of good from a tax perspective since IRAS heavy subsidised tax on the first S$300.000. For the first thee years it will be an average of 5.67%.

Conclusion: You can easily get the impression that the Swedish tax system for companies are there to punish rather then help small companies. Whilst the Singaporean system more have the approach “If we make it easy for a company to survive the first 3 years, there is a higher chance of you succeeding and by that pay the government more taxes long term”. Sweden have a bit further to go before we can call it startup-friendly. The system is in many ways built for large companies like IKEA, H&M, Ericsson, SKF, Electrolux, Volvo, Atlas Copco, Boliden, Husqvarna, Saab (not the cars), since we have a few of those big ones, actually Stockholm is ranked #16 in the world when it comes to cities with amount of large companies.

5. Capital Gains Tax

Hands down a victory to Singapore. Hard to compete with the amount of 0% in tax on capital gains.

Sweden: 20-30% (the large portion would be in the range of 30%).
Singapore: 0%

Conclusion: Well, go figure.

6. It gets really interesting when putting the numbers together in an example

I will make two simple examples. The first is on an operational level och the second is on a dividend level.

Operational example: If you are two people in a company and you send an invoice to a customer for the amount of 100.000 (currency irrelevant). Lets assume you will take all of that in salary divided between the two of you.

In Singapore you would get approximately 43.000 each.
In Sweden you would get approximately 12.500 each.

Dividend example: Your profit before tax for the last year is 1M. How much will you as an owner get in your hand?

Singapore: 830.000
Sweden: ca 600.000

To summarise this topic I would say that if you run a company without employees and can pay yourself dividend every year and just a minimum salary there is not a huge difference (still big), but as soon as employees come into the picture (as employee yourself or if you hire people) the equation gets really good for Singapore and really bad for Sweden.

7. Don’t you get more in Sweden since you have the high taxes, how about the Sweden welfare?

The Swedish welfare system is a hoax, it does not exist anymore. The Swedish welfare system is build upon the notion that we have free and great healthcare, education, pension and infrastructure etc. It is not hard to find relevant arguments that the Swedish welfare system is broken, especially when we look at what we pay for it. Singapore has great healthcare, education and infrastructure. they even have a military defence that is actually up and running and can do stuff in less the 5 years if something would happen that might require a military defence.

To be clear, Sweden has healthcare, education, infrastructure etc, but most people have an additional healthcare insurance to avoid the waiting time etc (exactly as in Singapore), payed by the employer or privately. The healthcare is also ranked amongst the lowest in EU. The education has decreased tremendously in the last 20 years and is according to PISA, Sweden is at the lower end. Infrastructure….well, nowadays we have road tolls on roads and a railway that is not working properly. We do have great internet though.

Yes, I know that Singapore is unique in many ways, but still, so could Sweden be, at least when you consider what we pay in tax!

8. Conclusion

From a business perspective there is not even a competition. Singapore wins on all levels. From a personal perspective there are other angles to consider. Singapore is a survival of the fittest country and Sweden has a really great balance of living standard and work ethics etc. That is a personal question to consider.

I must add that I am no tax or law expert in anyway. All example are based on simple calculations and all the small stuff is left out to keep it simple and straight forward.

Sweden and Singapore are competitive countries

World Economic Forum today released The Global Competitiveness Report 2014-2015. The report is as always a joy to read for a Swede living in Singapore. Two fantastic countries when it comes to innovation and competitiveness.

About Sweden the report have the following text in their excerpt:

10. Sweden, despite a rather stable competitiveness profile across all areas, falls four places this year. Overall the country boasts important strengths across the board, with strong institutions, excellent infrastructure and healthy macroeconomic conditions. Perhaps more importantly, Sweden has managed to create the right set of conditions for innovation and scores very high in many of the dimensions that are key to creating a knowledge-based society.

About Singapore the report says the following:

2. Singapore ranks second overall for the fourth consecutive year, owing to an outstanding and stable performance across all the dimensions of the Global Competitiveness Index. Again this year, Singapore is the only economy to feature in the top three in seven of the pillars; it also appears in the top 10 of two other pillars.

World Economic Forum have two great articles with a lot of data and links for the nerd, so I thought I would just share two photos that kind of highlights how Sweden and Singapore are holding up, pretty good I would say.

sweden-global competitiveness

most big companies per city

One year in Singapore

So, one month ago I passed the one year mark living in Singapore. I wrote a few posts when we arrived here. A lot of water has passed under the bridge since.

Most of my initial impressions are still valid, the school system in the international schools are fantastic.

It is clean, maybe too clean sometimes, I also get the impression that the cleanness is dependent on how  many cleaners there are and not at all connected to the cleanness of the people in Singapore.

It is safe. Damn safe to be honest. As a father with an 8 year old daughter, I could not possible feel safer.

Is it a democracy? Well, this is one of those questions that are really hard to answer, do google or check Wikipedia for the academic answer, from a person who just moved here 13 months ago, this country is run like a machine or like a large corporation. If things are broken, they are fixed, if things are needed to grow the country in the future, let’s focus on those markets that will make it possible, in comparison with most other countries I have gained some insight into the governmental structure and the people working there, I must say that they intellectual level on the people working in many government agencies are just amazing. It is actually a very attractive career path for many.

Most things simply work.

As a Swede I am extremely impressed with the tax system. As a citizen of Singapore it is not much that differs in what you get for your tax money, but the taxes in them selves differ tremendously.

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