Preparing for the future and acting to shape it

As we highlighted in our book on Innovating Justice, our global network of innovators has taught us: to be a successful innovator you must know your market. You must see the needs out there and be able to make an offer you can’t refuse to meet those needs. Getting the innovation off the ground takes hard work and sound management. And leadership is key.

Last month, Sam Muller and Laura Kistemaker met with Singapore’s Minister for Foreign Affairs and Minister of Law H.E. Mr. K. Shanmugam to discuss a foresight study HiiL is conducting for the Ministry of Law. During the meeting, Minister Shanmugam shared powerful lessons on how to innovate. Under his leadership, Singapore is developing into Asia’s dispute settlement hub.

Lesson one was about looking ahead. “We cannot know the future. There are many unknown unknowns. For those you cannot prepare. What you can do is make sure you identify broad trends and have well-educated and trained people who can deal adequately with these unknowns when they present themselves.”

Lesson two was about knowing your market. The rise of China and India, as well as the development of closer ASEAN cooperation presented an opportunity that played to a Singapore strength. “I want Singapore to be the New York of ASEAN – to become the legal services and dispute resolution hub of ASEAN and Asia. Businesses who invest in China or India should want to manage all their legal matters in Singapore.”

This was then translated into a very clear value proposition – one that is hard to refuse. “We have a highly developed and very efficient legal system: courts, arbitration, mediation, and law firms. We are a safe haven for your assets and investments.”

Lesson four was about making it practical, and the hard work that comes with that. “The creation of the Singapore International Arbitration Centre (SIAC) is a good case study of our approach. We saw an opportunity for the legal services sector, given the rise of India, China and the rest of Asia. We brought in the best expertise from around the world for the SIAC Board. We then set a number of clear goals in terms of where we wanted to end up. We changed the legal framework to make sure we would be most attractive: full party autonomy, no interference from the courts, tax breaks, etc. Then we conducted a concerted marketing campaign in which we spread the word of the attractiveness of Singapore as an arbitration hub. My senior officials and I visited several countries for this.”

It has paid off: Singapore is now an internationally recognized centre for arbitration. The growth has been tremendous and continues. Some figures: 86% of new cases filed with the Singapore Arbitration Centre in 2013 were international in nature; new case filings increased in 2013 by 10% to 259 new cases, making it one of the fastest growing arbitration centres (SIAC Annual Report 2013).

While the dispute resolution hub is being developed, Minister Shanmugam is already thinking ahead. Two questions on his mind: the measure to which the different types of professional services are being pushed by economic forces to converge: law firms, accountants, banks, and management consultants. Is this a threat or an opportunity? And China: what is the emergence of China going to do to the legal landscape of South East Asia and beyond? How should Singapore prepare for that?

In a fascinating new book that has just been published, What Should We Be Worried About?, John Naughton expresses his big worry: “we are increasingly enmeshed in incompetent systems – that is, systems that exhibit pathological behavior but can’t fix themselves (…) because solving the problem would require coordinated action by significant components of the system, but engaging in such action is not in the short-term interest of any individual component (…). So in the end, pathological system behavior continues until catastrophe ensues.”

Legal systems – or parts thereof – can be a bit like that: incompetent and unable to change. Minister Shanmugam shows that it does not have to be that way. As part of a constant effort to understand the environment around it (a small city-state has little room for complacency) Singapore saw a key trend, related that back to a strength it knew was there, and formulated and sold a very convincing value proposition.

Based on an Interview with H.E. Mr. K. Shanmugam, Minister for Foreign Affairs and Minister Law on 31 March 2014