By Boo Kok Chuon

The recent speech by Acting Transport Minister Jeffrey Siow at the Institute of Policy Studies conference, he spoke candidly about Singapore’s demographic predicament: our fertility rate has fallen to what he described as an “abysmal” level. If left unchecked, the citizen core would shrink over time. Immigration was therefore framed not merely as a supplementary policy tool, but as a structural necessity, with integration highlighted as the critical condition for sustaining social cohesion amid higher inflows.

It was a sensible and measured speech. The concern is intuitive. Fewer citizens would eventually translate into fewer workers, fewer consumers, and fewer taxpayers. From a policymaker’s standpoint, stabilising population numbers appears to be the most direct way to preserve economic vitality. In this regard, Mr Siow deserves credit for confronting a politically uncomfortable reality head-on.

Population Economics in Plain Language

At its most fundamental level, population economics is about scale. A growing population generally supports higher production, broader consumption, and a wider tax base. Conversely, when population growth slows or reverses, the fear is that the economic engine loses momentum. Businesses sell less, investment appetite weakens, and employment opportunities shrink. Japan is frequently cited as the archetypal example, where demographic decline coincided with prolonged economic stagnation.

Mr Siow’s argument follows this conventional economic logic and it is internally consistent. If population shrinks, demand weakens. If demand weakens, investment retreats. If investment retreats, growth slows. 

From a policy perspective, population becomes the most visible and administrable lever. It is countable, forecastable, and manageable within existing institutional frameworks.

Seen through this lens alone, the emphasis on immigration and integration is pragmatic rather than ideological. 

The issue, however, lies not in the logic itself, but in what the logic omits.

The Missing Variable in the Equation

The omission is marginal propensity to consume, commonly abbreviated as MPC.

Aggregate demand of an economy is not driven by headcount alone. It is driven by how people behave economically once they earn income. Two economies with similar population sizes can experience vastly different outputs depending on how income is earned, allocated, and reinvested.

Without considering MPC, population-based explanations risk being incomplete.

What is MPC?

In layman’s language, MPC asks a very simple question. When someone earns an extra dollar, how much of that dollar do they actually spend.

If most of it is spent, MPC is high; conversely if most of it is withheld or saved, MPC is low.

This behaviour has little to do with thrift or extravagance. It has everything to do with confidence. People spend when they believe income will continue or grow. They save when they believe income is fragile, capped, or easily disrupted.

Importantly, fertility rate does not mechanically affect MPC. Having more children does not cause people to spend more. What shapes MPC is earning ability, income security, and belief in future upside.

Low fertility, therefore, is not necessarily the cause of weak demand. More often, it is a symptom of an economic system that conditions individuals to be cautious rather than creative.

Diving into the Root

MPC is not a variable that can be manipulated overnight. It is deeply ingrained, shaped over time by market culture and the behavioural patterns of market participants. How people choose to spend, save, or reinvest is not a mechanical response to policy nudges, but a reflection of their lived economic reality. To structurally alter MPC therefore requires a change in market culture and participant behaviour. The only channel through which policymakers can realistically influence this is education.

Singapore’s education and labour framework has been remarkably successful at producing employees. Highly skilled, disciplined, and globally competitive employees. This model made eminent sense in an industrial and early post-industrial economy, where scale, efficiency, and execution were the primary drivers of growth.

However, it also comes with a structural ceiling. Salaries, no matter how high, remain linear. Upside is capped. Economic agency is constrained. Even well-paid professionals often choose to save aggressively, not because they lack income, but because their earning power is ultimately dependent on continued employability rather than ownership or control over capital allocation.

In the age of artificial intelligence, this employee-factory framework is increasingly outdated and potentially dangerous. AI compresses skill acquisition, automates routine cognitive work, and erodes the value of task-based employment. A system that trains students primarily to chase grades, follow instructions, and queue for jobs risks preparing them for roles that are increasingly vulnerable to automation and large-scale displacement.

The risk is not merely economic inefficiency. It is cultural inertia. When education continues to optimise for employment in a world that is rapidly devaluing employment as a dominant income model, MPC remains structurally suppressed, not because people are unwilling to spend, but because they are rationally uncertain about their future earning power.

The Solution: Entrepreneurial Skills and Enterprise Creation

Entrepreneurship alters economic behaviour fundamentally.

What distinguishes entrepreneurs is flexibility. Unlike employees, entrepreneurs have the ability to optimise between personal take-home income and retained earnings for commercial expansion.

This distinction matters because it fundamentally changes how wealth is built and how money is demanded.

An employee’s income is largely fixed and linear. Take-home pay is bundled together with CPF contributions, bonuses, and benefits, and consumption decisions are made against the backdrop of employment risk. This naturally creates precautionary demand for money. Savings are accumulated to buffer against retrenchment, illness, or career disruption. Speculative demand may also arise, as employees seek higher-risk investments to compensate for capped earning potential. Transactionary demand is therefore constrained by uncertainty.

An entrepreneur, by contrast, operates across two balance sheets. Personal income is one channel, but retained earnings and equity value sit within the company. The entrepreneur can choose when to extract value through salary adjustments, dividends, or equity disposal. This flexibility allows commercial optimisation rather than forced consumption or saving.

To illustrate, consider an entrepreneur whose personal income appears modest relative to the scale of the business. Profits are retained to expand operations, acquire assets, or invest in new ventures. These retained earnings increase the equity value of the company, which remains economically owned by the founder. Personal wealth therefore grows through equity appreciation rather than immediate income extraction.

This changes money demand behaviour materially.

Because wealth is preserved and compounded within the business, precautionary demand for money at the personal level is reduced. There is less need to hoard cash defensively, as liquidity can be generated if required through dividends or partial equity disposal. Speculative demand is also reduced. The entrepreneur does not need to chase high-risk external investments, because the primary investment already exists in the form of the business itself.

What remains is transactionary demand, and this is where MPC begins to shift.

When an individual is assured by the performance of their business, the success of their investments, and the preservation of wealth through equity, disposable income can be spent with greater confidence. Consumption is no longer driven by fear of future income loss, but by assurance of future income availability. The marginal dollar can be spent not because it is excess, but because downside risk is already buffered within the enterprise.

In this sense, entrepreneurship does not suppress MPC. It restructures it.

Spending is deferred in the early stages of capital formation, but expands later as equity value stabilises and optionality increases. Money demand at the individual level expands, not contracts, because wealth is anchored in productive assets rather than idle savings.

This behavioural shift is difficult to capture through wage statistics or personal income data alone. Yet it has profound implications for aggregate demand. When individuals operate with ownership, flexibility, and capital control, their consumption, investment, and risk appetite respond very differently from those conditioned solely by employment.

This is why enterprise creation alters economic outcomes in ways population growth alone cannot. It changes not just how much people earn, but how they relate to money itself.

Completing the Aggregate Output Picture

The implications of this behavioural shift extend beyond consumption alone. When entrepreneurship reshapes individual money demand and MPC, it simultaneously alters the other components of aggregate output.

In national income accounting, GDP is not measured by consumption alone. It is the sum of consumption, investment, government spending, and net exports. Much of the demographic discourse tends to fixate on consumption, implicitly treating the other variables as secondary or derivative. This is a narrow reading of how modern economies actually expand.

Entrepreneurship directly and immediately affects investment. Unlike employees, entrepreneurs allocate capital into productive commercial infrastructure as a matter of necessity. Spending on technology, intellectual property, premises, logistics, branding, and systems is not discretionary. It is intrinsic to enterprise growth. These expenditures are recorded as investment, and they expand productive capacity rather than merely circulating existing demand.

Net exports are similarly affected. Enterprises that are built around innovation, intellectual property, or differentiated products naturally look beyond domestic borders. Exportability becomes a design consideration from the outset, not an afterthought. When firms sell services, software, content, or products overseas, domestic output increases without a corresponding increase in domestic population. This is growth driven by capability rather than headcount.

Government spending, by contrast, plays a largely stabilising role. It can cushion downturns and provide public goods, but it is rarely the primary engine of sustained expansion. Consumption and government spending redistribute existing value. Investment and net exports create new value.

This is why enterprise creation is structurally more powerful than population expansion. It does not merely raise consumption through higher confidence and restructured MPC. It strengthens investment through capital formation and improves net exports through outward-facing innovation. Growth is generated from multiple components of the equation simultaneously.

When policymakers focus predominantly on population size, they implicitly treat consumption as the dominant driver of output. When they focus on entrepreneurship, they activate all major drivers of growth at once.

This distinction is not semantic. It is foundational.

On Practicality and the Question of Time

A common objection to education-led reform is practicality. Education, it is often argued, cannot change overnight. Cultural conditioning takes time. At best, reforms bear fruit only a generation later, while demographic pressures are immediate and unforgiving.

This objection would have carried significant weight a decade ago. It carries far less weight today.

Artificial intelligence has fundamentally altered the speed at which capability can be acquired and applied. Skills that once required years of formal training can now be developed within months. Processes that once demanded teams, capital, and institutional backing can now be executed by individuals with minimal resources. The bottleneck is no longer access to knowledge or tools, but mindset, agency, and permission to act.

Education reform in this context need not mean rewriting syllabi overnight or dismantling existing institutions. It means reorienting how students are taught to relate to knowledge, technology, and value creation. When AI is introduced not as a shortcut, but as a thinking partner and execution multiplier, the distance between learning and doing collapses dramatically.

What previously took a generation to internalise can now be demonstrated within a much shorter cycle. Enterprise thinking no longer needs to wait for adulthood. It can be cultivated early, safely, and progressively, alongside existing academic structures.

The timeline problem, therefore, is no longer as binding as it once was. With the right framing and tools, behavioural change can precede institutional change. This opens a pathway where education reform and economic impact need not be separated by decades.

The question is, therefore, no longer whether education takes time. It is whether we are willing to recognise that time itself has changed.

Mujong® : An Experiment on How a Product Commercialised in 5 Months

Mujong® is best understood not as a product story, but as an educational and economic experiment. Its significance lies in what it demonstrates about learning, agency, and ownership, rather than in any individual outcome.

Within five months, a complete enterprise was formed around an eight-year-old founder, moving from idea to market participation. The process did not rely on exceptional prior knowledge, nor did it depend on prolonged training. Instead, it was structured around early exposure to ownership, decision-making, and real-world consequences. Learning did not precede action. Learning occurred through action.

The experiment shows that entrepreneurship is not age-dependent. When young participants are given appropriate structures, guidance, and tools, they are capable of understanding value creation, making decisions, iterating through failure, and taking responsibility for outcomes. The role of adults in this process was not to instruct step-by-step, but to provide guardrails, translate complexity into manageable choices, and ensure that the enterprise operated within sound legal and commercial boundaries.

Artificial intelligence played a critical enabling role. By lowering execution barriers and compressing learning cycles, AI allowed the founder to focus on judgment, creativity, and ownership rather than technical limitations. This significantly reduced the time required to translate ideas into tangible outputs, demonstrating that the traditional lag between education and enterprise participation is no longer fixed.

What Mujong® ultimately illustrates is not an extraordinary outcome, but a practical possibility. It shows that entrepreneurship is not a capability that must wait until adulthood, nor does it require years of formal preparation before meaningful participation can occur. When structured appropriately, entrepreneurial thinking and ownership can be introduced early, developed progressively, and exercised responsibly.

Viewed this way, Mujong® serves less as an isolated case and more as evidence of what is institutionally feasible. It suggests that, should policymakers have the will, entrepreneurial skills can be systematically embedded into educational syllabi and introduced at much earlier stages, including lower primary levels. With modern tools reducing execution barriers, and with proper safeguards in place, empowering youths to take ownership of real enterprises is no longer a speculative ambition, but a realistic policy option across age groups.

Conclusion

Acting Minister Jeffrey Siow is right to raise concerns about Singapore’s demographic trajectory. Population trends matter, and they will continue to shape the contours of economic policy. But population size is not the root variable. It is a surface outcome of deeper structural choices about how income is earned, how wealth is built, and how economic agency is distributed.

Focusing on headcount alone risks mistaking scale for strength. Aggregate demand is not determined simply by how many people exist, but by how confidently they can spend, invest, and create. MPC is not a policy lever that can be pulled at will. It is a cultural and behavioural variable, shaped over time by education, ownership, and the perceived relationship between effort and reward.

An education system optimised for employment made sense in an earlier era. In the age of artificial intelligence, it is increasingly misaligned with economic reality. When employment becomes fragile and linear rewards dominate, precautionary behaviour becomes rational, demand remains suppressed, and population decline becomes a symptom rather than a cause.

Entrepreneurship changes this equation. By allowing individuals to optimise between income extraction and capital retention, it reshapes money demand, raises confidence, and expands not only consumption, but also investment and net exports. Growth is generated across multiple components of the aggregate output equation, without requiring perpetual population expansion.

This is not a theoretical proposition. Mujong was conceived as a practical experiment, not a symbolic gesture. Within five months, a fully branded and commercially structured product was launched, led by an eight-year-old child under the right operating framework. If such an outcome is possible today, there is little justification for assuming that enterprise education must take decades to bear fruit.

With modern technology and artificial intelligence, the timeline has changed. What remains is the willingness to rethink first principles.

Population management can stabilise an economy.

Enterprise creation can transform it.

The choice between the two is not binary. But without addressing the root, the surface will continue to demand attention.

Footnote: The author is the Group CEO of Iconomy Group of Companies and a serial entrepreneur, with formal training in law, finance, and economics. He serves as a mentor to Mujong®.