Re-emergence of the iron rice bowl will kill innovation

Recently, at a meeting on promoting youth entrepreneurship in SE Asia, I made a comment that the "re-emergence of the iron rice bowl will kill innovation and entrepreneurship". A person from the government civil services asked me if the recent economic crisis taught me nothing. I answered that the economic crisis taught me a lot, especially that there are a lot of people who claim to be economic or financial experts with very little understanding of the economy or finance. Just like the meeting he and I were in, where all the talk about promoting entrepreneurship was done by a group of civil servants who are often the embodiment of the iron rice bowl.

I will not pretend that I enjoy the tumultuous economic times we are in, neither would I want to loose my livelihood at a moments notice, but I am of the opinion that in order to enjoy progress in technology, to enjoy the ability to generate value, wealth and uplift large segments of impoverished society, we can not depend on government hand-outs. We will need to innovate, generate private sector employment and encourage entrepreneurs.
Increasingly young educated college graduates are looking for employment in the government or government linked companies/research labs. In an informal poll with graduating students in Singapore, US, and the UK, the top preference for jobs were government jobs where basically one could never be laid off. Having smart, educated people looking for the safe bet is not going to help progress. Unfortunately many of the schemes used to encourage young entrepreneurs are conceived by the very people who abhor risk and want the safe bet. So how effective are those programs going to be?
Too much risk taking caused many of the problems that exploded on us in the last 12 months. Now nurturing a generation of "rice bowler" could swing the pendulum too much the other way, rendering young professionals unsuitable for employment in the private sector. In effect many of the policies being adopted are leading to diminishing competitiveness of local populations, thereby increasing the need to look for talent elsewhere.