Southeast Asia’s startup scene is booming and bustling. From the likes of ride hailing apps to ecommerce platforms, the region’s startups raised about US$11.6 billion in the first half of this year – more than double that of a year earlier, according to DealStreetAsia.
Singapore is keen to ride this growing wave of entrepreneurship. Enterprise Singapore (ESG), an agency under the Ministry of Trade and Industry, has been working to make it easier for startups to enter local and international markets; raise funding; and nurture talent.
GovInsider caught up with Edwin Chow, Assistant Chief Executive Officer of ESG, to discuss the opportunities ahead for Singapore’s startups and enterprises.
It’s crucial to innovate with the market in mind, says Chow. “What is the problem that your solution will solve, and more importantly, are people prepared to pay for that solution?”
To encourage such innovations, ESG and the Infocomm Media Development Authority (IMDA) launched the Open Innovation Network in 2018. It helps to identify companies that have a problem “they’re prepared to pay to solve”, he says.
These problem statements are published on the Open Innovation Network’s website. Any company regardless of industry background or expertise are invited to submit ideas.
Finalists are selected to build prototypes of the solution. Such ‘challenge-style’ tenders have also been used by Israel.
The platform allows small enterprises to compete equally on a level playing field, giving them a “leg up”, Chow explains. It also helps government agencies explore new tech instead of going for tried-and-tested products, Edwin Low, IMDA’s Director of Innovation & Technology Ecosystem, told GovInsider.
Agencies are typically keen to try new technologies, but have limited access to capable providers, and a lack of knowledge when it comes to embarking on an innovation project, he explained.
The market in Singapore is “very small”, so ESG also helps local enterprises expand overseas in three ways, Chow says.
First, it hosts Open Innovation Challenges with partner countries. The agency launched the Southeast Asia Open Innovation Challenge last year with Indonesia, Malaysia, Thailand, and Vietnam. Startups and enterprises are invited to submit solutions in fintech, for instance, and successful participants can receive a grant of up to S$20,000 (US$14,700).
Second, the Global Innovation Alliance network helps connect Singapore’s startups to international business and tech communities. It also gives international startups the opportunity to use Singapore as a springboard and scale in Asia.
The programmes provide businesses with coaching and networking sessions to help them establish a presence in that country’s market. This will also help to position Singapore as part of a “global network of innovation hubs” where companies can quickly start a company and scale internationally, Chow says.
Third, ESG connects Singaporean enterprises with a partner overseas — whether it’s another enterprise, a large company, or a research institute. “If you want to sell your product overseas, as an SME with limited resources, you can probably increase your chances of success if you find the right partner,” he says.
Some of ESG’s partners for this Co-Innovation Programme include Israel, Shanghai, and the Eureka Network — an intergovernmental network of over 45 countries including the EU.
The partnership with Eureka received 84 joint applications last year.This is “indicative of the appetite of European companies who want to partner with our local SMEs in innovation”, Chow says.
Matching startups with funding
ESG helps Singaporean startups and enterprises gain funding. It co-invests with venture capitalists “dollar-for-dollar into promising startups”, says Chow. This goes up to S$2 million (US$1.47 million) for a tech startup, and up to S$8 million (US$5.88 million) for a deep tech startup.
This helps Singaporean entrepreneurs raise capital, and also identifies international startups on venture capitalists’ radars and brings them into Singapore, Chow explains.
The agency is creating a “trampoline” for aspiring entrepreneurs, and those who “have tried and failed to start again”, he says. It works with universities and venture builders to provide coaching and support.
This way, entrepreneurs can have the “comfort of knowing if something fails, they can take this experience, go back into a venture build programme, and use it to try again.”
All successful enterprises will be “agile and resilient, because it’s never a straight line in entrepreneurship,” Chow believes.
“For every sort of success that you have, there’s probably 99 other customers who walk away or 100 other venture capitalists who said no,” he shares.
ESG is working with institutes like the National University of Singapore to “inculcate this sense of resilience” among students at an early stage. Undergraduate students are sent overseas for a full year to Silicon Valley, New York, and Beijing to study and carry out internships.
“We believe that as the universities continue to train a big number of such students, many of our next generation startups will be founded by such resilient people.”
Singapore’s vibrant startup scene plays a key role in the city’s position as a financial and innovation hub. Providing entrepreneurs with the right talent, training, market and funding opportunities, will certainly go a long way.