Six ways governments are working with startups
Case studies from around the region on how governments are boosting startup ecosystems.
For the entrepreneurs in tees and jeans, running on coffee and ambition, working all hours, operating out of homes and co-working spaces - the way ahead can be made a little easier with help from governments.
There are several ways that governments around the region are hoping to work with startups. Through providing funding or mentoring, lowering taxes and easing regulations, countries can help to ensure that great ideas can get to a stage where they can improve citizens’ lives.
We’ve rounded up a few examples below of how Singapore, Israel, Australia, Thailand and Japan are working to boost their startup ecosystem.
1. Caffeine-fuelled networking sessions
In Japan, the government is forging a network of startups over a cup of joe. The city of Fukuoka has introduced a startup cafe initiative, where cafes host regular networking sessions. These sessions allow entrepreneurs to mingle with venture capitalists, accountants, lawyers and public sector officials, that can provide free business advice and support. At the cafes, entrepreneurs will also get help in refining business plans, and will be introduced to human resource specialists and residence and office realtors.
This initiative is part of a broader plan to boost new businesses in the city as Fukuoka chases its ambition to be a startup hub. The city will also reduce taxes, attract foreign talent through startup visas, provide subsidies to governments, organise contests for entrepreneurs to pitch their ideas, and ease regulations, Mayor Soichiro Takashima, told GovInsider. “My plan is to move employment into the innovative industries,” he said.
2. The merits of ‘challenge’ tenders
In Israel, the government is levelling the playing field for the little guys. “We are trying to switch to what we refer as ‘challenge-style’ tenders,” Dror Margalit, Chief Technology Officer of smart cities programme Digital Israel, told GovInsider.
Instead of tenders of old, which invite startups to bid for predefined solutions, the country is now ‘challenging’ them to come up with solutions to problems that cities face. Shortlisted startups will then pitch their ideas to the government. These solutions will be selected for trials which, if proven successful, will lead to wider implementation of their technologies.
Margalit is also ensuring that procurement and service standards are in place before startups can sell to Israel’s cities. For example, startups may offer “basic solutions”, such as providing and maintaining a website and its services.
3. The ASEAN hub for startups
In Thailand, the government wants the country to be “the ASEAN hub for startups” - and is willing to pay for it. It has set aside US$425 million to boost its startup ecosystem, Somchai Sujjapongse, the Permanent Secretary of the Ministry of Finance, told GovInsider. Sujjapongse added that as the startups in Thailand grow, they will attract startups and entrepreneurs from elsewhere.
To start, the government is focusing on boosting four areas: food and agriculture; high tech (robotics, smart devices and sensors); healthcare; and lifestyle and culture (particularly tourism). Thailand is also increasing the awareness among citizens of financial opportunities available to them. The National Startup Committee will identify key problems and invite startups to submit solutions for cash rewards.
The government will also be providing co-working spaces and funding, and reducing taxes, said Sujjapongse. And it is learning from the expertise and success stories of China, Korea and Japan, he added.
4. The startup for startups
In Singapore, there is a gap in the tech startup space where deep tech companies - dealing in artificial intelligence, virtual reality, and smart energy, to name a few - do not enjoy the same amount of investment that fintech and e-commerce companies do. The SGInnovate agency is helping these deep tech entrepreneurs to succeed and bring ideas from the lab to the market.
The agency helps fledgling deep tech startups with building prototypes, finding funding, scaling up, and other challenges they may face in the journey to commercialisation. Founding CEO Steve Leonard described his team to GovInsider as “the commercial guys”.
Housed at the SGInnovate headquarters are teams that are working on solutions that hopefully “address important problems that Singapore, and the world, face”, according to Leonard. One team has developed a way to treat industrial wastewater faster and cheaper. Another is using smartphones to assess chronic wounds, and a third is working on making buildings more energy-efficient.
These startups also have access to resources such as legal advice and accounting help to “make it as frictionless as possible so they can stay focused on their core mission”, Leonard said.
5. Giving the green light to viable startups
Singapore is also providing a “green lane” for local startups to sell to government through the Accreditation@IMDA project, which helps them avoid lengthy public sector procurement cycles.
Putting these startups on a fast track means it is easier for them to win contracts from government agencies - kickstarting their success and ability to scale up. “Government agencies, if they are looking for solutions that these companies can provide, must procure from these 17 companies first,” Jacqueline Poh, Chief Executive of GovTech, told GovInsider.
Of course, the team is careful about accrediting only viable startups, said Accreditation Director Edwin Low, and that they look out for those that show potential - startups which have a disruptive product, are scalable, and have good management.
6. Startup weekends
In Australia, Adelaide is looking to boost the startup ecosystem as one solution to drive down its unemployment rates, which are the highest in the country.
Startup Adelaide, a non-profit that provides local startup support, is taking the lead on this. Managing Director Jenny Vandyke told GovInsider how it runs events called Startup Weekend, where participants get the chance to launch their business under 54 hours.
And teams get more out of it than just building a website or prototype: “You’ve got clients, you’ve got money in the bank, you’ve got your website launched, you’ve got proof and concept within those 54 hours”, said Vandyke. The events are also a great opportunity to expose university students to the world of startups, and even job opportunities with said startups, she added.
Startups can fail for any number of reasons. Government initiatives like these can play a part in making sure that truly innovative businesses and ideas make it to market - and make a difference.