The entrepreneurial ecosystem of Singapore is primarily a consequence of the healthy confluence of various stakeholders: the government, corporates, entrepreneurs, universities and risk capital.
According to Dr Alex Lin, who heads the Infocomm Development Authority (IDA) of Singapore’s venture capital unit IIPL, academics, entrepreneurs and corporates are among the many elements in Singapore’s entrepreneurial ecoystem.
IDA’s key mandate is to establish the city-state as a premier business destination for entrepreneurs and a base for technology entrepreneurs globally. Part of these efforts are undertaken by their venture capital unit, Infocomm Investments (IIPL). Lin breaks down how each stakeholder plays a significant role in building a thriving startup ecosystem in Singapore:-
Government & large corporates key enablers
The Singapore government has played a concerted effort in developing the startup ecosystem, with its focus on infrastructure, commitment to the Smart Nation strategy and provision of grants and incentives.
Lin observed: “The Singapore government is highly supportive of startups and hence there are various grants and schemes available to them from product creation to marketing.. Most other governments either replicate what Singapore is doing or are totally confused of what their own startup strategy might be.”
Corporates are another major stakeholder, identified by Lin, given their need to continually respond to customers’ demand for faster, better, cheaper products and services. Often, corporates drive innovation within the organisation through the use of intrapreneurs, a growing corporate phenomenon that requires specific suites of procedures and protocols to be in place.
Alternatively, they achieve innovation through strategic partnerships and acquisitions of startup ventures for co-innovation.
Lin observed the growing trend of corporates seeking collaborations with startups so that these enterprises could either accelerate, incubate, invest or acquire them when appropriate. Through collaboration with corporates, startup ventures gain access to customer base, infrastructure, and domain knowledge.
Lin says, “IIPL invested in eight accelerators, with two more in the pipeline. This created a tsunami of interest in such partnerships, resulting in 17 organisations (mostly corporate) currently in various stages of acceleration collaboration with IIPL.”
He added, “Most of corporate headquarters are located in Singapore, therefore collaboration with corporates is easier to set up. This reduces the startup’s desire to continue in countries other than Singapore.”
Top notch schools make Singapore an entrepreneur’s heaven
Singapore offers the perfect example of how the various stakeholders can operate in sync to support innovation-driven enterprises, says Lin. This is evident in the relationship between three key communities – academics & investors – have been shaped.
Lin explains, “Although only 8% of graduates are entrepreneurially inclined, this is not any worse than London (9%), or Silicon Valley (11%). The graduates’ desire to start up is growing and parents are increasingly accepting their children’s desire to start up.”
He added, “Although neighbouring countries may have more entrepreneurially inclined graduates, it was found that most aspired to set up a base in Singapore to take advantage of our tax regime.”
Elaborating on the role of universities in building the ecosystem, Lin stated: “Singapore universities and research institutions (RIs) rank amongst the top few globally. There is more than $3 billion being injected annually into R&D programmes. These are technologies available for startups to tap into and make use of, hence it is an entrepreneur’s heaven.”
He added, “most universities in the region are weaker than local universities like NUS, NTU, except Taiwan and Korea. Hence most startups look for technologies from Singapore universities or research institutions (RIs), and have the desire to stay in Singapore.”
Accelerators to the rescue of investors
Lin observed: “A venture capitalist, on an average, meets 600 startups before considering investing in one. This high filter rate is due to a lack of sustainability and viability of startups. The acceleration initiative that Singapore has undertaken is a means to solve this problem. Singapore has complete risk capital from FFF to seed, to early VC, to VC, to PE.”
“All are busy and happily ‘encroaching’ each other’s territories. This actually created healthy competition amongst the players and pushes the risk capital to do more to help its portfolio companies”, he added, noting, “Due to the immaturity of neighbouring ecosystems, there are probably in a situation where there’s a disproportionate number of angel investors and less seasoned investment professionals.”
Innovation & intellectual freedom
Stephen Sass, an emeritus professor of material sciences and engineering at Cornell University, argued that intellectual freedom is essential for innovation in a 2014 New York Times opinion piece. Observing
Sass argued that until China “moves its institutional culture away from suppression of dissent and toward freedom of expression and encouragement of critical thought”, it would be unable to match the US in terms of innovation. While excelling at higher-value manufacturing, refining existing technologies and reducing their production cost. Sass maintained that China would be unable to advance innovation.
In a 2014 interview with e27, Dr Lim Tit Meng, chief executive of Science Centre Singapore observed in response: “I agree that if a culture is not for freedom of speech and expression, then innovation will be impaired. You need to challenge conventions and create new possibilities, you must dare to challenge convention and dogma. Through that, you come up with a paradigm shift.”
Lim added, “In Singapore, we are driven by “model answers”, so we tend not to be as innovative. The new generation of students who are savvy in terms of seeking knowledge, they’re becoming more innovative. Look at the Maker Movement! For William Hooi (founder of Singapore Makers), it gelled with his dream. Now, there is a strong private sector component driving it from the grassroots due to him.”
However, Lin sees Singapore’s startup ecosystem and innovation policies as being on the right track. He comments: “On freedom of speech and ability to dissent in entrepreneurship, I don’t think these aspects are necessarily lacking in our current ecosystem but as with all things, these should always be in moderation. Tethering the balance will be the challenge.”
He adds, “So while people in this space are generally free and open to air any thoughts and opinions which encourages a healthy discourse, such freedom also comes with a responsibility. One will have to be responsible for what they say, and for the consequences of his/her words and actions.”
He notes that within entrepreneurial circles, startup ventures must be willing to share and discuss their product, in order to get advice and coaching from mentors, who will also need to be willing to impart their knowledge and skills.