SINGAPORE - Perspectives from The Economist … · Informal innovation Singapore ... Global Startup Ecosystem Rankings, ... of Singapore’s start-up scene, for example, is

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INFORMAL INNOVATION:

SINGAPORE

Background

have an MBA,

another Master’s degree

a PHD

Main technology enablers:Internet of Things, �ntech, smart manufacturing, smart home46%

of surveyed entrepreneurs are between ages 18 and 35

53% Male Female 47%

7% 5% 5% &

Ease of launching a new business Tied with San Francisco and Ho Chi Minh City

Globally,Singapore ranks: #2

Use of global online networking groups Participation insix or more groups; Tied with Ho Chi Minh City

#3: Value of business associations when starting a business Tied with Shanghai

City comparators

# 1 # 3 # 4 # 5 # 6 # 7 # 8 # 9 # 1 0

2 © The Economist Intelligence Unit Limited 2016

Informal innovationSingapore

Much of the government’s energy has been focussed on encouraging the growth of support structures for start-ups. This has contributed to the growth on Singapore soil of home-grown and foreign-based accelerators and incubators. Prominent amongst the home-grown variety are JTC LaunchPad—a 5-hectare site for start-ups and incubators where integrated start-up spaces such as BASH are located—Joyful Frog Digital Incubator, Startup Nation, The Co-Foundry, and SPH Plug and Play. Overseas accelerators attracted to Singapore include Startupbootcamp Fintech (the UK), Muru-D (Australia) and Rockstart (the Netherlands).

Singapore entrepreneurs surveyed by the EIU confirm that formal support structures have been instrumental in helping them get their businesses off the ground. Business and industry associations top the list in terms of relative importance. According to Ted Chen, co-founder of Evercomm, an energy start-up and a serial entrepreneur, industry associations and government agencies are

Having topped the World Bank’s Doing Business rankings1 (of 189 countries) for ten years running, Singapore might also be expected to be one of the world’s leading start-up cities. Judging by at least one international assessment, it is making progress in that direction. In 2015, for example, it rose to 10th position in the Global Startup Ecosystem Rankings, becoming the first Asia-Pacific city to break into this select group.

Rob Findlay, a senior vice-president at DBS Bank and co-founder of Next Bank, a financial industry community, thinks the city-state “has absolutely everything going for it” as a place to start a business. Only Hong Kong is a comparable location in Asia, in his view. A hands-on government approach toward start-ups is one contributing factor: “Singapore hits it out of the park compared to others when it comes to things like the large volumes the government is willing to invest in supporting entrepreneurs.”

1 The annually updated table from the World Bank compares the regulatory ease of doing business in each of the countries. Several, although not all, of the criteria are specific to starting a business.

Most important sources of support when starting your business (% responding “important” or “very important”)

Business/ industryassociations

67%

Government agencies/departments

64%

Banks or other �nancial institutions

63%

Other entrepreneurs met ininformal communities or activities

52%

Incubators / accelerators 59%

Other entrepreneurial communityactivities, such as events,

co-working spaces, or happy hours

54%

Most helpful activities in Singapore when starting your business (Top responses)

Global online networking,eg LinkedIn

46%

Local online networking,eg local MeetUp groups

28%

Visiting innovation parks / hubs 12%

Physical networking organisedby international organisations

13%

Visiting co-working spaces 20%

Greatest challenges entrepreneurs in Singapore face in starting a business(Top responses)

Availability of �nancing45%

Fear of failure /Afraid of the unknown

38%

Talent skills,eg dif�culty in �nding employees

with the right skills locally

20%

Level of formalgovernment support

25%

3© The Economist Intelligence Unit Limited 2016


as the Singapore Entrepreneurs Network (which has been operating since 2005) and Co-Founders Lab.

Different types of communities serve different groups of business founders. A unique feature of Singapore’s start-up scene, for example, is the diversity of its entrepreneurs. Mr Findlay, an Australian transplant who co-founded a community, says informal networks are numerous and extremely important for the city’s expat contingent of entrepreneurs. “There are quite a lot of informal networks here that are about people’s common interests and skills, people who are new to town and people who have been here for a long time.” Singapore’s transient ecosystem has its advantages: local businesses can tap into a regularly replenished talent pool as they test their business models locally, before expanding into the rest of Asia.

Communities also cater to specific industries or areas of activity. Mr Findlay’s Next Bank (which is not exclusively focussed on start-ups) supports innovators in the financial industry. Ted Chen, an engineer by training, says that he often gets useful advice in events and forums organised by HackerspaceSG, a co-working space and community for software engineers. “Maker” communities – for individuals pursuing projects in small-scale production – are also now active in Singapore. “All these groups help open doors to advice, new skillsets and introductions to formal support structures,” says Mr Chen.

Singapore’s universities are another source of entrepreneur networks. According to Mr Chen,

especially important for business-to-business (B2B) start-ups, and are where he has turned for expertise, introductions and even financial assistance.

Singapore hits it out of the

park compared to others

when it comes to things

like the large volumes the

government is willing to invest

in supporting entrepreneurs.

Rob Findlay, a senior vice-president at DBS Bank and co-founder of Next Bank

Multiple cultures, multiple communities

Less formal networks and communities (the lack of structured programmes and commitments constituting their “informality) are also a valuable channel for obtaining advice, introductions and other support. Over half of the survey respondents point to informal communities and activities as important sources of support. Some of these are likely to be facilitated by international groups such as Startup Grind, or local organisations such

4 © The Economist Intelligence Unit Limited 2016


University networks have another important use. Most Singapore B2B start-ups must export to flourish, says Mr Chen; the domestic market is small, but a good base for expansion. Mr Chen taps into his university-based networks to help him make connections when launching into foreign markets, whether it’s next door in Malaysia or further afield in the US. The professors, he says, “seem to have connections everywhere”.

NTUitive – Nanyang Technological University’s commercial and venture arm – for example, hosts social events, while informal communities also revolve around individual faculty. These networks, says Mr Chen, can help alumni embarking on new ventures get introductions to larger companies and government agencies. He adds that, in Singapore, obtaining government grants or other support is difficult without the credibility a professor’s reference lends.



67%


64%


63%


52%




54%



46%


28%



13%





38%



20%


25%



67%


64%


63%


52%




54%



46%


28%



13%





38%



20%


25%

5© The Economist Intelligence Unit Limited 2016


Fear of the unknown When asked about the toughest challenges new business founders face, Singapore survey respondents echo their counterparts elsewhere in citing financing difficulties and finding skilled employees. High on the Singapore list, however (second only to financing) comes the fear of failure. Entrepreneurs are stereotypically hardy characters, and those from Singapore appear to be no exception. It appears from the survey, for example, that Singapore entrepreneurs do not feel the need to seek emotional support from their networks and communities. The latter’s services as sounding boards and fonts of practical advice, however, are helping local entrepreneurs gain much-needed confidence as they get their new ventures off the ground.

Digital denizens Entrepreneurs in the city also make active use of online networks for support. Over half of those in the survey (56%) are connected into social networking groups on big global platforms, such as FaceBook or LinkedIn. Over four in ten (42%) also connect with peers in locally oriented social networks. Moreover, the survey respondents tap into many such groups: 57% are involved in six or more global online groups, for example. Participation in such global social media networks have proven more helpful than any of the various types of networking activities for 46% of Singapore entrepreneurs.

Mr Findlay agrees that much practical advice is gained by new business founders in social media communities. The most popular used by his circle, in Singapore and around Asia, are mobile messaging platforms such as WhatsApp. He emphasises that these are used primarily for problem-solving, such as filling the gap for a skilled specialist, finding office space or getting suggestions for meeting specific technology challenges. “These are nice little bulletin boards,” he says.

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SINGAPORE - Perspectives from The Economist … · Informal innovation Singapore ... Global Startup Ecosystem Rankings, ... of Singapore’s start-up scene, for example, is