A decade ago, if you told Singaporeans that over the next decade it would transform into a startup hub, they might have promptly answered ‘no way.’ Fast forward to 2016, and you see an island rehabilitated. There are handfuls, if not hundreds, of innovative new companies, numerous hubbled in "Square 71," a building near INSEAD, the National University of Singapore, and government-supported innovation hubs carrying bizarre named like Fusionoplis and Biopolis. The Economist monikered Block 71, “the world’s most tightly packed entrepreneurial ecosystem.”
There are a few companies bagging venture funding every few months and an embarrassing exit every year. Today, there's a speculation apparently; VC investment in the tech segment expanded from under $30 million in 2011 to surpass $1 billion in 2013; with 10 exits in 2014. Although, some of those supposed liquidity events are not registered by global standards, similar to the $30 million that customer service chat provider Zopim acquired. In any case, others have been bigger, for example, the $200 million value Japanese e-commerce company Rakuten put on Viki, a video-streaming service.
The Singapore startup hub surge appears to be especially surprising given the city-state's staid notoriety and the stagnant start-up scene only a couple of years back. As governments around the globe attempt to goad entrepreneurialism to drive work creation and economic joie de vivre, it merits venturing back to consider the three elements that in my perspective have coalesced to power the movement.
Take a look at this. Singapore tops as one of the easiest nations to do business in. There are rules and regulations, without a doubt, however, they are unmistakably laid out and simple to follow. New firms can be set up in a couple of hours, if not minutes. Intellectual properly is respected, and the rule of law is straightforward. Immigration is no less a hotly debated issue in Singapore than other nations, yet Singapore makes it simple to get highly educated workers into the country, and has a specific work pass focusing on entrepreneurs. The clean, efficient city has some benefits over Bangkok, Shanghai, Manila, or Jakarta.
Aware of its worldwide notoriety among the innovative class, it's attempting to attract, the government has endeavored to address the old view that there isn't much to do with two casinos, a Universal Studios, Asia's largest aquarium, a botanic garden, a 55,000 seat multipurpose stadium, a few internationally acclaimed restaurants, and an effective, cutting-edge airport terminal that makes leaving the nation a breeze.
Entrepreneurs have for some time been able to take advantage of a scope of awards and related projects to gain traction. In 2008, under the National Framework for Innovation and Enterprise (NFIE), the government introduced the Early Stage Venture Investment Fund program. The initiative is called the Binational Industrial Research and Development Foundation, and allows five venture capital companies to receive matching assets from the government. Eventually named the Technology Incubation Scheme, the project brought a surge of diverse investors into the nation by offering to set up 85% of the capital in a start-up when investors poured in 15%.
Investors in the ESVF and TIS programs need to make good the cash-flow to actuate the legislature coordinating programs. It is difficult to make an ecosystem overnight, yet reliable, purposeful endeavors by the legislature have given a genuine boost to new companies in Singapore.
Further, research shows that biggest factor predicting whether somebody will end up being an entrepreneur is whether the individual has received an inheritance or a gift. Singapore's sensational development in the course of recent years implies that a large number of its citizens are well-off to take the entrepreneurial course.
However, accomplishing something as risky as starting a business when you could work for a big bank, was countercultural for the best and brightest in the lost a decade ago. In recent years political leaders have determinedly talked up the significance of entrepreneurialism; state-supported colleges forcefully pushed innovation; and the state-owned TV company MediaCorp has run TV programs praising entrepreneurialism.
These three elements make a reinforcing cycle, as pioneers who enjoy success discover they need to do it once more. In 2010 Melvin Yuan co-founded YFind Technologies, a company with a clever innovation that could accurately pinpoint people’s location inside a building by tracking their cellphones' communications with WiFi access points. That ability could be the foundation of extremely profitable business intelligence services such as retail "heat mapping," showing refined analysis of in-store activity. In 2012, an investor poured some funds into the company, along with the government contributing 85%, only to be acquired a few months later by Ruckus Wireless, a U.S.-based WiFi service provider. Yuan did well from the transaction, he’s gone on to found another start-up that is developing an innovative way to match people seeking original art.
Some Singaporean entrepreneurs are starting to put resources into the up and coming era of startup hub. For instance, Hian Goh, who in 2005 helped to establish the Asian Food Channel, in 2011 put resources into Chope, a local restaurant booking portal. After Scripps Networks Interactive acquired the Asian Food Channel in 2013, Goh founded his own venture capital firm to put resources into local new companies.
Worldwide speculators are starting to take notice. Dave McClure's 500 Startups recently poured investment into a Singaporean real estate portal. Moreover, global venture capital firms like Sequoia and DFJ are stirring up the movement. Two years ago, the government announced a pool of participants in the EVSF program, including Walden International and Monk's Hill Ventures. A significant number of these investors see Singapore as a launching pad to emerging markets like Vietnam, Indonesia, and the Philippines. More than a third of the 156 software companies founded since 2003 that are currently worth more than $1 billion, are based in Asia.
If the coming decade is anything close to the developing we’ve seen since 2010, we expect Singapore could be the next Silicon Valley.