A few weeks ago, I wrote about 3 startups that were disrupting the retail industry in Singapore. This week, I’m going to take a macro view of the startup landscape in Singapore.
Singapore, whose official languages include English, Mandarin, Malay and Tamil, possesses the capacity to embrace people of multicultural backgrounds from all over AsiaPacific. Despite being an island city state with a population of just 5.5 million, Singapore boasts some of the world’s wealthiest citizens with GDP per capital at US$71,310 indicating strong spending power from its domestic consumers. Most importantly, its geographical location allows it to effectively present itself as a gateway to a population of nearly 600 million throughout the Southeast Asian region.
As such, Singapore takes a unique place in Asia that enables new enterprises to flourish and grow. Some of the contributing factors to the city’s startup successes are growth opportunities, governmental and regulatory support, ease of starting businesses, and geographical advantage. These highlights are appealing to entrepreneurs and investors alike.
Currently, there are more than 400 active VC investors in Southeast Asia looking for their next investment, and Singapore is on the list of target destinations. With 12 recent exits and a significant number of startups on large valuations, there is a room for greater upscale in Singapore’s startup ecosystem.
The great diversity in the product mix of Singaporean enterprises is yet another success factor. The city’s high rate in broadband and mobile penetration which apparently is one of the world’s highest coupled with its reputation for its IP protection and global financial infrastructure have contributed to its success.
Despite all of this, startups are unlikely to become billion dollar businesses by solely operating in Singapore. In this regard, targeting the regional market should be Singapore’s top priority and leveraging the ASEAN economic community can be a great advantage. This will eventually help nurture a role model for the consumption of startup goods and services in Southeast Asia. With enhanced improvements in local exits and IPO opportunities for startups, Singapore may have the potential to achieve market maturity that is comparable to those in Silicon Valley and Tel Aviv.
Nevertheless, there are voices concerning the startup ecosystem in this thriving city, particularly in the lack of local technical talent in the Singapore startup segment. Up to this point, the city has yet to see a ground-breaking technology startup that is founded by a Singapore-born entrepreneur. Singapore produces approximately 58% of its graduates in Engineering Sciences, Business & Administration and Information Technology every year, most of whom, however, pursue careers in the multinational corporations and the public sector. There is a predominant mindset amongst the Singaporean youths to pursue stability instead of entrepreneurship. Many feel that they would better off gaining experience and financial know-how and status by working for an established firm rather than founding a startup. All in all, while it is known that Singaporeans don’t take enough risks, you still need knowledge and experience to drive towards startup success.