Famed venture capitalist and author Brad Feld once mentioned in his book “Startup Communities” that it takes about twenty years for a vibrant startup community to develop in a city. These evolutions don’t just happen out of nowhere and need intentional efforts from influential stakeholders in private and public industries to build the foundation necessary for entrepreneurs to thrive. Few ecosystems have been able to execute on this ecosystem building as well as Singapore has. Using Feld’s twenty-year timeframe is suitable for looking at this nation’s development from an emerging market to a highly advanced ecosystem, currently ranking #17 in Startup Genome’s Startup Ecosystem Report and #2 in the World Bank’s Ease of Doing Business Ranking. Singapore laid foundations to focus on entrepreneurship throughout the late 90s, but they increased their efforts to specifically focus on this area at the turn of the century. Its rise as a home to more than 3,600 technology startups, including unicorns Grab, Lazada, and PropertyGuru, has led to plenty of critical learnings on developing an emerging startup ecosystem. Given all these successes, I figured I would take a high-level view of some initiatives that other, more nascent markets can replicate.
Likely the most significant contribution to Singapore’s ecosystem comes from their government. Long before its focus on incentives for entrepreneurship, in the late 20th century, the Singaporean public sector was implementing policies that would eventually lead to their emphasis on startups and technology. Internally, Singapore focused on utilizing its geographic location to expand its shipping and financial industries, becoming a strategic regional supply chain and finance hub. Externally, the government implemented globalization policies to attract multi-national corporations (MNCs) to set up local operations, such as low taxes, easy business setup, and favorable trade agreements. Beyond this, the city-state focused on developing its human capital to meet the needs of these MNCs through free education programs and curriculums designed to meet the skills needed by these same companies. These MNCs brought job opportunities and capital that would eventually become crucial for helping Singapore’s startups scale. Today, 80% of technology MNCs have regional operations in Singapore, including Google, Facebook, and Microsoft. These three key areas of industry specialization, global economic positioning, and human capital investment laid the groundwork for Singapore’s eventual startup ecosystem development.
A fundamental shift in strategy occurred in 1989 when the development of “The Next Lap” happened after a recession in 1985. This document laid out the long-term focus on R&D, technology, and innovation to catch up with developed economies over the next two decades and established critical agencies such as the National Science & Technology Board (now A*Star). With this new approach to innovation, the technology boom at the turn of the Millenium introduced targeted policies explicitly focused on research, entrepreneurial communities, and funding.
In terms of research, since 2000, the government has invested over $80B to fund programs focused on aligning R&D efforts with industry demands. An example of this is its new $12M Blockchain research program focused on developing the adoption of blockchain technology by companies. Singapore is also home to several universities specializing in science, engineering, and technology. The government involves these universities in building connections between researchers, students, and industries. Singapore’s academics also provide direct support to the startup ecosystem, providing far more than talent. An excellent example of this is the National University of Singapore (NUS), which has supported the ecosystem by leading incubation initiatives such as Block71.
For entrepreneurs and startup communities, Block71 is only one example. Both the public and private industries provide hubs, co-working spaces, incubation, and acceleration programs, such as the LaunchPad @ One-North startup hub and NUS Enterprise. Government agencies such as Enterprise Singapore have created the Startup SG program, connecting startups to mentors and awarding capital grants. This agency’s partnerships with the private industry have allowed for over 100 accelerators and incubators in the country. These communities aren’t constrained to operating locally either. In line with Singapore’s early vision of globalization, the country’s ecosystem creates networks in other markets. In 2017, Singapore launched the Global Innovation Alliance (GIA) to create more overseas opportunities for students and entrepreneurs to obtain global experience and connections through collaboration with their counterparts abroad. Under this program, NUS, Block71, and other programs have a global presence. Singapore is also welcome to other countries’ ecosystems establishing a local presence in Singapore, such as global accelerators and CVCs. An excellent example of this is 500 Startups, which recently announced a new acceleration program with Enterprise Singapore.
Startup funding has also been a focal point for both the private and public industries in Singapore. In 1999, the Technopreneurship 21 (T21) program was critical in guiding Singapore into a startup ecosystem capable of receiving international funding. Through this program, The $1B Technopreneurship Investment Fund (TIF) launched as a co-investing vehicle to attract leading global VCs to develop the nascent venture capital sector in Singapore by syndicating private sector investments into startups. T21 allowed the government to rapidly build up its own VC expertise by participating as LPs in top global venture funds and was the catalyst for further funding through public sector entities such as Temasek Holdings and TIF Ventures. On the private side, corporate venture capital arms were the initial providers of risk capital. Over time, traditional VC firms such as Wavemaker Partners and Jungle Ventures have arrived on the scene, helping produce over $17B in total funding received by Singapore startups in 2019, the most in Southeast Asia. Taking things even further, the country’s Economic Development Board just announced the $7.5M Corporate Venture Launchpad initiative to help businesses create corporate venture arms, bringing more funds to the ecosystem.
Digging into every initiative that Singapore has taken to develop its startup ecosystem would take much more than one newsletter. There are new government initiatives announced regularly, such as the latest Tech.Pass to help with global hiring. Honestly, I struggle to keep up with all of the news around everything the country is doing. The essential takeaways for other emerging ecosystems are this: startup ecosystems fully develop with focused and intentional policies from a stable government. These policies should focus on several critical technological industries to compete in, create incentives for external businesses and money to enter the ecosystem, and develop the local talent. Beyond this, both public and private industries need to partner to create initiatives to promote the exchange of ideas, support, and mentoring for a startup community while continuing funding research into new technologies. Lastly, policies need to create easy access points to capital from foreign and local investors to local entrepreneurs. With all these examples of creating a thriving startup ecosystem, I wonder who will be the next Singapore?