SOUTH-EAST Asia remains the top choice for Singapore startups and businesses as they continue to scale up their efforts despite, or perhaps because of Covid-19, given that this is an area with heightened focus as countries search for solutions and opportunities.
International projects increased by about 25 per cent, from 360 projects in the first 10 months of 2018 to about 450 projects in the same period in 2020. Markets with the highest number of projects include Malaysia, Indonesia, Vietnam, Thailand, and the Philippines said Enterprise Singapore's (ESG) assistant chief executive officer, Tan Soon Kim in an interview with The Business Times.
"Our companies are also increasingly interested in South-east Asia for innovation partnerships, given the region's growing emphasis to develop their innovation and startup ecosystem in the past few years," he said.
"The region has built a strong reputation in this scene, with 13 unicorns groomed here, of which seven are based in Singapore. The region has also been attracting a significant number of global investors, with many parking their funds in Singapore."
Early-stage venture capital fund Wavemaker Partners has seen interest in the region growing steadily since it began investing in South-east Asia in 2012.
"On the one hand, Covid-19 affects startups the same way it affects all businesses. On the other hand, it's just another challenge among the many challenges startups have to deal with anyway," said Wavemaker managing partner Paul Santos.
"We believe change is what drives opportunities to innovate. Covid-19 is driving major changes which are resulting in opportunities for startups to innovate."
Peer-to-peer lending platform Funding Societies' co-founder Kelvin Teo takes a similar view.
"Covid-19 was a watershed moment for startups in many sectors. However, it has also built significant resilience and maturity among surviving firms, which serve as a solid foundation to become impactful companies," he said.
From its founding in 2015, Funding Societies has been busy. It launched in Indonesia in January 2016 under the name Modalku and in Malaysia in February 2017. In October this year, FS Capital was approved as a participating financial institution under ESG's Enterprise Financing Scheme enabling it to offer working capital loans and trade loans to more SMEs.
Even as the team keep their eye on this ball, they aim to selectively enter new countries in the region and strategically explore new business models as they contemplate their next stage of evolution, said Mr Teo.
"We typically invest considerable time to prepare before entering a new market. We're passionate about Thailand have had a SWAT team there since late-2019, with high hopes for 2021."
Startups in the region are learning to tap government initiatives to build up their innovation ecosystem.
In Thailand, for instance, the National Innovation Agency is currently in discussion with banks to provide loans with zero or low interest for startups. Meanwhile, Malaysia has funding for high-tech startups and is also promoting equity crowdfunding.
In Vietnam, the National Agency for Technology Entrepreneurship and Commercialisation Development under the Vietnam Ministry of Science and Technology signed a Memorandum of Understanding with ESG in 2018 to facilitate two-way collaborations for startups, ecosystem builders and tertiary institutions.
On the local front, ESG has seen growing interest in its Global Innovation Alliance (GIA) Acceleration Programmes, with the number of participating companies in GIA tripling from 103 in 2019 to 370 in 2020.
On Monday, Minister of State for Trade and Industry Alvin Tan announced the expansion of the network to include Manila, in addition to existing nodes in Jakarta, Bangkok, and Ho Chi Minh City. The latter programmes have begun their first runs this year and there are plans for programming in GIA Manila to commence in early 2021.
"Companies are cognisant that there is no returning to pre-Covid times. To recover and become more resilient in the future, companies, especially startups, will need to innovate to set themselves apart and gain an edge over their competitors. Collaborations with the right partners, whether through participation in co-innovation programmes or open innovation platforms, can help them develop more innovative solutions, adapt business models and accelerate access to markets where growth opportunities are abundant," said Mr Tan.
This push for collaboration runs both ways. Mr Tan noted that large companies have been working with ESG to seek solutions from SMEs and startups through platforms such as the inaugural South-east Asia Open Innovation Challenge (SEA OIC).
"Corporates in South-east Asia are particularly keen on developing new solutions to support financial inclusivity, reaching out to rural areas and small businesses via mobile, SMS or online banking. VNG Cloud from Vietnam for example, will be looking for partners to co-innovate technologies to support its eKnow Your Customer (eKYC) solution to reach out to over 60 per cent of Vietnam's population living in rural areas at the SEA OIC," he said.
The SEA OIC was also launched by Mr Tan at the Singapore Week of Innovation and TeCHnology 2020 (SWITCH 2020) on Monday. The first collaboration of its kind, the SEA OIC spans five regional corporate-level partnerships in Indonesia, Malaysia, Thailand and Vietnam. Companies that have come onboard include Central Group, Emtek Group, Hong Leong Holdings, Sunway Group and VNG Cloud.
Source: Mindy Tan / The Business Times © Singapore Press Holdings Limited. Read full article here.
May 25, 2021
