Building a Regional Business in Singaporelink
Singapore is widely recognized as one of the corporate hubs of Asia, alongside Hong Kong. This is owed primarily to its favorable and strong corporate laws and protection and the ease of transferring capital in and out.
In 2020, the Singapore government set aside an additional $300million in the Startup SG Equity Initiative to invest in DeepTech sectors and encourage entrepreneurship in those markets such as AI, robotics, biotechnology and others. The Ministry of Finance writes that these funds are intended to “catalyze private sector investments into Singapore-based startups with strong IP and global potential”. The policy has received widespread attention. Noted in its approach is that it often takes longer incubation periods to create innovative processes in DeepTech. It is a part of the government’s overall push to integrate DeepTech and innovative solutions into an e-commerce heavy industry.
The EFS was formed in October 2019 as an all-encompassing program that combined multiple policy schemes under one policy. The newly centralized EFS was created to support startups and enterprises through “various stages of growth”. The scheme also engages in risk-sharing for loans of 50%, and up to 70% for younger companies. The useful aspect of these policies is how they create allowances specifically for the special circumstances of a startup. For instance, the Venture Debt Loans, designed to support the growth of “innovative enterprises” are suited for “high growth start-ups that do not have significant assets to be used as collateral under traditional bank lending”. This type of policy is a compelling example of how to create solutions to specifically cater to startups.
As mentioned earlier, Singapore’s greatest challenge is encouraging young talent to enter the startup scene. One of the ways it tackles this problem is encouraging entrepreneurs through state sponsored programs. The Global Ready Talent Programme again combined several previous schemes in one umbrella: the SME Talent Programme, Young Talent Programme, and Go Southeast Asia Award. The program specifically supports Singapore firms to send Singaporean talent abroad to key markets, such as to China and India, to take up job postings. Through this active engagement, the hope is that the entrepreneurial mindset is more frequently adopted.
Announced recently in August 2020, Startup SG Founder is a mentorship program and capital grant to “first-time entrepreneurs with innovative business ideas”. This policy is perhaps the most direct solution proposed by the Singaporean government to tackle what Michelle mentioned as a difficulty in getting young talent to pursue entrepreneurship in a culture that can view the risk negatively. The policy includes a three-month program called Venture Building Programme and is designed “to groom aspiring entrepreneurs with no business experience to build and scale innovative startups”.
Key areas to improve in Singapore’s entrepreneurial environment are their human capital, startup scene, and finance scores. The positive news is that, evident by these policies, the government is actively working on those areas. While the power and intention of the government has allowed Singapore to support its entrepreneurs in crucial, big state ways such as the infrastructure and macro political context, there may still be a need for a cultural shift towards entrepreneurship and cooperating more largely with regional powerhouses.