Singapore has overcome vast odds to ignite an entrepreneurial ecosystem and high-tech industries from the ground up in just a few decades.
The Little Red Dot’s skilled workforce, the capacity for long-term planning, dynamic government support, and international business environment have been critical drivers to shaping both its modern economy and a regional fundamental science powerhouse: NUS and NTU both maintain a tight grip on the top spots in academic global rankings.
But like so many competing nations, Singapore faces difficulties in reaching a critical size in frontier tech and supports its handful of early-stage gems to cross the maturation stage and the valley of death.
Characterised by a small home market, an early maturity with regards to deep science-driven venturing, and a geographic and cultural distance from top frontier tech-hubs such as San Francisco, Boston, or Tel Aviv, Singapore makes great efforts to attract the talent, technologies, and capital necessary to complete this emerging ecosystem.
A limited range of financial and venture-building instruments needed to attract a diverse investor base, experienced entrepreneurs, and top operating partners adds to the picture.
Global research institutions spend billions every year exploring, developing, and testing new technologies with the hope of bringing them to market. However, while basic science provides numerous avenues for promising ideas and expertise in fields like sustainability or healthcare, a range of structural, intellectual, and financial barriers make their maturation complex and broadly painful for founders.
Those include a scarcity of funding and talent compared with consumer tech, misaligned incentives, and risk appetites among researchers and investors alike. Consequently, many ventures flounder once they reach the maturation phase before market players — investors and corporations — are willing to engage.
Let’s face it. Frontier tech discoveries typically face 100:1 odds of making it through the first commercialisation steps. Expensive product maturation efforts, investor pressure, and protracted time frames have made traditional investors risk-averse.
This leaves vast funding gaps at an early stage that create both innovation and economic challenges. The problem is acute all over South-East Asia but resonates singularly in Singapore, where the ambitions are big, science is world-class, and frontier tech R&D is deliberately being nurtured so that its outcomes can be pillars of the future national economy.
To counteract this structural complexity and move to the next level, the frontier tech sector in Singapore needs to produce more promising research ventures that are geared towards commercialisation and international growth.
Also Read: Unleashing Singapore’s smart city potential: A gateway to limitless opportunities
In particular, recognising that the country will always remain a small and remote global platform with regard to the significant markets new frontier tech startups will likely target, a combination of targeted efforts could leverage the nation’s strengths and address some of its shortcomings.
Boosting the attractiveness for researchers and builders alike
There is no question that frontier tech maturation and productisation should be driven by specialists, with the aid of seasoned entrepreneurs and operating partners. But the innovation-to-productisation cycle only partly overlaps the process of venture creation.
While having a team of scientists leading the go-to-market is somehow prevalent in Singapore, academics often lack the experience and incentives required to competitively translate their work into commercial products.
Yes, they can learn. But the learning curve is generally steep, and it often has an irremediable impact on the productivity — and, down the road, the market timing and competitiveness — of the spinoff.
Organising execution ‘relay races’ and dynamically building the right team at the right time are paramount. Not all academics are made to be science entrepreneurs, but most can make substantial contributions to emerging startups. There is always a catch for the academics ready to cross the entrepreneurship Rubicon.
Let aside the fact that publishing academic research is still considered the ‘bread and butter’ of academic life —technology maturation is a demanding activity and hardly compatible — basic science in Singapore just provides more stability and funding visibility.
Even if the country had more frontier tech startups today, the reality is that the public sector would always be a black hole for talented research professionals, be they Singaporean or foreigners. To counterbalance this effect, official joint positions between universities and startups or venture builders can be tested.
In addition, introducing innovative incentive mechanisms that factor spinoff experiences in—e.g., new KPIs for academics seeking tenure — can entice more candidates to contribute to the ecosystem.
Second, the country faces difficulties attracting experienced frontier tech entrepreneurs, venture builders, and operating partners. Unfortunately, even highly generous expatriate packages to motivate the move may not convince this crowd. They are primarily incentivised to live and work in cities like San Francisco, Boston, or Tel Aviv, associated with massive work and learning opportunities, which in turn contribute to their personal branding, experience, and network building.
By contrast, Singapore’s small domestic market structurally offers fewer opportunities to build a world-class network. To counteract this, new immigration schemes targeting seasoned frontier tech entrepreneurs and operating partners would be a great addendum to Singapore’s gamut of immigration tools.
For example, applicants demonstrating a solid track record could be granted a 3-year work visa— yes, you need visibility to build frontier tech— associated with an ‘entrepreneurial grant’, i.e., the possibility to be financially supported to incubate Singapore-based projects in their field.
This status could even open the door to bringing additional talents to work on science-driven products (i.e., opportunistic pooling) and an expressway to raise early-stage capital. The program can be designed to incentivise this frontier tech AAA crowd to ignite and expand startups from Singapore and incorporate the associated expertise into the local entrepreneurial ecosystem.
Unlocking the private funding market
Frontier tech fundraising in Singapore can be challenging due to the limited types of financial instruments available to the investor community and the few domestic options open to promising startups.
Although the government has long introduced generous tax schemes to incentivise private R&D, spending has been relatively low over the last decade, broadly amounting to 25–45 per cent of gross frontier tech spending (note: it varies following the industry).
While these proactive policies are commendable and a blessing for many innovation projects, we tend to notice that good ideas failing to tick government checklists have nowhere else to turn. Also, researchers, entrepreneurs, and corporate executives alike point out that application processes for public grants have many restrictions in terms of fund allocation, and excessive reporting, and usually take months to complete.
Also Read: How Singapore is leveraging technology to become a sustainable fashion hub
Those frictions can be eased by working hand-in-hand with domestic grant administrators and technology transfer offices to simplify the playbooks used today to allocate and track the available public funding.
For frontier tech private equity to be successful in South-East Asia, a new investor base is poised to emerge with a strong understanding of the region’s current strengths and weaknesses and the journey ahead.
To create this scene, Singapore needs to develop new and creative vehicles to attract capital.
Establishing a series of early-stage hybrid vehicles (e.g., venture builders) and frontier tech venture capital firms is one of the best ways to do so. Making domestic funding available early in the process would reduce the number of startups seeking overseas financing, with the underlying risk of flipping the company abroad in the first months or years.
While some public funding contributions are expected to be necessary to make a dent —especially for venture building that concentrates more operational risks — it is critical that those funds end up primarily financed by the private sector over time so that they can be truly competitive with each other.
While frontier tech startups in Singapore are still seen as not producing sufficient financial returns for their level of risk or suffer from a lack of information or local track record given the novelty of their markets, the country may want to support the emergence of new vehicles with first-loss capital to attract large, institutional investors and corporations.
The new vehicles should not be divided by sector but rather by funding avenues and investment philosophies. In particular, while the country is home to numerous family offices and philanthropic capital, the lack of flexible investment vehicles has sidelined this market segment.
There is a massive opportunity to bring them in.
Encouraging more international collaboration and networking
In the frontier tech fields, Singapore would benefit from more exchanges with the US, Europe, Israel, and China. They host the global capitals for frontier tech research, development, and private equity. Establishing business landing pads in top-tier hubs like San Francisco, Boston, or Shenzhen would allow researchers and entrepreneurs to network with and market their technologies to investors and corporations with the support of the Singapore government.
This is key and goes way further than networking and soft landing. For a frontier tech entrepreneur, focusing — for example — on the US market requires a team with a deep understanding of the local regulations, the product development procedures, and, more generally, the industry’s current state.
Most early-stage startups cannot afford to hire or develop these expensive resources by themselves, so there is a need for mechanisms to share the costs. Ideally, the venture builders and operating partners that Singapore can attract should support these efforts: they are expected to be familiar with these foreign markets and have strong networks there. They would bring unique perspectives to the conversation.
As collaboration becomes even more critical to modern innovation, a standardised frontier tech talent development and exchanges system would foster greater international cooperation, socialise science entrepreneurs into multi-disciplinary research and productisation, and eventually attract more talent and funding in Singapore.
Thus, the establishment of publicly subsidised talent transfer and support programs to complement the work done by the private sector would be a great addendum.
Also Read: How Singapore’s entrepreneur network can sow the seeds for tomorrow’s brightest stars
As an illustration, the French public innovation agency bpifrance recently officialised an open platform supporting frontier tech CEOs in the constitution of their advisory boards, with 1,500 seasoned entrepreneurs and executives already registered to support early-stage startups. Singapore can efficiently orchestrate a similar scheme; government subsidies may be necessary at the start to cover the contributions of the first generation of advisors and accelerate.
In the case of frontier tech, scientists, engineers, entrepreneurs, and business and finance professionals all provide different but equally necessary spheres of expertise. Any future ecosystem success hinges on its ability to make the most of these collaborations.
From incentivising academics, supporting the emergence of new investment vehicles, and stimulating international exchanges to attract seasoned entrepreneurs and operating partners, Singapore is to leverage new frontier tech policies and devote significant efforts to broaden the local pool of dynamic entrepreneurial human capital over the coming years.
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Frontier tech fundraising in Singapore can be challenging due to the limited types of financial instruments available to the investor community and the few domestic options open to promising startups.
Although the government has long introduced generous tax schemes to incentivise private R&D, spending has been relatively low over the last decade, broadly amounting to 25–45 per cent of gross frontier tech spending (note: it varies following the industry).
While these proactive policies are commendable and a blessing for many innovation projects, we tend to notice that good ideas failing to tick government checklists have nowhere else to turn. Also, researchers, entrepreneurs, and corporate executives alike point out that application processes for public grants have many restrictions in terms of fund allocation, and excessive reporting, and usually take months to complete.
Also Read: How Singapore is leveraging technology to become a sustainable fashion hub
Those frictions can be eased by working hand-in-hand with domestic grant administrators and technology transfer offices to simplify the playbooks used today to allocate and track the available public funding.
For frontier tech private equity to be successful in South-East Asia, a new investor base is poised to emerge with a strong understanding of the region’s current strengths and weaknesses and the journey ahead.
To create this scene, Singapore needs to develop new and creative vehicles to attract capital.
Establishing a series of early-stage hybrid vehicles (e.g., venture builders) and frontier tech venture capital firms is one of the best ways to do so. Making domestic funding available early in the process would reduce the number of startups seeking overseas financing, with the underlying risk of flipping the company abroad in the first months or years.
While some public funding contributions are expected to be necessary to make a dent —especially for venture building that concentrates more operational risks — it is critical that those funds end up primarily financed by the private sector over time so that they can be truly competitive with each other.
While frontier tech startups in Singapore are still seen as not producing sufficient financial returns for their level of risk or suffer from a lack of information or local track record given the novelty of their markets, the country may want to support the emergence of new vehicles with first-loss capital to attract large, institutional investors and corporations.
The new vehicles should not be divided by sector but rather by funding avenues and investment philosophies. In particular, while the country is home to numerous family offices and philanthropic capital, the lack of flexible investment vehicles has sidelined this market segment.
There is a massive opportunity to bring them in.
Encouraging more international collaboration and networking
In the frontier tech fields, Singapore would benefit from more exchanges with the US, Europe, Israel, and China. They host the global capitals for frontier tech research, development, and private equity. Establishing business landing pads in top-tier hubs like San Francisco, Boston, or Shenzhen would allow researchers and entrepreneurs to network with and market their technologies to investors and corporations with the support of the Singapore government.
This is key and goes way further than networking and soft landing. For a frontier tech entrepreneur, focusing — for example — on the US market requires a team with a deep understanding of the local regulations, the product development procedures, and, more generally, the industry’s current state.
Most early-stage startups cannot afford to hire or develop these expensive resources by themselves, so there is a need for mechanisms to share the costs. Ideally, the venture builders and operating partners that Singapore can attract should support these efforts: they are expected to be familiar with these foreign markets and have strong networks there. They would bring unique perspectives to the conversation.
As collaboration becomes even more critical to modern innovation, a standardised frontier tech talent development and exchanges system would foster greater international cooperation, socialise science entrepreneurs into multi-disciplinary research and productisation, and eventually attract more talent and funding in Singapore.
Thus, the establishment of publicly subsidised talent transfer and support programs to complement the work done by the private sector would be a great addendum.
Also Read: How Singapore’s entrepreneur network can sow the seeds for tomorrow’s brightest stars
As an illustration, the French public innovation agency bpifrance recently officialised an open platform supporting frontier tech CEOs in the constitution of their advisory boards, with 1,500 seasoned entrepreneurs and executives already registered to support early-stage startups. Singapore can efficiently orchestrate a similar scheme; government subsidies may be necessary at the start to cover the contributions of the first generation of advisors and accelerate.
In the case of frontier tech, scientists, engineers, entrepreneurs, and business and finance professionals all provide different but equally necessary spheres of expertise. Any future ecosystem success hinges on its ability to make the most of these collaborations.
From incentivising academics, supporting the emergence of new investment vehicles, and stimulating international exchanges to attract seasoned entrepreneurs and operating partners, Singapore is to leverage new frontier tech policies and devote significant efforts to broaden the local pool of dynamic entrepreneurial human capital over the coming years.
–
Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic
Join our e27 Telegram group, FB community, or like the e27 Facebook page
Image credit: Canva Pro
The post How to shape Singapore’s attractiveness in deep and frontier tech appeared first on e27.