Estonia and Singapore share striking similarities as relatively small nations with vibrant tech and startup scenes. Anchored in common practical values and perceptions, both countries excel in the digital economy, boasting robust startup ecosystems and a focus on cybersecurity.
Strong government support and well-established networks
The key drivers behind their appeal lie in strong government support and well-established networks of entrepreneurs and investors. Recently established, the Estonian Business Hub in Singapore (part of the Embassy of Estonia in Singapore) serves as a tangible representation of Estonia’s identity in Singapore.
This hub also serves as an optimal platform for Estonian companies to forge business relationships, host events, and showcase both their businesses and Estonia on the global stage; most recently, the Hub arranged a trade mission for a number of Estonian startups, who were able to explore business opportunities in Singapore.
One of these startups was ÄIO — a winner of the Enterprise Singapore partner award at Slingshot 2023, a company on a mission to change the way we produce fats and oils. ÄIO recognises the full worth of microbial oils to deliver tailored solutions for industries such as food, feed and cosmetics.
This op-ed will delve into the potential of Estonia and Singapore to play pivotal roles in shaping regulations and standards for emerging markets in novel foods, processes, and legislation. The ensuing discussion will explore the implications of early-stage investments and founders’ choices of ecosystems.
Investor-friendly ecosystems and growth mindsets
Estonia is one of the EU’s tiger leap countries, with the fastest economic growth during the past two decades. 25-year CAGR in Estonia is 3.3 per cent. In Singapore, the growth rate has been even higher, with a CAGR of 4.6 per cent.
This accelerated growth can be attributed, at least in part, to our shared open business culture and a resolute commitment to goal achievement. A common growth mindset permeates both countries, evident in their investor-friendly ecosystems that foster startup development.
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While we share numerous similarities, each nation possesses unique attributes. Estonia, despite being a small country, boasts significant hard resource assets, including vast woodlands producing 10 million cubic meters of timber annually and sequestering 160 million tons of carbon dioxide.
Abundant freshwater reserves, amounting to 1.3 million hectares, and various minerals, including Europe’s largest phosphorus reserve, underscore Estonia’s rich resources. In contrast, Singapore, with its greater experience, particularly excels in industry and fintech.
Beyond academic institutions, Singapore has committed experts and resources to fields like Novel Food, Biotechnology, and Smart Cities. These deep tech sectors demand specific expertise and resources throughout the value chain.
Singapore has made substantial investments in developing a relevant deep tech entrepreneurial ecosystem. Currently, Estonia is just starting to invest in its local Contract Research Organizations to support field-specific deeptech acceleration, and we have much to learn from Singapore.
The emergence of deep tech
The Singaporean startup ecosystem has forged alliances with universities, local and global investment partners, corporates, and policymakers. Its transparent and well-connected nature contrasts with the more segmented nature of the Estonian startup ecosystem, which is highly field-specific.
However, the emergence of the deep tech era necessitates the alignment of stakeholders in a shared time-space-information continuum — an area where Estonia can glean valuable insights from Singapore’s experience.
At the national level, state offices responsible for food safety have the authority to issue specific acceptances or certificates for novel foods. To initiate this process, the country must first develop and gain government approval for legislation and standards at the national level, and in some cases, parliamentary approval may also be required.
Subsequently, local regulatory authorities handle the processing of requests. In many instances, regional offices may need to augment their capabilities, as they may lack the expertise for independent safety verification and may not have established regulations or programs for novel food processing.
Smaller countries with modern and rapidly developing technology scenes, like Singapore and Estonia, might have a clear advantage over larger and much slower-to-respond industrial countries. Despite the challenges, the food safety framework within the European Union (EU) holds a strategic position within the broader EU market, and EU & EFSA rules apply to all EU countries.
The nation that takes the lead in legislating, regulating, and processing novel foods often becomes a benchmark for the entire EUR 20 trillion (US$ 215 million) economic space (i.e., the Netherlands’ code of practice for tasting cultivated meat).
An additional advantage of swift national-level legislation is its potential to attract startups and investors, fostering trials within that country. This, in turn, leads to rapidly increased investments, capital for scaling up production, and heightened interest from established corporate industries.
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Consequently, both Estonia and Singapore stand to benefit from similar opportunities. Estonia, by securing a pioneering position, could become a leader within the entire EUR 20 trillion (US$ 215 million) EU economy. Similarly, Singapore could position itself as a frontrunner catering to the rapidly growing demand in Asia.
ÄIO: A case study
Following a recent trade visit to Singapore, arranged by The Estonian Business Hub in Singapore, the ÄIO team have a fresh feeling of possibility and a new perspective, taking into consideration the potential of doing business on a global scale.
Now, ÄIO is exploring local partners to explore the possibility of entering the Singaporean market. ÄIO produces fats and oils from locally produced low-value industrial side streams. These alternative oils and fats are substitutes for palm oil, used in nearly half of the products we consume, including ice cream, lipstick and soap, to name a few.
In the novel food domain, alternative fats and oils could be used to enhance the taste and texture of alternative meat products, for example. But it could also be used as an ingredient to improve the quality and performance of cosmetic products due to the high concentration of antioxidants as well as carotenoids that give a smooth red pigment.
Today, ÄIO are running multiple pilots with collaborators in the cosmetics, dairy and forestry industries and is excited about the results to help the companies achieve a more circular approach to their productions by valorising their side streams. They value the transparency and welcoming nature of the startup community in Singapore.
In order to market products, ÄIO must gain certifications specific to each new market. Singapore has been recognised as one of the countries that has a quick consultative procedure supporting entrepreneurs, as opposed to a more bureaucratic and restricted procedure in the EU. This is the reason many of the innovative companies in the food sector eventually find their way to Singapore.
For a startup, it is of utmost importance to have a supportive infrastructure, most importantly the people that are deeply connected within the relevant ecosystems to support and further the business.
We are delighted to have a direct gateway to Singapore, thanks to Enterprise Singapore and the Estonian Business Hub in Singapore (part of the Embassy of Estonia in Singapore), and we look forward to witnessing — and playing a role in — the continued strengthening of the relations between these two nations.
This article has been co-authored by Rainis Venta Ph.D., Technology Transfer Officer of Tallinn University of Technology.
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