Entrepreneurship in Singapore: SPRING Singapore

ISSUE #59 – SPRING Singapore is an agency under the Ministry of Trade and Industry responsible for helping Singapore enterprises grow and building trust in Singapore products and services. As the enterprise development agency, SPRING works with partners to help enterprises in financing, capability and management development, technology and innovation, and access to markets.

 

Speaking to the start-up community at the launch of the JTC LaunchPad @ one-north in January 2015, Prime Minister Mr Lee Hsien Loong said, “You not only keep the economy productive and vibrant by providing jobs and opportunities. You create new markets and improve the lives of Singaporeans through innovative products and services. And most importantly, through your optimism and derring-do, you give our society a sense that anything is possible, as you seek to change the world for the better”.

The number of start-ups in high-tech sectors has almost doubled from about 2,800 in 2004 to 5,400 in 2014.

PROGRESS AT A GLANCE

Entrepreneurship is important for Singapore as a key driver of innovation and source of economic renewal. The entrepreneurship landscape here has shown strong progress over the years, including encouraging the growth of high-technology start-ups. The number of start-ups in high-tech or knowledge-intensive sectors has almost doubled from about 2,800 in 2004 to 5,400 in 2014.

Given its geographical position, business-friendly policies and steady support from the government, Singapore was ranked 10th best place globally for budding entrepreneurs in the Global Start-up Ecosystem Report 2015 by Compass.

Investor interest in the start-up scene is also growing. According to a report by Preqin Venture and the Singapore Venture Capitalist Association (SVCA), the number of venture capital deals announced in Singapore has risen year after year since 2007, with the highest increase of about 80% seen between 2012 and 2013.

The aggregate deal value reached $450 million in 2014. Singapore was seen to be leading in the ASEAN region in terms of venture capital financing.

Through government initiatives aimed at catalysing smart monies, co-investment schemes by SPRING Singapore (SPRING) and the National Research Foundation have seen almost S$180 million committed to helping over 300 start-ups in sectors such as information and communications technology (ICT) hardware, clean technology, medical technology and more. Along with tax incentives to encourage private investors to consider start-ups in Singapore as an attractive investment class, other forms of financial support made available also aim to help high potential start-ups and SMEs grow.

credit this photo to JTC Corporation

 

BUILDING A VIBRANT START-UP ECOSYSTEM

Today’s vibrant start-up ecosystem is a culmination of putting in place the right mix of resources – both the hardware and the software – and receiving strong collaboration from multiple partners.

These growing partnerships play a significant role in supporting the burgeoning of home-grown innovative ideas.

FINANCING

In the area of financing, there is an increasing number of sources of capital from public and private players to support start-ups in different stages of their development.

In addition to grants, co-investments, tax incentives and loan programmes, financing options like crowdfunding offer new opportunities to start-ups and investors, changing the way entrepreneurs seed ideas and seek funds. Through crowdfunding, entrepreneurs can reach out to investors and partners beyond their own social networks; it has been increasingly used by start-ups globally to get their projects off the ground. The local crowdfunding scene has seen growing interest in the last few years and has reportedly raised tens of millions of dollars for local ventures.

It is also critical to ensure that promising companies have access to the capital they need to grow. As part of Singapore Budget 2015, the government, through SPRING, will top up S$75million for co-investment into technology-based startups, and partner financial institutions to pilot venture debt as an alternative source of financing for growing enterprises.

SPRING co-shares 50% of the loan default risk with appointed financial institutions for such loans and aims to catalyse about 100 venture debt loans totaling about S$500 million in the two-year pilot.

Collaboration is instrumental to creating win-win outcomes and encourage co-innovation.

INFRASTRUCTURE FOR INNOVATION AND PARTNERSHIPS

In terms of physical infrastructure, startups in Singapore now have a place to call home. Spearheaded by SPRING and JTC Corporation, the JTC LaunchPad @ one-north, an integrated development along Ayer Rajah Crescent, can house up to 500 start-ups and 35 incubators.

As the start-up community expands, the LaunchPad will have three more blocks added to accommodate 50% more startups, creating a community primed for interaction and collaboration.

As the local enterprise development agency, SPRING, together with other government agencies, has also looked at improving existing infrastructure to better support start-ups. Through the setup of technology transfer offices and centres of innovations in tertiary institutions and research institutes, more start-ups can gain access and tap public sector R&D capabilities such as laboratory facilities, technology providers and consultants to test and commercialise their technology projects. Over the last fi ve years, about 200 intellectual property translation projects were supported.

Partnering incubators with start-ups is gaining increasing momentum as it offers critical resources, such as business and technical mentors, advice in growth strategies and access to local and overseas networks of clients and investors. With their support, start-ups can increase their chances of success remarkably. There are about 40 government-supported incubators in Singapore. Some are housed at LaunchPad such as Biofactory, Small World Group and NUS Enterprise. Others are located elsewhere, like the OneMaker Group located at the Prototyping Lab @ National Design Centre, which focuses on building a community of makers in the manufacturing and hardware space.

Some have even expanded overseas to give Singapore start-ups a leg-up when exploring opportunities in other markets.

Infocomm Investments Pte Ltd (IIPL), NUS Enterprise and SingTel Innov8 jointly set up ‘Block 71 San Francisco’, a space to foster ties between start-up ecosystems in Singapore and the United States.

These encouraging developments in financing, infrastructure and innovation, along with growing private-public partnerships, reflect the collective spirit of the different players. With such a vibrant start-up cluster, we hope to yield more successes from Singapore in the future.

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NURTURING EMERGING SECTORS

While the entrepreneurship landscape has developed significantly in the last 10 years, some sectors, especially in medical technology, clean technology, and advanced manufacturing and engineering, still require support. These sectors typically require a longer runway for development and commercialisation.

By partnering experienced investors and incubators, and collaborating for test-bedding opportunities, Singapore hopes to nurture more ground-breaking innovations and seed a new generation of technology-based enterprises.

In June 2015, SPRING announced the call for proposal to appoint new accelerator partners to groom start-ups through a co-investment model in some of these emerging sectors, which include subsectors such as additive manufacturing, robotics, biomaterials, nanotechnology and more. With $75 million set aside for this, SPRING expects to co-invest in about 40 start-ups with appointed accelerators in the next few years.

There have also been interesting developments in areas such as robotics and the IoT. For instance, with an increasing demand for innovative manpower-lean technologies and the push towards greater productivity, there is potential for growth in the local robotics landscape. SPRING supports local SMEs across various sectors to adopt automated solutions, and encourages system integrators to design new industrial robotics applications to meet industry demands. Recently, Universal Robots (UR), a global developer and manufacturer of flexible and user-friendly industrial robots, partnered local system integrator Skymech Automation & Engineering (SKYMECH), to create standard scalable solutions for their end-customers.

CREATING MORE OPPORTUNITIES FOR COLLABORATION

Collaboration is instrumental to creating win-win outcomes and encouraging co-innovation. The Partnerships for Capability

Transformation (PACT) programme, co-administered by Singapore Economic Development Board (EDB) and SPRING, aims to spur greater collaboration between large and small companies and across sectors. Since PACT’s inception, SPRING has supported almost 100 projects, benefitting 640 SMEs and start-ups.

For example, Intel jointly launched an initiative to support start-ups and SMEs interested in developing products and services in the internet of things (IoT) and wearables. The line-up of companies included technology company T-Ware, IoT company NexTan, green and health-tech specialists Newton Circus Connected Health, and energy software and hardware companies Intraix and Gridcomm.

The Centre of Innovation for Electronics (COI-E) at Nanyang Polytechnic aims to provide test-bedding and collaborative opportunities for companies including smaller firms. With the launch of the COI-E’s IoT Open Innovation Community in December 2015, small companies can connect with industry players and catalysts, tap on their expertise and gain market opportunities. Its existing 100 members include companies such as Ascent Solutions, 1Rwave, NexTan, CitiCall, STMicroelectronics, MediaTek and NXP Semiconductors.

With the transformation of Action Community for Entrepreneurship into a private-led entity, ACE Ltd continues to be the voice for entrepreneurs and connects them to key resources such as shared services, mentorship and the larger business community, locally and overseas.

According to Mr Joshua Soh, Executive Director for ACE, “The response from the entrepreneurship community has been extremely encouraging. Moving forward, we are working to help startups to establish their businesses on the right foot, and also to match them with potential clients or partners”.

The next phase of entrepreneurship promises to be an exciting but competitive one.

Spring

 

THE NEXT PHASE

The next phase of entrepreneurship promises to be an exciting but competitive one. Mr Edwin Chow, Group Director

(Industry & Enterprise) of SPRING Singapore, expects more inventive and technology-centric start-ups to emerge.

He says, “Today, we have an open ecosystem with multiple accessible avenues of support to entrepreneurs. This is crucial to facilitate the growth of the next wave of young innovative and high-tech companies. Singapore has always been well-positioned as the gateway city to Asia and riding on the good infrastructure we have built, we hope to see more technology start-ups grow and soar from Singapore to the region”.

 

Article by SPRING Singapore

 

Article published in the FOCUS Magazine “The Enterprising Spirit” – Issue #1 2016

 


PHOTOS (top to bottom):

  • JTC LaunchPad @ one-north – Photo courtesy of JTC Corporation
  • Guests visiting the Prototyping Lab at the National Design Centre launched by SPRING Singapore and DesignSingapore Council
  • Launch of the IoT Open Innovation Community at the Enterprise X-Change Forum organised by the Nanyang Polytechnic’s Centre of Innovation for Electronics