It used to be that entrepreneurs were those individuals in society who were crazy enough to start a completely new business in a market that didn’t exist for their products or services. Hailing mainly from the US, founders of Microsoft, Amazon, Google and Apple set the example of garage-tinkering that eventually became the basis for global tech giants. In time, the pool of brave geeks and non-geeks grew to what we today see as a global wave of entrepreneurship which until a few short years ago was not as prevalent in the Asian countries.
Traditionally more risk averse, individuals and society at large in countries like Japan and Korea were slow to see the potential of innovation. All that is changing with more and more startups hitting the headlines from these and other countries like Taiwan, the Philippines, and Indonesia.
In at least three Asian countries government leadership is transforming new business development and driving innovation, creating favourable conditions for entrepreneurs and startups to flourish and make a contribution to economic growth in the region.
In 2013 Korea’s President Park Guen-hye announced the Creative Economy plan, committing $489m to a crowdfunding system, establishing the Korea New Exchange (a stock exchange for startups) and institutional reforms like the creation of the Ministry of Science, ICT and Future Planning to coordinate policy implementation. The private sector is also getting involved. In partnership with the government it is setting up a $1bn financial vehicle to support startups and protect innovation that originates from SMEs.
The Korean government plans to invest 180 trillion won ($166 billion) this year to foster a startup ecosystem and new industries and markets with growth potential. The Creative Economy involves the establishment of 17 innovation centres throughout the country by the end of 2015. Eight of these centres are already up and running.
There is a carefully thought out plan behind the innovation centres that will see each one focussing on a different field and each one supported by both government and the private sector. In Yeoksam-dong, southern Seoul, the government is establishing a high-tech startup campus which it wants to develop as Seoul’s flagship Startup Valley that can rival Silicon Valley.
The centre in Seoul will focus on culture, led by CJ Group, and Gyeonggi will emphasize IT, led by KT. Incheon will concentrate on aerospace, backed by Hanjin Group, and Ulsan will be a centre for shipbuilding with support from Hyundai Heavy Industries. Gwangju will specialize in automobiles under the guidance of Hyundai Motor, and Busan will spotlight the retail industry led by Lotte. Doosan will help with a centre for machinery in South Gyeongsang and LG will support a biotechnology and energy centre in North Chungcheong.
At each innovation centre there will be officials from five state-run public finance institutions to offer government loans for startups.
The World Bank has consistently ranked Singapore as the best place to do business and it has also been ranked as Asia’s most entrepreneurial economy and the best country to nurture startups for expats. Startups increased from 27,000 in 2002 to more than 36,000 in 2009, generating more than S$166 billion in turnover. The Singapore government through its Ministry of Trade and Industry responsible for helping Singapore enterprises grow (SPRING) has spent vast sums of money and resources to develop and support startups in Singapore.
In 2014 the Infocomm Development Authority (IDA) announced a three-pronged strategy to support technology startups, consisting of a startup accelerator, an accreditation program to encourage government entities and large enterprises to adopt emerging technology, and a fabrication lab to give youths an opportunity to tinker with electronics and software.
The ICT regulator is also leading Singapore’s ambition to become the world’s first smart nation. As part of the initiative the Singapore government has introduced a number of initiatives, a smart nation operating system, an Internet of Things scheme targeted at homes, and pilot trials at a designated residential-business estate.
The initiative will use smart technologies to solve modern urban challenges like transportation, population density, healthcare and the needs of an aging population. And this is where startups and entrepreneurs come into their own.
While IDA is working with various tech industry companies to develop ideas for its Smart Nation Platform, startups are invited to give their input and ideas to the cause.
In the latest development, anyone with a good business idea is invited to help the city find solutions to the needs of the elderly. ACCESS Health International and NUS Enterprise have announced the Modern Aging program, which will provide a four month training course for entrepreneurs that wish to create new businesses to serve the needs of the elderly. To allow anyone with a good idea for a business to participate, the program is designed to accommodate the time schedules of students and those with fulltime jobs.
Already home to some of the world’s largest tech companies, China has identified innovation as the main economic growth engine. The Chinese government is putting its full financial weight behind startups and the promise of innovation to boost the economy. In January 2015, the State Council, China’s cabinet, announced it will allocate RMB 40 billion (US$6.5 billion) to set up a state venture capital fund to support new startups and foster emerging industries.
The announcement was followed in March by a State Council call for ministries and local governments to support innovation and startups, expressing the central government’s support for technology experts and university students to start their own businesses and putting space and funds at the disposal of students get their companies off the ground.
The express support from the State Council is likely to lead to a rise in the number of startups from China.