We need to ensure the sustainability and growth of successful startups as they play a crucial role in driving a nation's economic growth - helping to adapt to new challenges and keeping pace with the ever-changing digital landscape.
The vital role of startups in economic prosperity
- Disruption and technological growth
Startup ambition is imperative to meet existing gaps in industry.
The latest industry to be infiltrated by entrepreneurs is the education sector in Singapore - a lucrative market as Singaporean society places academia as top priority . Disrupted by automated homework assistance tools and trainer seach platforms, education technology (EdTech) is optimising traditional paradigms of learning.
A quick, low-cost channel that connects learners and trainers across a wide range of subjects instantaneously, Tueetor is Singapore's lastest Edtech startup to see immense success1. Without the need to go through tuition centres, the app is hosting over 2000 trainers and covering almost 500 subjects, since its launch in September last year 2. The credibility of trainers listed on the app are dependent on ratings and reviews; a similar structure to Uber and Airbnb.
Founder Tan Han Sing told Channel NewsAsia that his goal was to make the search for a trainer ‘as easy as booking a hotel on TripAdvisor’ 1.
The Singapore government's strong force behind startups has allowed talents like Han Sing to become recognised. Not only does the 2017 budget place immense emphasis on providing more aid for small and medium-sized enterprises (SMEs) in going digital, more funding and cultivating networks to international markets and innovation hubs, Singapore's geographical location positions the small country as a convenient access point for striving technological markets in the area 3.
Singapore's young emerging talents are establishing themselves as capable startups at the forefront of revolutionary technology, taking the number 12 spot in Startup Genome's Global Startup Ecosystem Report for 2017 4. Silicon Valley unquestionably came in as the number 1 rank overall, but Singapore had surpassed the leader in the Talent factor12.
Grab, with its headquarters in Singapore, is Uber's largest competitor and has had over 3 million downloads since its launch in 2012 5. Google has also announced plans to build an engineering team based in Singapore that will focus on developing products for Southeast Asia 6. These results validate the country's strategies to become globally significant.
The Singapore government has made arrangements for approximately S$20 million to be set aside for the STARTUP SG initiative to support first-time entrepreneurs 7.
As young, fresh talent receive more and more funding from the government each year, Singapore is looking increasingly attractive as startup location for foreign talent.
Australia is not too far behind in the ranks in Startup Genome’s report, with Sydney coming in at number 17 (home to 1300 - 2100 start ups). Dominating the Australian startup scene at the moment is Canva. Over the last year, the online graphic design platform gained 6 million users, and doubled its valuation to reach $345 million in 2016 4. Sydney was given a high rank in Global connectedness, which means they have the knowledge and ability to extend their global reach, but its low Market Reach index indicates their products aren’t appealing to foreign consumers4.
Melbourne has been named as the world’s most liveable city for 6 years now yet many of the local startups are finding it hard to sustain under its high standard of living - a reason that initiated the government to introduce a $1.1 billion innovation package that includes tax offsets for startup investors and capital gains tax exemptions4. With the intention to turn Melbourne into a 'startup powerhouse', the government is changing its policies to 'be as agile as the startup businesses it seeks to inspire' 8.
Kogan and Envato are currently enjoying great success in the digital space. Those who share an entrepreneurial mind have opportunities to interact and connect at regular events like FinTech Melbourne and Melbourne Silicon Beach4. These activities demonstrate the strength of local connectedness, and concurrently, a steady climb towards global connectedness. Melbourne isn’t quite in the top 20 ranks yet. However, the report showed strong Early-Stage Funding, Global Connectedness scores, and high quality engineering - which indicates that Melbourne could possibly hold a spot in the top 20 next year4.
Contemporary startups are grateful for tech tools - the 'springboards' that have helped them overcome many of the most complex challenges with global expansion - from managing offshore teams to accepting international payments9. One example is Startup Stack - facilitating and accelerating the global reach of Australian startups by automating the essential business basics.
However, it isn't merely about turning local to global but also remaining open to up-and-coming global talent. StartupAUS's report showed that 61% of Australia’s most successful startups were founded by immigrants or children of immigrants 10. Foreign entrepreneurs bring a novel kind of dynamism to local startup scenes; integrating cross-culture perceptions and different skill sets.
- More jobs
Many countries are racing ahead of Australia in the tech industry, thus we need to import these talents and experiences in order to grasp new ideas and knowledge. Moreover, foreign startups create more jobs.
The Australian economy saw 1.6 million new jobs between 2003 and 2014 thanks to startup talent 9.
Paul Bassat, Board member of Innovation & Science Australia and non-executive director of Wesfarmers asserts that ‘globally, innovative startups are creating the sort of jobs that Australia needs in order to prosper; they are highly productive, high paying and offer rewarding careers.' 10
As mechanical jobs gradually disappear, there is a greater need to create more high value jobs. The value that startups bring to employment and Australia's progress in the tech space, creates more opportunities for future generations.
StartupAUS CEO, Alex McCauley, got it right when he said that 'the government has done a lot to build expectations that it is committed to making Australia once of the best countries in the work for innovators... it still has a lot to do to deliver on that commitment'. 11
While the recent Australian budget welcomes some excellent initiatives for FinTech (such as removing the double taxation of digital currency, extending crowdsourced equity funding and open data in banking), Australia still needs to provide greater support to startups in order to secure economic growth and compete with advanced nations like Singapore and the US.
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1Retrieved from Tang, S. K. (2017). Tech Start-ups Cram Into Singapore’s Education Sector. www.channelnewsasia.com.
3Retrieved from Tegos, M. (2017). Singapore’s 2017 Budget Focuses on More Funding and International Expansion for Startups. www.techinasia.com.
4Startup Genome. (2017). Global Startup Ecosystem Report 2017.
5Retrieved from Novac, J. (2017). 4 Critical Lessons You Need To Learn From Grab’s Success. tribeinsider.com.
6Retrieved from Tham, I. (2016). Google on Hiring Drive to Set Up Singapore Hub. www.straitstimes.com.
7Retrieved from Wong, W. (2017). S$20m to be Set Aside for First-time Entrepreneurs. channelnewsasia.com.
8Retrieved from Martin, P. (2015). Free to Fail in Malcolm Turnbull's New $1.1 billion Innovation Plan. www.smh.com.au.
9Retrieved from Anthill Magazine. (2017). Aussie Startups More Quickly Becoming Global Scale-ups Thanks to This Startup Stack. anthillonline.com.
10StartupAUS. (2016). Crossroads Report.
11Retrieved from Simpson, C. (2017). From 2017, Bitcoin And Other Digital Currency Will No Longer Be Taxed Twice In Australia. www.gizmodo.com.au.
12Retrieved from Williams, A. (2017). Singapore No. 1 in World for start-up Talent: Report. www.straitstimes.com.
McDuling, J. (2017). Australia, We Need to Talk About Start-ups and Failure. www.afr.com.