Is Singapore the next silicon valley?
Singapore recently celebrated 50 years of being independent and several years of success stories and still counting.
Success has come to Singapore in big measures, but with tenacious and concerted efforts on part of the local government and its people.
It is worthwhile reminiscing why Singapore has been a natural choice for entrepreneurs, investors and the best professional talents in the world, the “trinity” of elements for an idea to be successful, in addition to a ripe market already at the verge of fruition. It took several years before the island-country could gain the image of being the most creditable jurisdiction and a preferred destination for incorporation of start-ups, but by all accounts its time has now come.
Singapore lacks natural resources. Almost everything on this island is manmade. Necessity truly has been a mother of all inventions here. Thus, it has become a natural hotbed for inventions. Environment is conducive for experimentation and innovation. And as P. Romer, an American economist has rightly put that once you have exhausted all resources of growth that is land, labour and capital you have no means to grow but to innovate and that has been the case with this country.
The remarkable research atmosphere over the years, has prepared a whole breed of very innovative and technologically sound generation of young minds. The ever-evolving education system of the country has even inculcated a culture for an appreciation of failure, which in turn has encouraged innovations.
The island-state relies heavily on other nations for even its most basic needs. The founding fathers of the nation foresaw the need of applying astute foreign policy strategies to ensure its viability as a sovereign state. This reflects in several of its policies including an overall attitude towards foreigners. Singapore under a well-thought scheme has given shelter to some of the brightest and most talented minds by making immigration and residency easy. With a welcoming local population, multi lingual support and English being widely spoken, low rates of taxation, better quality of life, strict rule of law, a higher average household income, people naturally gravitate towards it. And this has brought about a pool of professional talent in the country which has helped the country thrive.
It has a strict rule of law. Punishment for violating the law is stringent. No doubt rules are many but they are extremely straight forward and clearly laid out making it swift for a company to be incorporated within hours which is beyond imagination in any other country. It offers a very sophisticated and well responsive market for any technological innovative solution.
Singapore, through its various agencies and policies fosters an organic and sustainable growth. The country has cultivated a strong nurturing and mentoring culture through policies and grants which are easily accessible to the new ventures. Singapore does not have capital gain taxes and that makes it an attractive place to set up a business. Additionally, the Technology Incubation Scheme (TIS) which is an initiative under the National Framework for Innovation and Enterprise (NFIE) programme, has a provision whereby the National Research Foundation (NRF) Singapore could co-invest up to 85% of investment (up to S$500,000 per company) into a Singapore-based start-up, on recommendation from the Technology Incubator. This exhibits the commitment on the part of the country to boost commerce. It has great data center facilities and that offers a risk free environment to businesses. It is a cash rich country. The tax last year was at a record high of SGD 43.4 billion. All this has helped government devise impressive tax rebate policies for new businesses, propelling an all rounded growth of start-ups.
Singapore is home to several angel investors, HNIs, VCs and sophisticated investors who use Singapore as a base to invest into start-ups in Singapore and neighboring countries. They are key to redirecting the capital from where it saved to where it is needed, expediting innovation and economic growth.
It has a strategic geographical location overseeing world’s 3 fastest growing economies, India, China and Indonesia. The surrounding region constitutes almost 50% of the world population, providing the biggest market primed to be exploited by new ideas and businesses. Singapore acts as a conduit to reach out to these economies.
It is therefore not an overstatement to say that Singapore has all drivers of innovations present here and is rapidly becoming as the de-facto silicon valley of the East.