APAC 2017: A petri dish for new technologies
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APAC 2017: A petri dish for new technologies

Given its vast population, Asia Pacific is usually bustling with activity in the ICT sector but it’s not always equal across the region.

When it comes to funding for tech startups, Asia Pacific hasn’t been hurting but according to stats from CB Insights, the funding is skewed much more towards Asia than Australia and New Zealand for example. Startups from China, South Korea, and Singapore are all well-represented when it comes to startup funding.

There have been some very particular sectors that have flourished or experienced growth in 2016, which will be interesting to keep an eye on in 2017.

 

Fintech

Fintech is primed to be Asia’s calling card. At least that’s what the startups and various ecosystems want you to think. Everyone wants to make a big bet. In Singapore, Marvelstone, an investment group, is launching what it calls the world’s largest fintech development centre for both local and foreign startups to come to and develop their ideas. The country’s central bank meanwhile backed its first fintech startup, SoCash, in November.

But there are struggles. Japan’s fintech ecosystem, despite being placed in one of the world’s most active economies, has not taken off. Startups in the space believe that old-fashioned regulations are too stifling and holding back innovation.

In late 2015 we saw that Indonesia held great promise for fintech with its huge population and high mobile phone penetration but reports have shown little appetite or uptake for mobile banking services. According to the World Bank, the barriers to fintech services need to be lowered. Right now only a small section of the population – the well off – is taking advantage of mobile banking.

Fintech may have over-promised around the world. While we don’t have final figures for 2016 yet, stats show that the rate of investment in fintech has declined globally but grown slightly in Asia. That’s not across the board as investments in India, a potential game-changing market for the sector, have experienced a decline.

 

Cybersecurity

The constant problem that is cybersecurity is not unique to Asia but the entire continent has been subject to much scrutiny.

Two reports released in the last year claimed that Asian companies had some of the “worst” cybersecurity in the world and were particularly at risk. EMEA didn’t fare much better but it highlighted an ongoing problem for the entire region – Asia needs to get better at security.

The most infamous story this year came out of Bangladesh where hackers made off with $81 million in a cyber heist on the country’s central bank. It brought the whole problem into perspective.

Singapore made a seemingly-extreme move to limit access to the internet for its civil servants. Japan on the other hand is keeping its head in the game as the 2020 Olympics approach by collaborating with Israel to bolster its defences, especially with regards to critical infrastructure, ahead of the games. 

On the flipside, China has passed a deeply controversial new cybersecurity law that critics have called stifling in a country where internet freedom is already hugely curbed. It includes requirements like storing data within Chinese borders, which could suppress any foreign companies trying to operate in the country. It’s already notoriously difficult for western companies to gain a foothold in China and doesn’t look like it’s going to get any better soon.

Investing in cybersecurity cannot be understated. Research firm Analysys Mason published an APAC-centric report in November that laid out the importance of strong encryption for economies like Japan, South Korea, India, Australia, and New Zealand. It specifically examines how security best practices are vital for the development of five areas: e-commerce, IOT, corporate WANs, public cloud services, and business process outsourcing.

“Beyond the commercial opportunity for service providers, this huge value forms an important part of the perspective policy makers should take in considering their stance towards encryption,” says David Abecassis, partner at Analysys Mason.

“Governments and policy makers play an important role in promoting, using and, in some cases, regulating the use of strong encryption,” he says, adding that encryption needs to be at the forefront for the public and private sector alike.

 

Rebuilding

Some Asian countries are moving along much faster than others and many are trying to play catch up. For Nepal, it’s still trying to rebuild itself after the devastating earthquake, which also damaged a great deal of the country’s infrastructure.

In Myanmar, the country is gradually opening up to the rest of Asia and the world since electing its first democratic party. Startups are not exactly flourishing though with little activity going on inside an extremely nascent ecosystem.

Phandeeyar, an accelerator based in Yangon, is one of the first major efforts inside Myanmar to stimulate growth. Let’s see how it pans out in 2017 with its current cohort of startups.

 

Future of transport

Asia is another battleground for the taxi/ridesharing industry with Uber taking on local challengers.

Malaysia/Singapore company Grab now holds a significant market share across Southeast Asia in Malaysia, Singapore, Thailand, the Philippines, Vietnam, and Indonesia despite the ever-present threat of Uber, which just recently launched in Bangladesh. The ridesharing giant is facing its own turmoil, much like several other regions, by clashing with governments. It’s currently butting heads with Taiwan.

Others are seeing a much bigger picture than just ridesharing. In Singapore, a partnership between local authorities and Massachusetts startup NuTonomy and MIT is in the advanced stages of road testing for driverless cars. It’s part of an ambitious plan in Singapore to reduce the number of cars on the road to save vital land space in the densely populated city-state.

With these tests in the bag, NuTonomy is bringing the test cars home to Boston for further testing, proving that Asia may be a good petri dish for testing out new ideas.

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Jonathan Keane

Jonathan Keane is a freelance journalist, living in Ireland, covering business and technology

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