French IT consulting firm Capgemini launched its first Applied Innovation Exchange (AIE) in Southeast Asia in Singapore in February. The Applied Innovation Exchange is a program that helps entrepreneurs in the local ecosystem to explore and implement innovations in their own businesses.
This is Capgemini’s tenth AIE to date alongside exchanges in Europe and the US. The opening of the exchange also means that Singaporean entrepreneurs can enter the firm’s InnovatorsRace50 contest. The firm is looking at Southeast Asia as a key region for emerging businesses that could have a global impact.
According to research published late last year by Capgemini, Asia has overtaken Europe as a hot spot for innovation centres with the continent now accounting for 29% of such operations.
More and more money is pouring into Singaporean startups of late. Most recently, Facebook co-founder Eduardo Saverin invested as part of a $25 million round in health tech company CXA and Singaporean VC firm CapBridge launched a new $100 million fund to invest in pre-IPO companies.
Capgemini goes on to say Singapore is the most important startup hub in the region and an ideal launchpad for companies, whether it’s startups or big corporations, to test ideas.
“We see Singapore on the trade route of many industries. It’s not an outpost by any stretch of the imagination, it’s a critical location for the financial services industry, for the energy industry, for global trading in general,” explains Lanny Cohen, global CTO of Capgemini. “More and more of our clients are setting up or expanding operations in South East Asia. We needed to be there for that reason.”
“When the government speaks, the country moves”
Singapore’s small size – both in population and landmass – is a doubled sided coin. The advantage is that it can move fast, which is unique compared to its much larger neighbours like Malaysia or Indonesia. At the same time, the country’s small size can be an inhibitor because it’s physically limited in how much it can scale but this has forced the government to adapt its thinking.
Cohen points to the swift moving single layer government that is regularly putting new pro-business and pro-startup policies in place.
“When the government speaks, the country moves. It doesn’t require a massive amount of alignment, it’s not a federalist system where you have states and provinces that have to align with the agenda. I think it’s a country that can move very, very quickly.”
There are several recent examples of the government pushing its digital agenda. There is of course the Smart Nation program, an ambitious wide ranging scheme to digitise everything from healthcare and public transport to food production.
Special “digital-first” provisions were put in place in the most recent budget and in early February, the government’s Committee on the Future Economy issued a report on how the country will strategize for changing industries. This includes greater digital skills training, supports for SMEs, and building bridges with other economies internationally.
These international connections are both digital and physical. The committee discussed the possibility of a new high speed rail line between Singapore and Kuala Lumpur to boost economic activity between the two. There is already a huge amount of trade between the neighbours.
Meanwhile the country’s central bank is considering an easing of regulations on VC investments in order to allow money to flow a little easier into small businesses. “[The new rules] will allow new VC managers a faster time-to-market and reduce their ongoing compliance burden,” says Lee Boon Ngiap of the Monetary Authority of Singapore. The move is being welcomed by the city’s business community.
Bridging the gap between startups and corporations
Cohen points out that one of the flaws of startup culture and startup economies is the ‘all or nothing’ approach, referring to college graduates thinking “I’ve got to go join a startup, that’s the future”, he says, and maintaining that singular view.
“I think what Singapore continues to do is create that sense of balance, that there’s something to be learned from the big corporations, and understanding the world from those lenses and the stability of a large corporation versus just going into a startup and thinking that’s all you need to know.”
This cooperation between the two sides can have huge benefits for various sectors, both public and private.
The government has invested heavily in digitising public services for citizens through e-government initiatives.
In the private sector, financial services are a major part of Singapore’s economy and many institutions have made very forward-looking decisions, especially when it comes to fintech. The UOB bank is running the FinLab accelerator for local and international startups to develop their businesses in the city. Visa has opened its own fintech innovation centre while investment firm Marvelstone is opening its own fintech centre to rival that.
“They know digital’s coming,” says Cohen, “they know it’s important.”
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