Analyzing Singapore's Startup Ecosystem: A Comprehensive Report

This report offers a thorough analysis of Singapore's startup ecosystem. It begins with an executive summary and table of contents, then delves into the introduction, defining startups and their role in economic development. The report examines Singapore's startup ecosystem, its history, and the application of Babson's framework, which includes policy, finance, culture, support, human capital, and markets. It discusses the effectiveness of government schemes and plans, highlighting Singapore's favorable startup laws and tax benefits. The report also provides recommendations, comparing Singapore to other countries like Hong Kong and Australia, and suggests ways to further enhance the ecosystem. The report concludes by emphasizing Singapore's potential and government's support for entrepreneurs, referencing key data points on funding rounds and the country's attractiveness for women entrepreneurs. References are included at the end.

Running head: ANALYZING SINGAPORE’S STARTUP ECOSYSTEM
Analyzing Singapore’s Startup System
Name of the University
Name of the Student
Author note

1ANALYZING SINGAPORE’S STARTUP ECOSYSTEM
Executive Summary
The chief purpose of the report is to analyze the startup scenario of Singapore. It thoroughly
discusses the several rules and norms related to the startup ecosystem of Singapore. Startups are
increasingly becoming a rage amongst newcomers who look forward to start a career. Singapore
is a fast growing economy and an entrepreneurial hub with its easy laws. Many elements
contribute to the status of the startup ecosystem in Singapore that is discussed in the report. The
report concludes with the statement that Singapore is one of the best places to do startup in and
despite having certain issues like limited resources and low human capital.

2ANALYZING SINGAPORE’S STARTUP ECOSYSTEM
Table of Contents
Introduction......................................................................................................................................3
Singapore’s Startup Ecosystem.......................................................................................................3
Babson’s framework of Startup Ecosystem.....................................................................................3
Policy...........................................................................................................................................4
Finance.........................................................................................................................................4
Culture.........................................................................................................................................5
Support.........................................................................................................................................5
Human Capital.............................................................................................................................5
Markets........................................................................................................................................6
Effectiveness of Government schemes and plans............................................................................6
Recommendations............................................................................................................................7
Conclusion.......................................................................................................................................9
References:....................................................................................................................................10

3ANALYZING SINGAPORE’S STARTUP ECOSYSTEM
Introduction
A startup incepts from a new and pioneering idea and implementing that idea into a
successful business model. Startup ecosystem builds itself by creating new startup firms or
companies. Entrepreneurs with their innovative idea build startups and organizations contribute
to it for their profit- all these elements together lead up to the formation of the startup ecosystem
("Forbes Welcome", 2017).
The below report analyzes the startup ecosystem of Singapore. It also details about the
present position of Singapore in the list of the leading cities for startup ecosystem.
It is necessary for any nation to promote and encourage startups as it contributes to the
overall development of the nation not only economic (Nadgrodkiewicz, 2013).
Singapore’s Startup Ecosystem
Until recently, entrepreneurship is considered an engine of development for developing
and developed countries alike (Fuerlinger, Fandl & Funke, 2015). Singapore realized the
importance of startups during the 1985 economic recession period. During the 1990s, the country
made some significant changes in its economic policies. However, the dot.com crash and the
attacks of September 11, 2001, blunted the entrepreneurial growth in Singapore. The Singapore
government dealt with this setback by setting up of the National Framework of Innovation
Enterprise (NFIE), seven years after 9/11.
Babson’s framework of Startup Ecosystem
In Aspen Network of Development Entrepreneurs’ (ANDE) 2013 review of startup
ecosystems, it made a comparative analysis of the various startup models along the dimensions

4ANALYZING SINGAPORE’S STARTUP ECOSYSTEM
of complexity and geography. It was found in the study that Babson’s Startup Ecosystem
Framework was best suited for a market like Singapore. Led by Professor Daniel Isenberg, the
Babson’s framework uses six domains for analyzing the entrepreneurial market. These domains
include policy, human capital, culture, finance, supports and markets (Sarah Cheah, 2017).
Policy
Government frames policies and implements them as per the requirement of different
sectors. The Singapore government established Research Innovation and Enterprise Council
(RIEC) with the Prime Minister as the chair with a view to advice the cabinet on policies about
research and innovations so to build a knowledge-driven society.
The University Innovation Fund (UIF), Early Stage Venture Capital (ESVF), Proof-of-
concept (POC) grants and Technology Incubation Schemes (TIS) are such programs that were
started to improve the entrepreneurial scenario in the country ("Singapore’s startup ecosystem:
Have we arrived?", 2017).
Finance
Startups cannot be created without financial backup. It is the most basic requirement to
implement any idea. This backup is received by the startups in the form of funds from various
sources. Though public funds are the common basis of fund for the early stage of startups,
venture capitals (VC) activities have also seen an increase in the initial stages. This may be
attributed to the government for implementing schemes such as ESVF and others ("How
Singapore Became an Entrepreneurial Hub", 2017).

5ANALYZING SINGAPORE’S STARTUP ECOSYSTEM
Culture
The city-state of Singapore saw a great shift in its culture over a period of more than a
decade. In case of the startup ecosystem, this shift is seen predominantly visible. The Global
Entrepreneurship Monitor (GEM) report of 2016 showed that an increase of 2.6% in respondents
who perceive startup as a decent career choice has been visible in Singapore over the span of a
decade, from 2004 to 2014 (Wonglimpiyarat, 2013).
Support
Every startup needs support from the government to survive in the market. In case of
entrepreneurs in Singapore, they have been greatly supported by the government. The startup
ecosystem of Singapore saw a speedy growth of infrastructural amenities such as spaces for co-
working, cultivation centers, professional services and many more owing to the unending support
of the government (Sarah Cheah, 2017). The government introduced startup-friendly policies for
entrepreneurs to go ahead with their innovations and flourish.
Human Capital
Training on entrepreneurship in schools was started by the Singapore government to
cultivate a strong entrepreneurial mindset amongst students. This resulted in an increase in the
number of scientists and engineers over the past decades that in turn boosted the startup
ecosystem. However, there are certain areas that concern the government regarding the
availability of talent and costs that are required by startups. Singapore being a thinly populated
nation faces a crisis of human capital, which is the most essential part of the ecosystem.

6ANALYZING SINGAPORE’S STARTUP ECOSYSTEM
Markets
Singapore provides an attractive access to the Southeast Asian Market despite having a
humble domestic market. Its geographical location gives Singapore a strategic advantage as it is
centered by China and India, the two rapidly growing markets. Indigenous products have been
successfully exported to consumers across US, China and Indonesia- the top three in the list- that
proved to be a boon to startup ecosystem of the country ("IIPL’s strategic approach to
accelerating the ecosystem", 2017).
Effectiveness of Government schemes and plans
Government plays a prominent role in promoting and establishing a startup. The support
from the government is very essential for any small or large business to survive and flourish. The
Singapore government has shown great support in this regard. It has introduced ad implemented
several schemes that have elevated the ecosystem to a great level (Ng, 2015). The launch of
schemes like TIS, POC and others as mentioned earlier, by the government provided an impetus
to the startup sector. In comparison to other countries, Singapore has certain startup related laws
that are more flexible and applicable. To give an instance, the bankruptcy law associated with
startups holds the fastest proceedings as compared to other nations. It takes an average of ten
months to resolve bankruptcy issues in Singapore whereas in other countries, the average time is
close to one and a half year.
The government has also set up a regulatory structure of extra financial advantage that
includes tax benefits to support innovation and entrepreneurship. The evident results of these
policies have been seen in the reports of World Bank in the year 2016. As per the reports,
Singapore’s total tax rate was 18.4% profit, which in comparison to other high-income countries

7ANALYZING SINGAPORE’S STARTUP ECOSYSTEM
is very low. New investments and firms are formed based on the rigidity or flexibility of
corporate tax as it has a visible impact on the formation (Wonglimpiyarat, 2013). Singapore
government has introduced taxes that ensure smooth functioning of the startups.
Recommendations
Singapore being a newly rising economy in the world, offers increased options for
starting a business ("Innovation financing policies for entrepreneurial development — Cases of
Singapore and Taiwan as newly industrializing economies in Asia", 2017).
Compared to other countries, Singapore has startup-friendly laws that attract
entrepreneurs from around the world. In contrast to western countries like Australia, Singapore
has a small land area and lacks natural resources. This has led the country to develop innovative
ideas and depend on human capital. Australia on the other hand, enjoys abundance of natural
resources. Nonetheless, Singapore has been designated as the easiest place to do any sort of
business throughout the year by World Bank ("Why Singapore?" 2017).
Among the Asian nations, Singapore is gradually making a mark in the startup
ecosystem. One of Asia’s biggest markets, China too faces tough competition from Singapore.
When it comes to foreign ownership, Singapore allows cent percent autonomy to foreign
companies. It levies no restrictions to the activities of foreign companies. Other nationalities are
allowed to startup business in China but with restrictions and prohibitions in certain business
activities.
Hong Kong is the only Asian country that gives a tough competition to Singapore as the
‘Best Country to do businesses’. Both the countries are neck to neck when it comes to easy

8ANALYZING SINGAPORE’S STARTUP ECOSYSTEM
procedures, flexible laws and so on, but Singapore excels in its tax exemptions. The salary tax in
Hong Kong ranges from two to seventeen per cent whereas in Singapore it is comparatively low.
A recent survey by GoDaddy illustrated that as compared to Hong Kong where 68%
participants are interested in startups, only 41% Singaporeans responded positively on starting a
business. Many believe that Singaporeans lack a strong entrepreneurial spirit that is in contrast to
Hong Kong.
Hong Kong made a historic move when it announced to build a joint innovation and
technology park with China’s Shenzhen province. It is supposed to be the largest platform for
entrepreneurs looking for tech-startups in the country’s history. This takes Hong Kong a step
ahead than Singapore in the startup ecosystem.
Singapore boasts of an exceedingly diverse and well-developed support structure for
local entrepreneurs and it is very good because it offers them a superior opening position.
Nonetheless, such fostering could also dampen the fighting spirit. The country brags of a greater
survival rate of firms but these firms do not take much risk. Venture capitals and other funding
are invested in a much safer option of online services but not in extending the technology and
manufacturing. Singapore can take a cue from Hong Kong and plan to go deeper into the field of
innovation and technology. It can also build a similar technology and innovation park to
encourage budding entrepreneurs of Singapore.
In the year 2015, funding deals offered by Singapore stood at 220 as compared to a mere
26 in 2010. The estimated cost of thee funding deals totaled nearly to 1.6 billion US dollars in
2015 whereas the figures stood at US$80.57 million in 2010.

9ANALYZING SINGAPORE’S STARTUP ECOSYSTEM
GRAB and LAZADA have been the two single largest funding rounds in Singapore with
US$350 million and US$250 million respectively. These facts further establish the fact that
Singapore is the ideal place for entrepreneurs. In addition, the country has been designated as the
one of the best countries for women entrepreneurs to start a business.
Conclusion
Singapore is a fast growing economy in the world and particularly in Asia. It allows
companies and individuals from all parts of the world to set up a business here. Singapore has
realized the importance of startup ecosystems and hence the government has left no stone
unturned to attract more and more investors by easing the immigration and other procedures. The
report highlighted these areas of startup ecosystem in Singapore and provided recommendations
for future entrepreneurs. It can be said in conclusion that despite being a small country with
limited resources, Singapore has successfully realized and utilized its potential to the core.

10ANALYZING SINGAPORE’S STARTUP ECOSYSTEM
References:
Forbes Welcome. (2017). Forbes.com. Retrieved 10 October 2017, from
https://www.forbes.com/sites/danisenberg/2011/05/25/introducing-the-entrepreneurship-
ecosystem-four-defining-characteristics/#6b1cbc295fe8.
Fuerlinger, G., Fandl, U., & Funke, T. (2015). The role of the state in the entrepreneurship
ecosystem: insights from Germany. Triple Helix, 2(1), 3.
How Singapore Became an Entrepreneurial Hub. (2017). Harvard Business Review. Retrieved
10 October 2017, from https://hbr.org/2015/02/how-singapore-became-an-
entrepreneurial-hub
IIPL’s strategic approach to accelerating the ecosystem. (2017). Digital News Asia. Retrieved 12
October 2017, from https://www.digitalnewsasia.com/sizzle-fizzle/iipl-strategic-
approach-to-accelerating-the-ecosystem
Innovation financing policies for entrepreneurial development — Cases of Singapore and
Taiwan as newly industrializing economies in Asia. (2017). Sciencedirect.com. Retrieved
10 October 2017, from
http://www.sciencedirect.com/science/article/pii/S1047831013000199
Meet the top 20 global startup ecosystems. (2017). e27. Retrieved 10 October 2017, from
https://e27.co/meet-top-20-global-startup-ecosystems-20150813/
Nadgrodkiewicz, A. (2013). Building entrepreneurship ecosystems. Economic Reform Features
Services.

11ANALYZING SINGAPORE’S STARTUP ECOSYSTEM
Ng, R. K. W. (2015). An Empirical Analysis of the Singapore Entrepreneurship Ecosystem: A
Case Study For BRIC Economies to Ponder. In Entrepreneurial Ecosystem (pp. 57-89).
Springer India.
Sarah Cheah, a. (2017). Role of Public Science in Fostering the Innovation and Startup
Ecosystem in Singapore. Arpjournal.org. Retrieved 10 October 2017, from
http://www.arpjournal.org/usr/browse/view_issues_detail.do?seq=132
Singapore’s startup ecosystem: Have we arrived?. (2017). Channel NewsAsia. Retrieved 10
October 2017, from http://www.channelnewsasia.com/news/singapore/singapore-s-
startup-ecosystem-have-we-arrived-8013936
Why Singapore?. (2017). Guidemesingapore.com. Retrieved 10 October 2017, from
https://www.guidemesingapore.com/why-singapore.
Wonglimpiyarat, J. (2013). Innovation financing policies for entrepreneurial development—
Cases of Singapore and Taiwan as newly industrializing economies in Asia. The Journal
of High Technology Management Research, 24(2), 109-117.