When talking about a region’s startup ecosystem, we usually talk about startups and the entrepreneurs behind them. Countries that boast unicorns take center stage and the discussion revolves around how these startups grew into a billion dollar venture. While this is understandable, we tend to overlook one key player in the growth of a startup ecosystem—the government.
In Vietnam, the government has surely played a large role turning one of the poorest countries in the world into one of the fastest growing economies in Southeast Asia. But the Vietnamese government’s focus on tech and innovation has also led to the establishment of over 3,000 startups in the country, with Internet unicorn VNG Corporation—the Vietnamese online content and social networking giant—leading the pack.
Likewise, Singapore has one of the most proactive governments in cultivating an innovation-driven tech industry. There are numerous government agencies in Singapore that offer grants and funding to local startups, and there are also scholarship programs that encourage highly talented individuals to develop solutions and enter the local startup scene.
Most countries in Asia Pacific have been doing this for years while countries in the Southeast Asian region have also followed suit. Competitions, grants, and other government initiatives are now abundant. But some of which remain unknown to local and especially to nonlocal entrepreneurs who may benefit from them.
With this, we decided to examine selected startup ecosystems in the Asia Pacific region and make a list of the government initiatives that are designed to help startups, small enterprises, and aspiring entrepreneurs of the respective countries.
Local governments in China are launching numerous projects to support startups. These usually come in the form of funding for research and development or for expansion.
In 2017, Torch High-Tech Industry Development Center under the Ministry of Science and Technology emphasized promoting entrepreneurship and innovation in China by providing financial support and creating environments conducive to startup growth.
In line with this, the Chinese government has consistently showed its support for the startup and tech industry in the country, especially for blockchain-powered innovations. Just last year, venture capital firm Tunlan Investment launched a US$1.6 billion blockchain fund to invest in startups in Hangzhou City and 30% of the said fund is backed by the city government.
As of today, there’s no official list of the startups that have acquired support from the fund, but with initiatives like this becoming a regular occurence in China, it would not be surprising if the number of government-backed startups reach the hundreds or even thousands.
As the fourth largest economy in Asia, South Korea has also taken huge strides in supporting the nation’s startup scene. One of the country’s goals is to become a global startup hub. To do this, one of the government’s initiatives is the K-Startup Grand Challenge.
With the goal of growing the country’s startup community, the Grand Challenge selects 40 teams to undergo a 3.5-month acceleration program. The program provides startup entrepreneurs with free office space, mentors, access to networking sessions, and important information in establishing a business in Korea.
Apart from that, the top 20 startups will receive a total funding of more than US$10,000 while the top 4 startups will receive funding from US$ 6,000 to US$100,000.
Last 2018, the Singapore-based startup Nodis was selected as the top startup among thousands of participants in the K-Startup Grand Challenge. Apart from winning US$100,000, the startup also received support to grow its brand in South Korea.
Fukuoka is known to many as Japan’s startup capital. Apart from having lower corporate tax rates for startups, it is also the first Japanese city to offer a Startup Visa for foreign entrepreneurs. The Startup Visa gives foreigners the opportunity to live in Fukuoka and receive support to establish a startup in the city. In addition, the city provides financial assistance to entrepreneurs. Winners of the city’s yearly Business Plan contest can win a maximum of 1 million yen (about US$9,245) of subsidy while qualified entrepreneurs can obtain loans up to 35 million yen (US$323,540) with 1.3% interest.
Fukuoka City even features a Startup Cafe wherein entrepreneurs can meet other entrepreneurs and get advice from the mentors and experts who gather there.. There’s also a Global Startup Center (GSC) which provides foreign entrepreneurs access to resources and information on business that are translated in English.
The Estonian micro mobility company Stigo is one of the startups that have benefitted from the Startup Cafe. Stigo received support from the Cafe in developing a Japanese version of their product and ensuring that their company is compliant with the laws in Japan. With the Cafe’s help, Stigo has expanded its brand in the Japanese soil.
Australia is one of the most startup-friendly countries in the world, ranking 5th in the StartupBlink Startup Ecosystem Rankings 2019 report. Although the report says that Australia’s rise in the rankings can be largely attributed to the country’s newest unicorn Canva, it can also be argued that the Australian government’s support has also helped the startup boom in the country.
One of the best government grants in Australia is the Entrepreneur’s Programme. Dubbed as the “flagship initiative for business competitiveness and productivity”, the grant provides practical support such as mentoring from a business adviser, funding, and providing opportunities to connect to other organizations to test and develop new ideas, and many more.
The agritech startup Flurosat is one of the many startups that have benefited from the Entrepreneur’s Programme. According to Flurosat CEO Anastasia Volkova, the grant helped them to strategize on expanding their brand in the US. With the help of the program’s business adviser, they were able to attract investors and fast track their global expansion, helping more farmers along the way.
Government agencies in Singapore offer various grants—from financing schemes to mentorship programs—to startups. This is not new as the city-state government has been exerting conscious effort to create Singapore’s version of Silicon Valley.
Aside from these, the nation’s premier university National University of Singapore is also doing its part to encourage more young talents to venture into business. NUS offers the Stephen Riady Young Entrepreneur Scholarship to high-performing students who have a keen interest in business. The scholars will not only receive mentorship from the NUS Enterprise but they will also be eligible to apply for funding to start their business after they graduate.
Indonesia is home to a number of unicorns including the popular ride-hailing app Go-Jek and online marketplace Tokopedia. Recently re-elected Indonesian President Joko Widodo believes that tech and innovation can help improve the country’s economy and he looks to see more Indonesia-based startups grow into unicorns.
In line with this, the Communications and Information Ministry recently launched the Next Indonesian Unicorn (NextICorn) Foundation under the NextICorn iniatitive that started in 2017. NextICorn looks to help promising startups to get funding and other necessary resources to establish a company. Just last year, NextICorn hosted two international summits featuring Go-Jek founder Nadiem Makarim and Traveloka CEO Ferry Unardi.
Vietnam’s Ministry of Science and Technology (MoST) is one of the government agencies that has been most supportive of the Vietnam startup scene. MoST hosts an annual event called TechFest Vietnam which gathers entrepreneurs, investors, and representatives from various organizations to talk about emerging tech trends and the economic market in Vietnam. The event also holds a startup competition that provides opportunities for funding and mentorship to startups.
In 2017, tech startup AMI won the grand prize which included a trip to Silicon Valley and New York City and the opportunity to learn from the best founders and investors in each city. Winning the Tech Fest was more than CEO Nhat Le ever imagined as AMI’s performance in the competition convinced a Vietnamese real estate corporation to invest US$ 9 million to the startup.
Today, AMI has a handful of products that use technologies such as blockchain and AI to digitize information and improve various services.
R&D activities for tech and innovation have always been a top priority for the Philippine’s Department of Science and Technology (DOST). The department is known to provide funding for research conducted by academic institutions. It also provides scholarships to students who plan to take science-related courses in college. Apart from these, DOST is hard at work launching projects to support tech startups. In fact, it recently allocated more than Php20 million (about US$400,000) of funding among five startups in the Philippines.
The fund aims to provide financial support for startups to conduct product testing and development. Startups that are interested to apply for funding will be evaluated in terms of their product’s tech readiness and viability, market potential, financial viability, and social impact. Among the beneficiaries of the funding grant last year is bike startup Rurok Industries Inc. Rurok provides the first Philippine performance bike in the market.
India Prime Minister Narendra Modi is a staunch supporter of startups, technology, and innovation as he believes that they are “exciting and effective instruments for India’s transformation.” Under his leadership, the government of India launched Startup India, an initiative that aims to build a strong startup ecosystem that can boost the nation’s economy.
Through Startup India, entrepreneurs can enjoy the following benefits: application for patents at lower fees, funding, 3-year income tax exemption, choice of investors, and many more. Within three years, more than 15,000 startups have been recognized under the program.
The Indian government also provides numerous grants through different departments. Before its launch, sportswear startup Heelium obtained a funding of Rs 10 lakh (over US$14,500) from the government’s Department of Science and Technology. Since then, the startup has sold thousands of innovative products such as bamboo socks online. Heelium CEO Prateek Sharma also formally received a check of Rs 5 lakhs (about US$7,300) for being one of the startups that won in The National Entrepreneurship Awards 2018 instituted by The Ministry of Skill Development and Entrepreneurship.
It takes a village, indeed, and the support and encouragement that governments are giving startups, both in the developed and developing worlds, only means the innovations hold such promise in terms of uplifting the quality of life of citizens and creating great value.
For more insights on content marketing, brand journalism, and the Asia-Pacific startup ecosystem, visit our website at https://ambidextr.media.