4 Ways Governments Can Encourage Startups in Asia
Investments in startups and local entrepreneurs in Asia have been on a rapid rise in the past decade or so. Today, Asia boasts some of the biggest startup companies in the world. Adding to this, the bigger players along with governments in advanced Asian economies like Singapore and Japan are putting even more investments into building a stronger startup “ecosystem”. The Asian startup environment has also seen an increase in market competitiveness while drawing investment interests from outside the region. However, for those economies in the region that have set out to catch up with this startup trend, governments in these countries can do more to foster startup growth. While many factors need to be considered when building/strengthening a startup ecosystem, governments can draw from best practices that already exist in the region. Here are four ways governments can encourage startups in Asia:
Access to Capital
One of the most critical factors to encouraging startup growth in a country is making capital accessible to startups. While there are different platforms that startups can turn to raise the needed capital to take their businesses off the ground, the reality is that this can sometimes be time consuming. Also, for those startups that are not as agile in their capital raising abilities but whose startup ideas are very promising, having alternative sources to capital can help them compete in the market. One country that takes this seriously is Singapore, which has developed different government-backed grants and schemes for startups in the country. However, in these schemes it is usually private-sector actors who identify startups that should be supported, with the government providing matching funds. This recognizes the problem that government bureaucrats are usually not good at making investment decisions. What Singapore tries to do is to augment private capital available for start-up funding while leaving the decision what to invest in to people who put their own money in a s well and thus have “skin in the game”.
Big Data Hub
Another challenge that most startups face is access to data that helps them with their business strategies and decision making, and how to work with big data. For a lot of governments in Asia there are still quite a few gaps that exist in their own big data systems. Crucial data and analytics are often not conveniently located, some outdated, and some in need of major maintenance. For this, governments need to invest more in improving their own big data hub systems to make them easily accessible to startups and the business community in general. Besides this, providing data sciences and analytics training to startups will enable them to make better business decisions and develop sound business strategies.
Accreditation has proven useful to different industries around the world. One only needs to see such labels like “ISO”, “Fair Trade”, “USDA Certified”, etc to understand how these can add to the credibility of the product or service being provided. Accreditation can help startups better compete in the market and gain the trust of both clients and investors. For this, governments can set up accreditation bodies that either help startups get accredited through globally recognized channels or they can partner with accreditation bodies that have good standing in the global and regional community to set up accreditation processes for their startup community.
Starting a business involves a lot of costs. One of this is finding the physical space to set up shop. Rent for businesses and startups in some Asian cities can add considerably to the cost burden of startups. In Singapore, a solution has already been developed for this through its JTC LaunchPad that will house over 500 startups and 35 incubators on a 200-hectre facility. The facility not only provides those services needed for startups at the initial phases but also for those startups that have already been launched. Basically a dream-turned-reality for any startup, having facilities like these can not only strengthen the startup community in a country but also allow governments to better support the needs of startups in the country.
Best practices already exist in the region and it is undeniable that Asia has already made a lot of milestones in the global startup scene. However, with the rise of a significant number of young entrepreneurs in the region, for those countries that have yet to catch up with this startup trend, learning from the best practices that already exist and investing in initiatives to support the growth of startups is crucial.