Business needs come first
It doesn’t matter how great an environment you provide, what your tax rate is or the quality of your workforce. You can’t entice a company to set up shop if it doesn’t suit their business needs.
If there isn’t a powerful strategic business reason for a company to set up in Singapore, no amount of enticement is likely to make a difference. So what are the business needs that the companies we spoke to had paramount in their minds?
Companies follow the money. They want to be in places where they can access new markets, whether those are consumer markets or business to business. On its own Singapore does not present a compelling case as a consumer market given its relatively small size, but start-ups did, however, see Singapore as a platform from which to access parts of Asia.
Interestingly, Singapore was not seen as a gateway to China (Hong Kong serves that purpose) but companies we spoke to definitely identified it as a safe place from which to enter into fast-growing markets like Indonesia and the Philippines. With youthful populations, rapidly growing middle classes and high penetration of cell-phones, these markets are becoming extremely appealing to expanding tech start-ups.
Indonesia alone boasts more than 260 million people, and Singapore is seen as a safe and easy place to set up in order to connect with them.
For these start-ups access to talent is everything. The questions they were asking themselves: Can I find the talent I’ll need in Singapore? Can I bring my own talent with me?
While nurturing digital skills has been a real focus for Singapore there is still work to do. With mega players such as Facebook and Google already established in Singapore, smaller start-ups found it difficult to picture a world in which they could prise talented employees away from the bigger, market-leading operators.
“We found it hard to hire the talent we needed,” one company who had recently set up in Singapore said. “There weren’t enough people with enough experience.”
It’s possible this issue will abate as many of the young people currently studying and working in digital industries become more experienced. Until then, companies want to know that they can bring in their own talent when required.
Local partnerships are key
One thing that clearly emerged from our interviews was a sense that a vibrant local tech culture, and the ability to make and mine connections within it, are huge assets for Singapore.
Foreign companies are looking for ways to connect themselves into a local ecosystem. Who are the local partners who can help you set up a supply chain, act as subcontractors, advise or help you find office space or talent? Start-ups are used to looking to peers for this information as opposed to governments, hence the importance and power of early ecosystem connections.
With a rich networking culture based around events and connections, there was a clear understanding that Singapore offers a buzzing scene for digital and tech start-ups.
Help me find my first customer
It’s one thing to be business friendly, it’s another to become such a compelling ally that tech and digital companies cannot help but rave about you to each other. Growing start-ups who are looking to expand need the confidence boost that comes from reducing or removing business risk. And while currently nobody expects a government to do that for them, it could be transformative.
Start-ups told us they could expand with confidence if they had assistance in finding that first anchor client. Could the government help with introductions to Singapore-based companies? Could it support with contracts for service provision for companies who are willing to set up permanently in Singapore? Is this the role of the government? It’s an intriguing idea and one that is worthy of further thought and exploration.
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