Discuss about the Role of State in Entrepreneurship Ecosystem.
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).
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.
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 of complexity and geography management. 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).
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).
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 management, 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).
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).
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.
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.
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).
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 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.
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 management. 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 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.
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.
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 https://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.
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 https://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 https://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.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download