Some of the most astute investors, political observers, tech gurus, and global business leaders have noted that the 21st century belongs to Asia.
This belief is underlined by the assumption that Asia is going to grow at a breakneck speed over the next decade, displacing other regions to take pole position.
However, growth without swift reforms, job creation, innovation, a vibrant startup ecosystem, and quality talent isn’t sustainable.
The last Startup Genome report on startup ecosystems around the world, published in 2017, concluded that interconnectivity, sharing of ideas and resources, capital movement around the world, smartly designed accelerator programmes that help startups find a nurturing ground for their ideas, are key to startup innovation and sustainability.
Why Asia-Pacific Is the Golden Goose Right Now?
Asia Pacific has been drawing the attention from the world’s biggest venture capitalists since the beginning of 2010. With China and India offering an alternative growth story to the slowing US and Europe, most investors are turning to Asia for stability.
The fact that quality talent at a relatively low price is accessible from an ever-widening talent pool makes this region unique.
In 2017, Asia contributed to almost a third of the global GDP. According to some estimates, by 2050, Asia will control more than half the total wealth generated in the world and take back the preeminent position it held before the Industrial Revolution.
At its current normalised growth rate of over 5% p.a., it is already growing at almost 1.5-2 percentage points over the rate at which the world is growing. With reformist governments making a push for technological innovations, and rapid capital infusion, this growth is expected to become more pronounced in the coming years.
Countries in Asia Pacific That Offer Most Support to Startups
Startups in countries like China, India, Singapore, and Israel among others seem preordained to reach the pinnacle over the next decade or so because these countries sit at the core of the growth story that is slowly unfolding across the world.
Malaysia, Indonesia, Australia, and even Sri Lanka are following suit. The following is the list of countries in Asia Pacific that have been extremely supportive of startups.
Controlling almost 14% of the global economy and with a pro-industry government which has no qualms about foreign capital participation, China bulldozes its way into the list, thanks to the sheer size of its economy and demographics.
The country is slowly trying to migrate to a consumption-led economic model. Often seen as the manufacturing capital of the world, China has realised though that its aging heavy-industry players may not be able to service the engines of its economic development much longer.
It is, therefore, imperative that it focuses more on technological innovation rather than just manufacturing.
Beijing and Shanghai debuted on Startup Genomes’ list of top 20 cities for startups last year at 4th and 8th respectively. The country has 40 unicorns i.e. startups valued over US$1 billion, second only to the US, proving its success in nurturing its startups.
China unveiled its Mass Entrepreneurship and Innovation Policy in 2016 and grabbed headlines when Apple invested US$1 billion in Didi Chuxing, China’s very own Uber, the same year.
It has some of the world’s finest universities that offer a vast talent pool which is industry-ready. With more and more coworking spaces coming up, entrepreneurship seems to have caught on the imagination of the commoners.
With almost 35% of its population aged between 20 and 44 according to the latest census report, India stands at a sweet spot currently. Despite high unemployment and quality of talent issues, it continues to foster some of the most successful startups like Flipkart.
Bangalore, the country’s Silicon Valley, has seen top foreign companies make a beeline to benefit from cheap labour and relatively low cost of doing business. The government at the centre is trying to galvanise the economy with mass skilling programmes and encouragement for entrepreneurs through programmes like “Startup India”.
Bangalore managed to occupy the 20th position on Startup Genomes list in 2017. Despite problems like lack of a proper ecosystem, a mentality to go global, and adequate infrastructure, startups like BankBazaar, Big Basket, and Ola have shown that India offers a good breeding ground for the right startups.
Israel may have a population of less than a million but that doesn’t mean that it suffers from a shortage of talent or ideas. Tel Aviv, had occupied the 6th position on Startup Genomes list last year as a result of a very high startup density and comparatively low exit rate.
The country houses the research and development centres of over 300 multinational companies, giving it ready access to the cutting-edge technology. The startups also benefit from the active support from the government and the local industry.
The country also has some of the topmost universities. This means, startups can hire extremely polished talent, even from a relatively small pool, although it may sometimes be time-consuming.
Israel has managed to connect with other booming startup ecosystems around the world, ensuring that funding and talent won’t possibly run dry.
This small city-state has the largest pool of quality talent. The cost of hiring is also relatively low. With a per capita that exceeds US$50,000, Singapore has everything that a developed economy needs. The government is constantly trying to create a more conducive environment for over 42,000 startups operating in the country.
Agencies like Startup SG and SGInnovate are well-resourced and try to create synergy between these companies by helping them find the right tools, people, and funds at the right time.
Grab, Singapore’s Uber, has raised almost US$750 million from Softbank over the last few years, making it one of the sweetest success stories.
Although the country lags behind peers in terms of early stage funding for startups, especially after the initial round, and also in terms of exit rate, it makes up for it through government support and foreign collaborations that provide a steady source of talent and funds.
The personal finance market acts as a reflection of how well a country is doing economically. By gleaning information from it, you can have an accurate understanding of the funding opportunities and the size of the market available.