New landscapes being drawn on Singapore's innovation canvas

Singapore

THE funding is here, the startups are here too, and the mentors are definitely in the game. But the players are mapping a different scene on Singapore's innovation canvas today.

In the past year, a record number of businesses here have launched initiatives to co-innovate with startups to stay ahead of the disruption curve.

While observers applaude their efforts, they note that it remains to be seen if Corporate Singapore can adequately respond to disruption - the process by which new technologies create potential for economic displacement or provide opportunities for entirely new economic sectors to emerge.

Indeed, many quarters believe the majority of companies are still groping in the dark when it comes to innovation.

In just the last year, over 15 enterprises launched corporate accelerator programmes or venture capital funds to foster startups and new technologies. These included OCBC, NTUC Income, Ascendas-Singbridge, Chan Brothers, Singapore Power, CapitaLand, DeClout, Wilmar and YCH Group - representing diverse sectors ranging from banking and travel to real estate and energy.

Hugh Mason, co-founder of corporate innovation platform JFDI, said that while corporates have always understood that innovation is a mainstream activity for any business that wants to stay relevant, and have therefore always dabbled in some form of innovation, what seemed to have changed in the last year was that many have opened up to connecting with startups in new ways.

Mr Mason said: "I hope that's not just about a justified fear of disruption, but also because many corporates recognise a positive opportunity, now that the old model of a corporation as a self-sufficient island is evolving. It's not just about gluing sparkling startups on the side of a corporate supertanker but rather creating speedboats to explore new islands of opportunity together."

Alex Lin, head of Infocomm Investments Pte Ltd (IIPL), which helps enterprises create their own corporate accelerators), noted that in recent years, the proliferation of startups that are keen to collaborate with enterprises for infrastructure support and market access has led enterprises to realise the benefits of leveraging startups to provide free, untethered innovations for their businesses.

Dr Lin added that fresh support from the government has encouraged corporates to prioritise co-innovation with startups. The National Research Foundation, for instance, last year rolled out the Early Stage Venture Fund III to back corporate venture funds set up by large local enterprises, with which it will jointly invest in Singapore-based startups.

Notably, large enterprises were not the only ones feeling the heat from disruption. Startups, too, got into the game last year. Uber Singapore, for instance, launched new services (such as UberPOOL and the pay-in-cash option) that appeared to threaten the survival of its existing offerings. General manager Warren Tseng had said: "Better Uber disrupts itself than have someone else do it."

Additionally, gaming company Razer became the first startup in Singapore to turn corporate venture capitalist. It rolled out a US$30 million fund to invest in fellow startups in adjacent sectors such as virtual reality and advanced engineering - pointing to a shift towards collaborative innovation in the startup ecosystem, and more importantly, that disruption takes no prisoners.

Paul Santos, managing partner of venture capital firm Wavemakers Partners, said: "The mobile phone, the cloud, sensors, artificial intelligence - all of these have accelerated the pace, breadth and depth of change. It's not just Singaporean corporates that are affected. Any company that doesn't find ways to keep up with the change will be vulnerable."

But even as several corporates have jumped on the bandwagon of corporate acceleration, IIPL's Dr Lin said that these are "still the minority with good publicity". He added: "The vast majority of corporates are still sitting on the fence, waiting to be hit by the tsunami of disruption."

Isaac Ho, chief of private investment firm Venturecraft, reasoned that local enterprises tend to be more conservative and passive, and will typically look to the government for nationwide mandates or incentives to mitigate their risks of innovation and startup ventures. Even those that have initiated corporate innovation efforts face opposition from colleagues who are resistant to change, he said.

"As a result, corporate innovation efforts here have not gained significant traction as quickly as one might hope for."

Asked how companies can embark on corporate innovation, Dr Lin urged them to first identify a problem that is "worth solving".

He said: "With this, they would be able to find a good market to focus on and create winning products to address the market, hence leading to sustainable profitability. However, the ability to ask beautiful questions that lead to finding problems worth solving is lacking."

The result of this inability is the creation of many failed programmes and products that the market does not want, and wasted efforts and resources. Dr Lin advised: "To innovate, the first step is to focus on market needs, be they apparent or not."

Xavier Pavie, a professor at ESSEC Business School, said that innovation is always a paradox: failure first, success second. He said: "You can do lots of research, surveys and forecasts, but you'll never know how your innovation will be received by your potential clients. You may ask: How can I make sure my ideas will be successful? There is just one way: take the risk, and multiply the risks."

That is, companies should launch multiple products or services to increase their chances of success, Dr Pavie said. "If you trust one idea, you are certain to fail and your efforts will be in vain."