Deep tech finds hope in emerging sectors after heavy pandemic blow
Singapore
GROWTH in Singapore's deep tech sector is expected in the coming years, with opportunities opening up in the spacetech industry, sustainable materials industry and more, showed a report from deep tech ecosystem builder SGInnovate.
According to the report, the deep tech startup industry peaked in 2019, with the number of startups incorporated in the sector growing to 87, from 57 in 2017.
However, with the onslaught of the pandemic, all 4 of the verticals that SGInnovate classified under deep tech were impacted in the following years. The total number of startups incorporated across the agrifood, advanced manufacturing, sustainability and health and biomedical sciences verticals dropped to 68 in 2020 and 36 in 2021.
The report surveyed the early-stage emerging technology startup landscape in Singapore. It provides an overview of the deep tech industry over the last 5 years.
SGInnovate's executive director of investments Tong Hsien-Hui told The Business Times that deep tech startups faced limitations during the pandemic. As their work requires having access to laboratories and physical testing with equipment, safe distancing rules and group size restrictions had capped the scope of allowable activities in innovation and research. This led to fewer startup incorporations during the period.
Despite the effects caused by Covid-19, SGInnovate sees improvements for the industry as pandemic rules ease in the country.
Within the spacetech sector, at least 8 startups have been newly incorporated since 2017. More startups are expected to emerge in this sector as the industry is set to grow with the space accelerator programme by Singapore Space & Technology, SGInnovate noted.
Developments in the sector come on the back of advancements in manufacturing, lower component costs and the growing affordability of technology. This has lowered barriers to entry for startups as less capital is required to found companies in the scene.
Additionally, with Singapore signing the Artemis Accords, spacetech startups can also benefit as they are able to work with other startups, corporates, industry organisations or government bodies to help them scale up, Tong said.
The Artemis Accords is an international agreement between countries and aims to promote the peaceful, sustainable and beneficial use of space for all mankind.
Amid the many positives SGInnovate sees for the sector, Tong notes that startups may face challenges as well.
Spacetech startups tend to be capital intensive, so founders need to raise more money than startups in other sectors. There is a longer research and planning period required before they are able to test their technologies, he added. Moreover, business models in spacetech startups are not as clear, there is no certainty in how they monetise what they do.
Hopping on the global sustainability trend
In the sustainability sector, the number of startups newly incorporated dropped from 16 in 2019 to 7 in 2020. The figure rose to 8 in 2021.
With Singapore turning to focus on green energy and building a sustainable environment, SGInnovate expects more opportunities for startups within the sector.
Tong said the global trend in sustainability will drive research and encourage funding in the sector. He added that SGInnovate has observed companies surface in sectors such as energy, recycling, renewables, reuse and reducing usage.
The Singapore Green Plan 2030, a nation-wide movement initiated by the government to advance the country's agenda on sustainable development, will hasten existing trends as well, Tong added.
He said this initiative is critical for the sustainability sector, as demand for green products and solutions are often driven by regulation. With more companies forced to explore innovative ways to augment green policies, this could encourage the creation of more sustainability startups, Tong said.
