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Startups' key role in Singapore's economic transformation
AN international mindset. A community-based, collaborative approach. A creative, digital-first way of doing business. These all sound like ingredients that underpin a vibrant startup ecosystem. Indeed so. And they are also three of the core tenets that Singapore has identified as vital to transform its economy in the coming years.
The 2017 Singapore Budget and the Committee on the Future Economy's report both outline the strategies and initiatives needed for the Singapore economy to be innovative, nimble and international. The startup community - and the dynamism emerging from it - should be at the centre of this transformation.
A surge of creativity and disruptive ideas from local entrepreneurs is already invigorating the wider business economy in Singapore. The community is also showcasing the benefits of partnerships and collaboration. Shared experiences, failings and learnings in the startup community are strengthening the enterprises individually and collectively.
Most prominently, Singapore's startups are becoming agents for globalisation. Among a range of initiatives announced in Budget 2017 to help Singapore businesses scale up and internationalise, S$600 million in government capital is allocated to a new International Partnership Fund, underscoring the importance of looking beyond Singapore's shores to spur economic growth.
The benefits of international growth are clear. A recent study from International Enterprise Singapore shows that Singapore businesses are reaping the rewards from international expansion, with China, Myanmar and Vietnam as particular focus areas. Turnover from abroad rose 4.2 per cent in 2016 from the previous year, with smaller firms setting the pace. Overseas revenue made up 53 per cent of their total turnover in 2016 - a three-percentage-point increase from 2015.
One of the most transformative aspects of the burgeoning Internet economy is the speed at which companies can now go global, compared to just 15 years ago. With a solid product, and the right software tools in their artillery, businesses can now reach potential customers anywhere.
Some of the leading lights of the startup community in Singapore are showing how quickly this growth can happen. Guavapass, a Singapore business which gives access to a range of fitness classes, was launched in 2015. It is now available in 11 countries from Indonesia to China, and from the United Arab Emirates to South Korea.
Oddle, which helps restaurants go digital with online food-ordering systems, was launched in Singapore in 2013. Today, its systems are used by more than 1,300 restaurants across Singapore, Malaysia, Taiwan, Hong Kong and Vietnam.
Traditionally, there have been significant stumbling blocks that slow down, or prevent, international expansion - particularly for smaller firms without significant resources. How can I accept multiple currencies? Do I need to negotiate and manage contracts with banks and clearinghouses in lots of different countries? How do I manage onboarding? What are the legal implications?
Today you can convert a great idea into a business without these factors to hold you back. With the technological infrastructure in place to help Singapore businesses accept payments from a global customer base, create new business models and compete more effectively, their focus can be shifted towards creating products that deliver true value on an international scale.
While startups are driving much of this disruption, incumbents aren't impervious to this changing economic tide. Older businesses are now beginning to experiment with new technologies to reinvent themselves for a mobile era, introducing revenue streams or evolving their business models to keep apace.
We're even seeing this trend with government services, particularly in Singapore. Beeline, for example, jointly developed by the Infocomm Development Authority and the Land Transport Authority, is reimagining how consumers interact with public transport. Users can suggest new direct bus routes to private bus operators, as well as book the rides they suggest, all via an app.
By building borderless products, adopting a global outlook, and taking advantage of better software infrastructure, Singapore businesses can internationalise rapidly no matter what is their size. And if the growth of Singapore's economy hinges on the success of local businesses on the international stage, the startup community is poised to play the leading role.
- The writer is head of South-east Asia at Stripe, a software company that helps individuals or organisations start an Internet business