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Call to woo hardware builders to augment S'pore's startup ecosystem
FOR years, Singapore has nurtured software startups. It should now aim to add another piece to the jigsaw with a new focus on hardware to drive its next wave of industry growth.
This was a key takeaway from a startup pitching event hosted by Applied Materials. Named Ventures Day, it was held in Singapore for the first time on Tuesday by the Nasdaq-listed materials engineering firm.
Tony Chao, senior investment director of Applied Ventures (the venture capital arm of Applied Materials), told The Business Times at the sidelines of Ventures Day that the event sought to create enthusiasm around hardware or deep tech startups, a relatively nascent sector here.
He highlighted that Singapore's shift from software to hardware was contrary to the case in Silicon Valley, where entrepreneurial activity originated in hardware around 1971 (with silicon computer chip makers like Intel) and in recent years moved into software (with eBay and Facebook).
In general, hardware startups build physical products using deep tech, while software startups build digital products and are relatively easier and cheaper to start. Hardware teams are bigger, and require more capital for prototyping and inventory.
But Mr Chao said that Singapore can "make the climb", and is poised to be a regional hub for hardware startups - given great infrastructure, talent and intellectual property rights, as well as capital efficiency.
When asked if the Republic should first focus on attracting funds or startups, he pointed to funds as "these can always survive" and show a commitment to growing the hardware sector.
Mr Chao told BT: "It's not going to be quick. It will take patience, commitment, and a few more years of incubation." This was also a view echoed by a panel discussion held at the event, titled Opportunities and Challenges of Hardware Startups in Singapore.
Taras Wankewycz, a panellist and founder of robotics startup H3 Dynamics, said that a main challenge here was that people have "lost the capability to work with their hands". To build hardware, one had to go from idea to prototype, a capability that was "very difficult to find" here.
Lim Chee Kean, chief of smart logistics firm Ascent Solutions, added that deep tech startup founders - notably those from research institutions - tended to still wear their research hats and not think about commercialisation. He said: "They have a solution and are now waiting for a problem."
Mike Holt, vice-president of the Singapore Semiconductor Industry Association, suggested that startups do not get sufficient support from MNCs (multi-national corporations).
"So many MNCs here have been historically set up as operations or development groups, and are by nature, looking outward as their headquarters are somewhere else. They don't really connect or collaborate with the local startups ecosystem at large."
Mr Holt said that this was a pity because homegrown startups can offer innovative solutions that may be useful to MNCs, and in exchange, leverage MNCs' resources to grow.
Edwin Chow, group director for industry development and innovation and startups at Spring Singapore, said that talent here is scarce. Even among those trained in deep tech, not everyone is entrepreneurially inclined. "We need to bring in hungry talent from outside to start these companies."
Lim Jui, the head of NTUitive (Nanyang Technological University's innovation and enterprise arm), noted that hardware startups are complex, expensive, and require government support as did software startups.
As if to prove the point that the government plays a key role in shaping ecosystems, Dr Lim joked: "If EDB's budget had been cut in half and it wasn't as great in bringing in MNCs, we would see more entrepreneurs."
The Economic Development Board of Singapore (EDB) plans and executes strategies to enhance Singapore's position as a global business centre.
Applied Materials set up shop in Singapore in 1991, using the country as its headquarters for South-east Asia. Applied Ventures' Mr Chao said: "We will similarly leverage Singapore's connectivity to explore new opportunities in South-east Asia."
Since 2005, Applied Ventures has invested over US$200 million in over 60 companies globally. The sole Singapore-based startup in its portfolio is Tera-Barrier Films, which develops high-performance flexible barrier films that improve the life cycle and reliability of flexible electronics such as flex-PV, OLED, and thin film batteries.
On Tuesday, among the hardware startups that pitched were Nanoveu, which has created a product that delivers 3D on high-resolution smart devices without the need for 3D glasses; and one BioMed, which is developing point-of-care medical tests for respiratory diseases and women's reproductive health in Asia.