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How can technological ecosystems flourish in developing economies?

Thoughts from Singapore: a nation that leaped from 3rd World to 1st in 50 years

Photo by Sebastian Pichler on Unsplash

A few months ago, I encountered Alter Global when its CEO, Jesse, was a guest speaker in a class at Stanford on creating ventures in developing economies. I immediately bonded with him and subsequently with its COO, Ozair — all three of us shared an enthusiasm for the Singapore model of development and wanted to use that knowledge to positively impact other developing economies.

As a public servant involved in Singapore’s infrastructure and economic development for 12 years, I’ve been privileged to be part of the action that goes into making our country a vibrant, attractive business and lifestyle hub. To some people, the cleanliness of my country and her well-functioning public infrastructure are a dream; to others, the ability for a small island city-state to leap from third world to first in just 50 years is a sheer miracle in development.

As a young nation with an open economy, we’re constantly learning, developing and adapting to remain relevant and competitive on the global stage. The World Economic Forum cited Singapore as the world’s top tech-ready economy generating economic impact from ICT investments [1]. What are the factors that helped us catalyze and accelerate our technological ecosystem? It’s a question I often thought of, as we built industries in Singapore, worked with leading global companies at home and abroad, and carried out our investment attraction efforts across the world. Here, I’ll share 3 brief thoughts based on my experience of the Singapore model.

Stability. Whenever I speak with CEOs of multinational companies about why they choose to invest in Singapore, I almost always get this response: Singapore is stable, predictable and offers certainty. Sound boring? Perhaps. But to the entrepreneur or business leader, that certainty gives them the peace of mind to invest and plan for changes ahead of time so as to reduce risk exposure. This is true for traditional manufacturing and services sectors, and just as true for technological ecosystems. In fact, risk becomes an even greater consideration the more cutting edge and investment-intensive the technology is. Nobody wants to lose their intellectual property and capital overnight.

Some may argue that innovations have thrived in environments lacking stability, precisely because of the gaps in the system. True, and that will continue to be so. Look at how fintech startups like M-Pesa have flourished in parts of Africa where financial exclusion and inaccessibility used to prevail. However, as these innovations scale and entrepreneurs formalize their business structures, they are likely to seek continuity for their companies. Weak macroeconomic and socio-political conditions may encourage innovations to thrive in the short term but may not be conducive for them to survive in the long term.

Stability also indicates a certain level of public sector commitment to the cause. In Singapore, the public service is clearly committed: much of our regulation setting and national planning involve consultations with industry players and maintaining transparency. We believe this promotes technological innovation, protection of intellectual property and data, and collaboration across sectors.

Talent. When big data, AI, machine learning, deep learning and other associated technologies emerged over the years, Singapore went out scouting for the top minds across the world to help us build scientific leadership in these areas. We offered fellowships and funding under various initiatives (e.g., AI.SG) to attract, train and support scientists in Singapore. Particularly when the technology was new, complicated and expensive, these interventions went a long way in giving us an edge.

Technological ecosystems can only thrive and survive if there is a concentration of good people. In some cases, immigration policies can help jumpstart a shortage of specific technological talent. Singapore recognizes that the competition for talent is a global one — even more pronounced in technology where innovation knows no physical boundaries — and is deliberate about its talent attraction policies to support and anticipate the skills needed for industries to excel.

Over time, domestic education systems ought to build a pipeline of talent to serve the evolving needs of the sector. Formal and informal pathways are critical here — apprenticeships (i.e., Singapore is taking a leaf out of the books of the DACH countries), training partnerships with the private sector (e.g., Kaspersky helped Singapore train our initial batch of cybersecurity experts when we had none), and access to technology in the classrooms. The key is to continuously build relevance and resilience in the talent pool to serve the needs of the growing ecosystem.

Infrastructure. Singapore may be a small country of 5.5 million people but our mobile penetration rate is close to 150% [2], with the highest download speeds across the world [3]. That connectivity is a critical foundation for the country’s technological advancement and underpins our aspirations to be a “Smart Nation” — where public and private services are digitally connected to empower the lives of citizens.

The developing world leapfrogged the desktop and went straight to mobile. Indonesia’s mobile phone penetration stands at 173 million users [4] — a penetration rate which is just under 45% and which will continue to grow; the continent of Africa has more than 1 billion mobile phone subscribers [5]. Mobile technology will be the way forward in developing economies; correspondingly, innovation in this space will need reliable connectivity and sound infrastructure to flourish.

But the impact of infrastructure on the technological ecosystem goes beyond connectivity. It’s also about dependable electricity grids to maintain data centres, drive computing power, test prototypes. And at the very basic level, for any ecosystem to thrive, people must be able to get around safely, including getting to work. One of the earliest challenges we faced in setting up the biotech cluster in Singapore was getting people to work there because there wasn’t enough public infrastructure or transportation options to serve the area. Various government agencies stepped in to partner with the biotech companies to offer private and public shuttle services in the interim. The government also reviewed plans with public transportation providers to quickly extend routes to the area.

It’s easy to get caught up in the excitement of the technologies themselves when building technological ecosystems. However, it is just as important to put in place solid foundations of the ecosystem that will support and sustain the success of these technologies and the economies that thrive on them.

In my next post, I will delve into the topic of stability and the impact that government intervention can have on developing its nation’s technological ecosystems.

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Dawn Lim is currently a Sloan Fellow at the Stanford Graduate School of Business. She has spent more than a decade working in infrastructure, logistics and economic development for Singapore. The views expressed in this article are entirely her own. This is the first in a series of posts that Dawn is writing in collaboration with Alter Global.

[4] Statista

Alter finds and scales the world’s best tech founders. Our high-growth ventures are led by high-character entrepreneurs who are not just building their companies, they are building their countries. #ventureboldly

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Dawn Lim

Dawn Lim

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