Innovation has intentionally and painstakingly been built into the DNA of this island nation to facilitate its rise as the gateway to Southeast Asia.
Recently, Explorium traveled to Singapore to learn about the local innovation and startup and to bring back learnings to our Hong Kong and global communities.
The Singapore Economic Development Board hosted us for part of the safari and planned visits with a wide variety of organizations from startups to corporate institutions, VCs, university labs, community builders, the 2019 Industry Transformation Asia Pacific conference. Explorium also visited existing community partners and Fung Group offices to share a different perspectives. An overall view is that innovation in Singapore is supported and driven by long term planning.
Stability, Daring, and Long Term Planning
Singapore prides itself on maintaining low single digit unemployment rates at whatever the cost, as well as affordable housing cost essentially by influencing a dual housing market, one for the local citizens and one for foreign investments.
In terms of planning, Singapore famously has long term strategies for most things. Typically operating on outlooks that are 10 to 30 years out. A great example of this foresight is the creation of the Jurong Island energy hub, which aimed to join together multiple oil-related corporations and organisations on 7 individual islands merged through land reclamation. Its an epic innovation story of a project starting in the 90s with few short term gains and no ‘right to play’ in the oil industry. However, once completed, the huge industrial complex boosted Singapore’s petro-chemical business for the long term, attracting foreign investments from leading global companies totaling more than S$50B, and making Singapore the third largest oil refining country in the world; a radical achievement for a country with no natural resources.
This strategy of long term planning and stability plays a large part in the building of infrastructures and public policies for innovation to prepare for the move into the Industry 4.0 revolution; where artificial intelligence and robotics are predicted to replace many of the current jobs. Singapore’s government has taken a proactive approach and has put forth national plans to re-skill its workforce; retain its competitive position as the gateway of southeast Asia, keeping unemployment rates at low levels.
As an example, Singapore has researched and devised skill maps for various positions to functionally break down what is necessary to be a productive worker in the new era. This masterplan is then trickled down to the different divisions of government, to the universities, schools and industries, providing a map of the necessary skills as new workforce generations come on the market in the next 5 to 20 years.
One impressive site that the Explorium team visited was AI Singapore (AI.SG) based at the National University Singapore. This institution is funded directly by the prime minister’s office and to the tune of S$200M. They offer 9 month apprenticeship program where participants of any age, after passing the selection test, are taught the ins-and-outs of AI on live use cases to refine their crafts. Its a curriculum philosophy focused on implementation and deployment rather than theory and research — the program even attracts PHD graduates.
AI.SG’s 100E (100 Experiment Program), facilitates commercial companies to provide problem statements for the apprentices to work on, creating a Win-Win-Win for the parties involved. The companies own all IP created, the students get to learn on real projects, and the program benefits from increased visibility in the various industries involved.
Finally, AI.SG also has an AI Apprenticeship program, currently on their 4th cohort, and so far have a 100% post graduation job placement rate. A great example of a program re-training the workforce for a new era of disruptive innovation.
The benefits of ecosystem thinking
Singapore has developed ecosystems for industries where the output of one company becomes the input of another; close proximity allowing further gains in synergies.
We visited One North, an entire business park developed to be a global talent hub and a place to discover the knowledge economy. The area is divided into dedicated industry clusters that include biomedical sciences, infocomm technology (ICT) and media industries. We primarily focused on the cluster called Launchpad @ one-north which houses the Block 71, the first of a series of 7 blocks of building where innovators, entrepreneurs, investors, developers and mentors all meet, aiming to groom the next Southeast Asian unicorns.
The Economist magazine has referred to Block 71 as “the heart of Singapore’s technology start-up ecosystem and the world’s most tightly packed entrepreneurial ecosystem”. There are hundreds of startups in this area, benefiting from the community support, and supporting and cross selling services to other businesses in One North. We had the opportunity to visit several startups. One of them, Moovaz (a logistic startup helping expats relocate), shared that they met their partners within the dense community, and leveraged it to hire talent for their company.
We also visited Level 3, by Padang & Co, a platform and space anchored around Unilever’s Foundry acceleration and scale-up concept. Housing events, startups and other partners working in parallel to Unilever’s main areas of interest, Level 3 operates an “innovation as a service” model attracting startups to the space and running different programs to find partners to innovate with Unilever. Again an example of ecosystem thinking and its benefits. The platform space and community is an easy way for both local and foreign startups to plug into the ‘Unilever API’ and work with a large corporation to scale their business.
Capturing the emerging middle class
It’s well known that the middle class is rising in Southeast Asia at incredible speeds and Singapore wants to be at the frontier of accessing these emerging markets through trade, investments, and as a base for global MNCs and startups. It is estimated there will be an addition of 50 million new middle class consumers in the region, bringing the total to 350 million by 2022. Countries that will have the most growth are Indonesia, Malaysia, the Philippines, Thailand and Vietnam, with disposable income at $300 billion for the middle classes.
When we visited Temasek, the Singapore government-backed investment company managing a portfolio of $313 Billion, we talked mainly about their focus on investments in Southeast Asia that enable these emerging consumers.
Temasek’s investment hypothesis around SEA consumption, with rising middle classes and their projected desire to have better quality of life and other more aspirational goals, would involve opportunities in improved and expanded health care, education, and entertainment, as well as financial services to support the expanded buying powers and aspirations. The enablers — and hence “investable” opportunities — are the supporting industries, such as financial services, agriculture, manufacturing and logistics, that support the delivery of those new needs. Temasek has been able to consistently deliver return for the Singaporean government for decades earning them AAA credit ratings.
We visited Lazada, the largest e-commerce operator in Southeast Asia. The Explorium team wanted to understand new developments, ideas, and where we might be able to connect with them in regards to the Fung Group. We found the themes to be clear and aligned with our other site visits as they too were creating solutions to capture new online to offline retail opportunities.
They’ve been developing their front end to engage with customers of Southeast Asia, with the accelerating internet and smart-phone penetration rates the company provides an easy way for end users to purchase. What was most impressive was the back-end and their ability to adapt to the different countries/markets’ logistic requirements. Lazada is investing in developing the last mile delivery as well. Especially in Indonesia, which requires a unique supply chain to deliver to thousands of islands. In the Philippines, it’s about building out a COD (cash on delivery) system where credit cards are not the norm when paying for internet purchases. Lazada is taking an active partnership across to potential multinational partners like the Fung Group.
We left Singapore with many new learnings and understandings that allowed us to think more deeply and ask more questions:
- How might we connect and be the enablers of consumption in this new world?
- What is our optimal mix of experimentation and long term planning?
- How do we learn from Jurong Island and create impactful audacious goals, in new industries?
- What can other ecosystems learn from Singapore?
- What opportunities for expansion are there in Singapore?
This trip was just too tightly packed with great meetups. So, apart from those mentioned above, we would like to thank the many other teams and partners we visited:
- Singapore University of Technology & Design (SUTD)
- Advanced Re-manufacturing Tech Centre (ARTC)
- Action Community for Entrepreneurs (ACE)
- Singapore Management University’s Retail Centre of Excellence (CoE)
- The Bridge Fashion Incubator
- Bridge+ Co Working, CapitaLand
- DLT Ledgers
- Technode Global
- Li Fung Trading Singapore
- IDS Med
- LF Logistics Singapore
- Northridge Partners
- Forum for the Future
To find out more about what Explorium learned in Singapore, feel free to contact us at firstname.lastname@example.org.