Perhaps the biggest surprise coming out of a 150-page research report covering 10,000 start-ups and 300 partner companies worldwide is that tiny Singapore has overthrown tech centre Silicon Valley as the world’s No. 1 for start-up talent.
The report by Startup Genome, a US-based organisation, credits Singapore’s innovative policies for its great start-up ecosystem.
While Singapore’s overall ranking this year fell two notches to 12th, this was due to two new Chinese entrants, it said. Singapore’s performance numbers are solid and will probably continue to rise, it added.
Along with a geographical location that offers easy access to up-and-coming tech markets in South-east Asia, Singapore’s 1,600 to 2,400 tech start-ups enjoy significant government subsidies.
Strategies here are working to establish local tech start-ups as globally relevant firms, said the report.
Dr Alex Lin, head of ecosystem development at SGInnovate, said the Republic is evolving at a pace like no other ecosystem.
“Within three years, we are a sustainable ecosystem of accelerators and corporate co-innovation, resulting in a six-fold increase of start-ups raising series A (a type of funding); in a year, venture capital money doubled to US$1.7 billion.”
Singapore’s access to quality talent and its relative cost put it ahead of rivals.
The average software engineer salary here of US$35,000 (S$49,000) per year, for example, is below the US$49,000 global average. High pay is one reason Silicon Valley lost its top talent ranking.
Also, while Singapore trailed behind belowthe average top 20 nation, in ranking 10th in terms of talent quality, it more than made up for it by being the fourth- and second-best ecosystem for start-ups to access experienced software engineers and growth employees, respectively.
The experience levels of talent here were found to be comparatively strong, with 80 per cent of engineering and 74 per cent of growth teams boasting at least two years of prior start-up experience compared with global averages of 72 per cent and 60 per cent, respectively.
Singapore has the third-highest level of global connectedness of all top 20 ecosystems – outperforming Silicon Valley again.
The Republic also has the sixth-highest percentage of immigrant founders at 35 per cent.
“Singapore is an open society and welcomes entrepreneurs from around the world to create the next big thing here,” said Mr James Tan, managing partner of Asian technology venture fund Quest Ventures.
This is Startup Genome’s third Global Startup Ecosystem Report. The 2017 survey examines how cities help to grow and sustain start-up ecosystems through eight major factors: performance, funding, market reach, talent, start-up experience, resource attraction, ecosystem demographics and founder demographics.
Silicon Valley is still No. 1 overall and in most categories, but the report noted that the US is losing dominance to Asia and Europe. However, the US still has seven top 20 cities.
The Chinese cities of Beijing and Shanghai, absent from previous reports owing to lack of data, debuted at No. 4 and No. 8, respectively.
Mr Lim Der Shing, tech investor and co-founder of JobsCentral Group, said the Asean tech ecosystem is one of the most exciting in terms of risk reward.
“My co-founder and I are putting our money where our mouth is and investing heavily in both Asean start-ups and VCs. And Singapore is where we find all our deals as most start-ups value the talent pool, capital pool, clear corporate governance and intellectual property regime here.”
Mr Tiang Lim Foo, operating partner of Singapore-based early stage venture firm SeedPlus, said challenges remain.
“For one thing, exit options remain limited, thus restricting capital/talent liquidity circulating back into the ecosystem,” he said, adding, “I remain confident that this will be solved in time.”
Correction note: This story has been edited to reflect Dr Alex Lin’s designation and current organisation.