Singapore - Despite a commonly held view that Singapore could aspire to be a test-bed for global innovation, some veteran entrepreneurs say local companies would do better to focus instead on global markets, or internationalisation, from the get-go.
Tan Min-Liang, chief executive officer of Razer, a San Francisco-based gaming hardware company, said: "While it might seem like common wisdom to first test (an idea) in Singapore, and then take it regionally and to the world, with all due respect to the government, I think it doesn't make sense in today's world."
The Singaporean, who founded Razer in 2005, said the domestic market is fundamentally too small and the rewards from test-bedding here are rarely worth the same effort spent to test-bed outside of Singapore.
"Furthermore, by the time you're done with test-bedding in Singapore, somebody's already tested the same (idea) in China, or in California, reaching out to North America and so forth. You're better off starting in the US and China from the get-go."
Isaac Ho, CEO of venture capital firm Venturecraft, which operates an incubator in Hangzhou, shares the same sentiment. "Even if you successfully test-bed a product here, the small population means you will not be prepared for large volume transactions. This could result in under-building a product."
Notably, Uber, whose headquarters is in San Francisco, is trialing self-driving cars in Pittsburg. It deliberately chose the industrial city because of its erratic weather and winding roads. An Uber director was quoted in Fast Company as saying: "If we can drive in Pittsburgh, we have what it takes to drive in other cities."
In a similar vein, Mr Ho noted that the environment in Singapore is not a true test of the actual global market - test-bedding here is akin to drafting a business plan based on theory, and not experience.
"If startups test-bed here, they will need to expend effort to undo what they've built for use in other markets, increasing business expenditure. Instead, they should go quickly into the global markets where they want to be anchored."
Mr Ho also said the government's efforts to promote entrepreneurship may be counter-intuitive. "Singaporeans are well taken care of by the government. Every young person I've spoken to acknowledged they will not have an issue owning an HDB. The hunger level is not the same. Most entrepreneurs know there is always another job for them."
He suggested that the government do less to promote entrepreneurship ("it's not for everyone") but do more to expose youths to technology and innovation from a young age, such as through overseas attachments. "The students will be exposed to real hunger and passion, and see how fast the other countries are racing ahead."
Mr Tan said the Republic should focus less on bringing in foreign talent and companies, and more on investing in Singaporeans who are prepared to go global but who will bring employment, innovation and profit back to the country.
"As for companies, what they need to do today is be incredibly nimble, take advantage the best talent found in Singapore, but ensure that they are always looking global at the same time."
International Enterprise Singapore (IES) is helping enterprises do that by looking for tech co-creation opportunities and business ideas from key markets such as the US. Natalie Choo, group director for North America and Europe at IES, said: "The goal is to help them identify innovations, businesses or solutions that can be deployed and scaled up overseas."
For instance, IES facilitated a partnership between CapitaLand and Chinese co-working operator UrWork to create a co-working solution in China. Co-working is a concept popularised in the US.
"In this regard, we are helping CapitaLand source new innovative business models in the US to be deployed across their assets around the world."
Cap Vista Singapore, the VC arm of the Defence Science and Technology Agency, has also set its sights abroad. It recently invested in Canadian accelerator TandemLaunch, citing complementary focus areas, such as cognitive performance, human-machine interaction and data analytics, that can translate into products beneficial to Singapore's defence.
Kevin Foo, head of investment at Cap Vista, told The Business Times: "With the rate of technological disruption happening in the world, stakeholders more than ever expect quick deployments of chosen products before the next wave of competing technologies come around."
That said, Mr Foo believes that Singapore is an exemplary test-bed for innovation and technologies benefiting the global market. "The level of infrastructure development within our small cityscape allows for close co-operation between different organisations, public or private, to co-develop and test technologies."
Mr Tan urges Singapore to take a longer-term approach to innovation. He said: "It's not going to happen overnight, we need to be prepared to be investing heavily in the long term without seeing any short-term rewards."
This article was first published on Mar 13, 2017. Get The Business Times for more stories.