For decades, government agencies from across the world have been drawn to Singapore, owing to its renowned status as a sturdy regional financial and tech hub. A good example would be South Korea. It shares strong diplomatic relations with Singapore and they have long been bosom trade partners. Both countries also actively invest in high tech industries.
One reason why Korean companies and organisations are eager to tap into Singapore’s ecosystem is the ease of market access.
“Korean startups used to look mainly at China but More and more Korean startups get interested in getting acceleration and doing business in Southeast Asia,” said Claudia Hyun, Senior Manager of Global Acceleration Division, GCCEI (Gyeonggi Center for Creative Economy & Innovation).
‘“And since there is no language barrier in Singapore because its official language in the country is English and seeing that it has a multicultural and open business environment, making Singapore an ideal market for collaboration and partnerships.”
Launched in 2015, GCCEI is a government- and Korea Telecom-funded agency that aims to help high-potential startups navigate the growth journey so that they may leapfrog towards regional and global expansion, with great chances of success.
Hyun said that while South Korea is adept at developing and manufacturing innovative high tech products, not many have the capabilities to go abroad due to language barriers (low English literacy in the country) and strict regulations.
Last year, a Financial Times article pointed out that in South Korea, startups often get overshadowed by tech conglomerates such as LG and Samsung. In addition, the country has stringent funding climate that is risk-averse; tight controls around new technological innovation such as autonomous driving; and a rigid corporate environment that still favours a top-down hierarchy.
Indeed, one of the country’s most successful startups, Viva Republica, which operates p2p money transfer platform Toss, had to raise funding from Silicon Valley and other overseas investors.
But while these deep-rooted issues remain a challenge to overcome, the South Korean government have taken active steps to power up its startup ecosystem.
Since 2015, the South Korean government has pledged US$9 billion to develop the country into a regional startup hub. There have been some positive outcomes. Famed Silicon Valley VC 500 Startups’ Korean chapter has invested in over 30 startups locally, and the country has attracted the likes of Google and accelerator SparkLabs to set up offices there.
In 2016, Singapore’s central bank, the Monetary Authority of Singapore (MAS), and the Korean Financial Services Commission (KFSC) signed a cooperation agreement to bolster joint fintech projects in Singapore.
In 2018, Singapore and South Korea also inked agreements to deepen ties between small and medium enterprises (SMEs) and startups of both countries. This would allow these companies to leverage each other’s tech infrastructure and investment opportunities, to accelerate growth beyond their respective markets.
GCCEI recently held a Demo Day in Singapore in collaboration with e27, with the aim of drawing Korean startups to the attention of both local and regional investors. It brought in 13 startups, with many, interestingly, in the IoT or hardware space. Hyun attributed this to Korea’s strong expertise in the feature phone space.
Hyun explained that many of these startups were founded by engineers who worked at design and engineering companies that manufactured phones for conglomerates such as Samsung.
By being exposed to Singapore’s environment and investors, these engineers would be able to develop a product/market fit and construct business use cases for their product, as well as gain an understanding on how to tailor and localise them for other markets. In the future, these startups could also tap into R&D facilities and testing environments (sandboxes) that Singapore offers.
But it is not only Korean startups which would benefit from being exposed to Singapore’s ecosystem, local companies would also be to glean important technical knowledge from these startups and potentially enhance their own product. Collaboration, after all, is a two-way street.
All in all, with the South Korean government’s renewed commitment to innovation, Singapore’s status as a regional tech hub provides a good nesting ground for Korean tech agencies like GCCEI to enhance their pool of startups, equipping them with the necessary knowledge and skills to reach a global audience.
Disclosure: This article was written by the e27 marketing team, in collaboration with GCCEI