Tech firms head to Singapore amidst Southeast Asia’s growth
Southeast Asia (SEA) is the new battleground for tech companies and it’s not hard to see why.
With the Association of Southeast Asian Nations (ASEAN) on track to becoming the fourth largest market in the world by 2030, opportunities for businesses are numerous. According to the e-Conomy SEA 2019 report by Google, Temasek, and Bain & Company, Southeast Asia’s digital economy may reach US$300 billion by 2025 – a US$100 billion increase from the same report’s projection in 2016.
The report also found that:
- Growth is unprecedented, yet unequal – seven metropolitan areas that house just 15% of the region’s population still account for more than 50% of the region’s internet economy. There is however, potential for areas outside big cities to grow twice as fast.
- The internet economies in Malaysia, Thailand, Singapore, and the Philippines are growing by 20 – 30% annually; Indonesia’s and Vietnam’s are growing in excess of 40% a year.
- Adoption of digital payments will cross US$1 trillion by 2025, accounting for almost one in every two dollars spent in the region.
- Despite global headwinds, more than US$37 billion of capital has flowed into the region’s internet economy over the last four years, with the majority going to e-commerce and ride-hailing unicorns.
SEA also stands out in an environment where developed tech markets are reaching saturation points and protectionism is gaining pace globally. It is no wonder that the region has seen a flurry of activity from both big tech players and startups
The Singapore difference for these tech firms
What all these players have in common is a presence in Singapore. The city-state is already home to 80 of the world’s top 100 tech firms. These include heavyweights such as Microsoft, LinkedIn, Google, Huawei, Baidu, and Tencent, artificial intelligence innovators like Nvidia and Yitu, as well as startups including Jakarta-based ride-hailing and logistics unicorn, Go-Jek, which houses its data science team in Singapore.
Here are some reasons why these companies are partnering Singapore in their Asia expansion:
- Singapore’s ecosystem and infrastructure promotes innovation
Firstly, some key stats about Singapore:
- Top tech hub in SEA,
- Ranked most innovative country out of Europe
- Best IP protection in Asia
- Ahead of countries such as China, Japan, and South Korea in the Economic Intelligence Unit’s Asian Digital Transformation Index, which evaluates how Asian economies are developing technology ecosystems, skills, and digital infrastructure
- Singapore provides the right talent
Singapore’s info-communications industry is expected to employ more than 210,000 professionals by 2020.
Amidst a global talent crunch, Singapore stands out for its ability to develop and attract world-class talent — the country topped Asia Pacific for the sixth consecutive year in INSEAD’s Global Talent Competitiveness Index 2019, beating others in Asia Pacific including New Zealand, Australia, Japan, Malaysia, and South Korea.
- The city-state is well-connected to global markets
A sprawling network of 22 bilateral and regional free trade agreements (FTAs) connects enterprises based in Singapore to the world’s major markets — a huge boon to tech firms navigating growing economic protectionism.
Riding the SEA wave
It is undeniable that SEA is a diverse region with varying paces of development across markets. The growth of startup ecosystems in the region’s respective markets has outpaced efforts of their governments, with many economies lacking the relevant legal and regulatory frameworks to support business operations. Limitations in infrastructure and tech talent are also real issues.
That said, tech companies cannot afford to overlook SEA. Evident from the companies benefitting from Singapore’s geographical advantage, talent and infrastructure sophistication, as well as its pro-tech business environment, companies need only know where to look.
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