Armed with incentives, Singapore has been increasing its efforts to get technology businesses and investors interested in the country.
Companies and government officials say the goal of the campaign is to make Singapore into a high-tech center.
But now, the city-state is turning its attention to finding skilled workers, and even the government says its work is not done.
U.S.-based investor Paul Bragiel said he had to be asked three or four times before he accepted an invitation from Singapore to come see its tech industry.
Bragiel made the nearly 13,000-kilometer trip from the United States in 2010. Back then, he said, the city-state’s chances of becoming a leading Asian tech center were “bleak, to say the least.”
But he saw some promise, and like many other investors and tech companies since then, he was attracted by generous terms from government agencies.
“They gave us a very aggressive deal. Very few countries would have matched it,” added Bragiel. He also considered Hong Kong and Tokyo for an Asian expansion before helping to set up Golden Gate Ventures in Singapore in 2011. The Reuters news agency reported that he would not say what the terms of his deal were.
Golden Gate Ventures is a venture capital company. It connects investors with startup companies and other businesses.
Singapore, Southeast Asia and the tech industry
Singapore is one of the smallest nations in Southeast Asia.
Internet users in nearby Thailand, Indonesia, the Philippines and Malaysia spend four hours or more every day on mobile internet. That information comes from a 2018 study by social media platform Hootsuite.
Manufacturing, finance and insurance businesses made up more than a third of Singapore’s $356 billion economy last year.
The information-communications sector, which includes tech companies, represents about 4% of that total. But it is growing faster than any other sector, based on information released last week.
Information and communications grew at about 6.6% in the first three months of 2019. The next fastest of the nine sectors Singapore follows was finance and insurance at 3.2%.
Chng Kai Fong is managing director of Singapore’s Economic Development Board, or EDB. The EDB is the government agency that negotiates some deals between local companies and foreign investors.
Fong said he is now hoping to attract “Jedi Masters”, or high-level tech people, to Singapore. With the help of those “Jedi Masters,” he hopes can finally turn Singapore into a major tech center.
Details on the deals negotiated with the EDB are hard to come by. The government makes businesses sign nondisclosure agreements, noted companies, advisors and officials.
Tax holidays, financial aid for research and development and co-funding for investments are among the incentives from different agencies, they added.
The secretive nature of the deals means it is unclear how much the country spends to attract such companies and whether it proves profitable.
Challenges and criticisms
Yet a number of issues remain. Some tech companies have expressed concern about Singapore’s recently passed fake news law, which critics say could limit free speech. Alphabet’s Google said it was worried the law would hurt innovation and the growth of the digital information ecosystem.
Also, Singapore only has a single local “unicorn” - a startup worth over $1 billion - in ride-hailing company Grab. That information comes from researchers at CBInsights.
Indonesia has four such “unicorns:” taxi app Go-Jek, travel website Traveloka, and market places Bukalapak and Tokopedia. Hong Kong has two, in online travel agency Klook and logistics business Lalamove.
At a time of tensions between the United States and China, Singapore seems to be on neutral ground while still enjoying free trade with both. Last year, the city-state added a free trade deal with the European Union.
Political issues also threaten to pull Hong Kong further under China’s influence, which should help Singapore, noted one banker.
For Bragiel, any concerns he had about Singapore almost 10 years ago are long forgotten.
“Silicon Valley attracts the whole world; Singapore is catching up,” he said.
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Words in This Story
incentive – n. a thing or action that motivates someone to do something
bleak - adj. not hopeful
attract – v. to cause to have an interest or liking in something
generous – adj. showing a willingness to give more of something
match – v. to be equal to something
mobile – adj. able to move or moved easily
insurance – n. the act of a company promising a guarantee of payment for a loss, damage or health condition
nondisclosure – n. legal term - failure to report information
fake news – n. news stories that appear to be news, but which are often sensational and have factual mistakes
innovation - n. the act or process of proposing new ideas, devices, or methods