The Startup Journal #3 extra: An Overview of the Startup Ecosystem: What to learn from Singapore’s scene.
“According to a 2017 report by US-based Startup Genome, Singapore has overtaken tech mecca Silicon Valley as the world’s number one for startup talent.”
In the years leading up to and after its independence in 1965 and by the same time Algeria took its own independence, Singapore’s economy was solely based on trade and entrepot. This nation, in order to survive, had to find means to leapfrog technologically to make up for the constraints of its physical and resource limitation.Now 50 years later, Singapore is the Asian version of Silicon Valley and called Entrepreneurs paradise. So what led Singapore to where it is today? Why is Algeria behind on the tech industry even though we have so much youth and talent? And what can we learn from it?
Various facilitating factors have enabled Singapore’s rise but much of the credit for these factors goes to the startup-friendly policies and the effort established by the Singaporean government, and this is what our article for the day treats.
How does the Singapore government support the country’s startup scene?
Business-incubating infrastructure, tax incentives, cash grants, or financing schemes; everything that a new company desires, Singapore’s government has made it happen.
In fact, in the last four years, the Government has rolled out several initiatives to propel the nation towards a more thriving startup ecosystem.
- In march 2017 they launched Startup SG, a program unifying all support schemes for entrepreneurs. It provides them with a platform to access local support initiatives and connect with the global entrepreneurial network. Startup SG is your go-to source for loans, grants, funding, and capability-enhancement.
- Meanwhile, the country’s Economic Development Board runs the Global Innovation Alliance (GIA), which maintains connections with major innovation hubs around the world and government-supported landing pads in established markets such as Germany, Australia, Japan and Korea, and negotiates funding agreements with willing counterparts to support co-innovation between local startups.
- These partners are private industry leaders called AMP “Accredited Mentor Partner”, appointed by the Singaporean government to identify qualifying applicants based on the uniqueness of their business concept, the feasibility of the business model, the strength of the management team and potential market value, those who succeeded the application process are rewarded with advice from the AMP’s learning programs and networking contacts.
- The country also provides a competitive atmosphere that both demands new talent and lures in would-be students by organizing tech startup competitions and hackathons such as Slush Singapore (South-East Asia’s premier startup launchpad), Startup Elevate and SLINGSHOT.
Now that we know how the Singaporean government supports its tech ecosystem, let’s dive into what Algeria lacks in this domain.
Where do we lag?
While we can’t deny that the tech startup scene in Algeria is slowly seeing the light, there are also a lot of challenges and difficulties standing ahead of Algerian entrepreneurs that simply can’t be ignored, such as :
- Lack of funding :
Cash is king for startups! Even a successful business model will fail without proper cash flow, and lack of funding in Algeria is the first issue that a startup stumbles upon.
According to Sidi Said, a co-founder of an education platform called “Dirassatti”, in his interview with Wamda, funding a startup was still mission impossible in Algeria. “Business angels don’t exist, banks are very cautious, governmental programs don’t cover these types of investments.”
- Absence of online payment systems :
E-commerce businesses are suffering from weak growth in the Algerian market and that is due to a lack of vital tools such as e payment and strong internet connection.
- Lack of government schemes that really support tech startups.
- As for the competitive atmosphere, we are already seeing an emergence of events and competitions for students in entrepreneurship, and other initiatives organized by students themselves or by the ministry of startups but they still aren’t seeing tangible and remarkable results.
In spite of these obstacles, we are seeing a lot of small online businesses booming especially during this crisis such as online delivery services, medical consultation applications, ride-hailing companies …
And earlier this year also, we saw the announcement of some schemes from the Algerian government that consist of :
- The creation of a National Innovation Council.
- Organization of network events in order to promote small businesses and startups.
- Creation of seed-funds dedicated to startups and innovation.
- Implementing E-payment systems in Algeria.
What should we learn from this case study?
having discussed the reasons for Singapore’s success and what Algeria’s startup ecosystem lacks, what can Algeria learn to follow in Singapore’s footsteps :
Access to Capital
The availability of capital is key for startups to grow. Startups can bootstrap for a while but as fast-growing organizations scale rapidly, their ability to raise the investment quickly becomes crucial in their lifecycle. Hence, access to capital through business angels, investors, venture capital, from early seed money is always a major hurdle, that is why our government should take actions such as :
- Engage public funding schemes with large Algerian and Global corporations to create and develop public-private investment funds for early-stage funding of Algerian startups.
- Foster the emergence and development of digital crowdfunding platforms specific to Algerian startups seeking high growth.
Tax and Regulatory Environment
Contrary to Singapore’s policies that facilitate creating startups, Algeria has heavy fiscal and regulation rules, that creates difficulties for startups to grow so the action to take is to :
Create and develop a digital portal with best practices related to friendly taxation and regulatory environment.
Education and Entrepreneurship skills
Algeria definitely should incorporate Entrepreneurship Education as an important theme at our universities in technological / science domains but also in other areas like healthcare Agriculture and food, finance, etc…
References
13 Startup schemes and grants in Singapore
