SINGAPORE IS WORLD'S TOP START-UP COUNTRY BY VC FUNDING PER CAPITA

Singapore has the highest venture capital funding for start-ups in the world. Before we pop the champagne, this is on per capita basis. This is to be expected of a city state with a small population base.  Nevertheless, on per capita basis, Singapore's VC funding of US$1,060 for each resident is far ahead of the competition. In 2nd place is US which is far behind  with US$345.

PitchBook made a 2024 ranking of VC Ecosystem of 50 global cities sourced from their own database. It is based on the size and maturity of the start-up networks in the cities.

Other Highlights:

On overall 'Development Scores', the top three are San Francisco, New York, and Beijing. Singapore lies at 14th with Hongkong at 26th.

Singapore ranks 2nd in terms of 'Growth score'. The Chinese city of Hefei ranks #1 with a score of 86.5 compared to Singapore's 74.8.

Based on 'Development Scores', these top 50 cities are distributed across 12 countries:

20	US	1	Brazil
11	China	1	Hongkong
6	EU	1	Israel
3	Canada	1	Japan
3	India	1	Seoul
1	Australia	1	Singapore

On the rivalry between US and China, the Chinese are still far behind. The US had capital raised of $873b and deal count of 55,023 compared to China's $476b and 32,914 respectively.

The 3 IT centres of India are Mumbai, Bengalaru and Gurugram. Most of our CECA tech foreign talents are likely from these cities.

Details of the top 14 cities are show in the table below. Singapore's position for each measurement factor is also shown.

(Development and Growth scores are based on data related to deals, exits, fundraising and other factors from the last six years.)

The government had set its sight on building Singapore as a high-end technology Hub as an important engine of growth and betting on technological advancements to spur innovation. The rankings is testament to policy success and Singapore's high 'Growth Score' points to a positive future for the sector.

Nurturing a start-up ecosystem requires heavy investments in hardware and software infrastructures. State of the art communication capability is a must, thus the rush to 5G - the optic of being first mover matters. We want to be seen as first adopters of all things in the tech world. We are the first country to approve cell-cultured chicken. We need to have the legislation necessary for the new digital era - laws on e-contracts, protection for intellectual properties, cell-cultured food, etc. We need to make the island a socially bustling metropolitan that is a livable place for an international workforce. Taylor Swift tour is just a part and parcel of all this. What is also needed is an extremely business-friendly government and of course easy foreign labor visa regulations.

A start-up ecosystem is a melting pot of entrepreneurs, founders, VC companies, bankers, specialist lawyers and bankers. All deal makers and investors who want a slice of the opportunities seek to entrench themselves into this highly networked ecosystem.

Currently there are 5,137 start-ups in Singapore. They are listed here.

Looking through the non-investing Singaporean layman's lenses, there are some concerns.

One recalls Minister Edwin Tong had to invest millions of dollars to entice Taylor Swift to stage her tours in Singapore. To build the infrastructure for start-ups, the government spends billions over the years. How much has Enterprise Singapore and other agencies dished out by way of grants and soft loans to attract these companies here? We are talking of billions of taxpayer dollars. There is no balance sheet reporting.

For a small country it makes no sense to be purely a passive hub for start-ups of tech plays which are highly mobile when they exit and has no advantage to be domiciled in a country with the highest cost of operation.

Singapore offers no advantage to set up an industrial base. There are understandably no heavy tech plays in the island. Heavy Tech start-ups are all happening in China, which are driven by government funding in industries aligned to their long term economic strategy, such as in semiconductor, electric vehicles, 5G commercialisation, vaccine application, chip manufacturing, etc. Heavy tech plays promise the job creation Singaporean layman wants. A search at the list of Singapore start-ups show mostly e-platforms, fintechs, and low headcount service related plays.

Obviously the government hopes to develop indigenous innovation capability in the long term. In line with this, Singapore has developed a strong framework for protection of intellectual property. As early as 2016 the WEF, in its Global Competitiveness Report, ranked Singapore number two in the world for IP protection. But what does this all mean to the man on the street. How does this translate to the real economy?

GreyB Services, a specialist consultancy outfit, did an analysis of patents registered in Singapore for the 6 years 2015-2020 which showed some interesting pointers. There were a total of 88,859 INDAPOC Families of patents filed in Singapore. Patents that originated from Singapore numbered only 7,872 or 9%. The bulk of the patents were priority foreign counties - US 48%, Japan 17%, EU 10%, China 5%, Others 11%.

GreyB parsed the data to see who were the 5 top patent filers originating from US, Japan and Singapore :
US : ExxonMobil (1,146), Qualcom (1,105), LAM Research Cor (499), Saudi Aramco (495) and Novartis (468).
Japan: Mitsubishi (894), Disco (427), Toshiba (401), Sumitomo (178), and Hitachi (378).
Singapore: A*star (1,232), Mastercard (586) Halliburton (290), National University Singapore, (280), and Nanyang Tech University (170).

The top 5 filers of patents originating in US and Japan were all corporations and none from academia. Filers originating in Singapore were academia and government research institution A*star and 2 foreign owned corporations.

It is common for corporations to collaborate with academia to benefit from their R&D resources and scholars. It seemed A*star, NUS and NTU were collaborating with many well-known international names like IBM, Huawei, MIT, as well as local government agencies like Singapore Health Services. Where are the indigenous corporations.

The point being made here is this. The government spends vast sums of money promoting R&D and patent filing. It allocates billions of dollars for each Five-Year Science & Technology plans. For example the Research, Innovation and Enterprise 2020 Plan has a budget for an astounding S$19b. The government largesse for R&D and patent filing, is to encourage indigenous corporations develop R&D capabilities and hopefully breaking out as start-ups to commercialise their ideas, thereby contributing to the economy and creating jobs. However, the glaring absence of home-grown corporations benefitting from government largesse has Singaporeans wondering what's it all about.

The hive of activity of the start-up ecosystem is a boon to the rentier and financial economies and the international investment community. The Payback to the real economy does not seem to be obvious.

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