China remains the undisputed champion of startup tech innovation and entrepreneurship in Asia. As the world’s most popular destination for venture capital funding and with its penchant for sprouting homegrown unicorns (private companies valued at $1 billion or more), China remains fertile breeding ground for startup entrepreneurship. Yet, beyond the merited attention placed on Chinese startups it is important to recognize that other Asian economies are also rapidly developing sustainable technology startup ecosystems.
For years Singapore and Australia, two of the most innovative countries in the world, have been important engines of startup innovation in the region. Singapore’s startup economy, which boasts an estimated 55,000 startups is ranked one of the most vibrant tech ecosystem in the world. Australia has even experienced faster venture capital investment growth than Europe and the US. Forward-looking government regulations in both countries, including the creation of well-defined regulatory regimes related to financial technology (fintech), have allowed for Singapore and Australia to continue to cement their position as regional fintech stalwarts. With more than 600 fintech startups calling Australia home and 490 in Singapore, both countries are not only regional leaders, but global pioneers in the sector.
While it may seem counterintuitive, Japan, home to Softbank, one of the world’s most well known venture capital investors, has lagged behind regional and global actors in regards to fostering startup entrepreneurship. Nevertheless, thanks to increased private investment and government-backed initiatives Japanese startup activity is on an uptick and it should be safe to assume that the 2018 IPO of Mercuris, Japan’s first unicorn, will not be an isolated event.
With an eye-popping 30,000 in-country new ventures as of 2017, South Korea continues to show positive signs of increased startup activity. The creation of a government-backed $9 billion venture fund to support Korean startups should inject strong stimulus into the startup economy. Also, despite the 2018 cryptocurrency boom and bust, Korea’s rapid ascent to become one of the world’s most active cryptocurrency trading markets is impressive, as is its spawning of one of the most active startup cryptocurrency exchanges in the world. While the future of cryptocurrency is still up for debate, out of the proverbial ashes of the cryptocurrency mania may rise a Korean pivot towards blockchain innovation, the technology underlying cryptocurrencies.
Both Vietnam and Indonesia are bright startup spots in Southeast Asia. Indonesia, which boasts the most unicorns in Southeast Asia, is home to four unicorns, Go-Jek, Bukapalak, Tokopedia, and Traveloka. Some even expect five more Indonesian unicorns to emerge in 2019. Not surprisingly, investors have taken note of Indonesia’s prowess; in 2012 Indonesian startups had raised a paltry $50 million dollars, but by 2017 that number had exponentially increased to $3 billion. As of 2018, Vietnam, with its nearly 3,000 startups, represented the third most active startup ecosystem in Asia. With supportive government policies and a rapidly growing economy, Vietnam is even home to its very own unicorn, e-commerce and gaming company, VNG Corporation.
As other regional economies continue to scale their startup ecosystems, the future prospects for Asia Pacific startup innovation remain promising
While China will likely remain Asia-Pacific’s innovation powerhouse, regional startup success is not a zero-sum game. As other regional economies continue to scale their startup ecosystems, the future prospects for Asia Pacific startup innovation remain promising. Opportunities for cross-border venture capital investments like Softbank’s bet on Indonesia’s Tokopedia or Singapore’s Grab, will not only multiply but draw attention from other investors seeking to capitalize on Southeast Asian entrepreneurship. Additionally, as Southeast Asian startups begin to search for new customers outside of their borders, such internalization, coupled with growing regional startup expertise, will benefit both consumers and companies seeking talent.
Ultimately, such vibrant regional entrepreneurial activity may result in an Asia-Pacific-wide startup powerhouse that shares talent, resources, and customers. Such a scenario has the potential to do wonders for regional growth, economic integration, and global innovation. If the present is any indicator of the future, it may not be too far away.