Technology Entrepreneurship in ASEAN: Opportunities and Challenges

NUS Entrepreneurship Centre

1

Technology Entrepreneurship in ASEAN: Opportunities & Challenges

Wong Poh Kam Professor, NUS Business School

Director, NUS Entrepreneurship Centre

All content © 2013 NUS Entrepreneurship Centre. This file may be freely shared in its entirety as long as the attribution of copyright is intact.



The ASEAN Region:

• Large and Fast Growing Market, but Fragmented • Rich Diversity, but Complementarities Under-Realized due

to Under-Integration • Large Diasporas in Advanced Economies, but Under-

Developed Entrepreneurial Linkages

A Conundrum of Under-Exploited Opportunities

© WONG Poh Kam


ASEAN: A Dynamic Region of 600 Million People & US$2 Trillion Market

3


Market Size only slightly less than India (in PPP terms)

4

Source: The Asean Secretariat, ASEAN Economic Community Chartbook 2013, Jakarta March 2014


GDP in US$B PPP vs. Real GDP growth, 2012

5



Trade Growth: Faster External than Internal

6



Trade as % of GDP

7



Strong Net Inflow of DFI into ASEAN

8



On a Per Capita Basis, DFI in ASEAN is comparable to China

9


…A rapidly rising Middle Class

10

NUS Entrepreneurship Centre …and Rapid Growth of Online Users in ASEAN

11

Source: UBS


The Vision of ASEAN Economic Community (AEC) 2015

12



13 13

Total Entrepreneurial Activity (TEA) Rates for ASEAN Countries 2000-2013

1Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business Source: GEM

Total early-stage Entrepreneurial Activity (TEA)1 (%) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Indonesia 19.3 25.5 Malaysia 11.1 4.4 5.0 4.9 7.0 6.6 Philippines 20.4 18.5 Singapore 4.2 6.6 5.9 4.9 5.7 7.2 4.8 6.6 11.6 10.7 Thailand 18.9 20.7 15.2 26.9 19.5 18.9 17.7 Vietnam 15.4


14 14

TEA1 Rates for ASEAN Countries 2009-2013: Except for Singapore (& Malaysia), Dominated by Rural Self-Employment & Low Growth Urban Small Businesses

1Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business Source: GEM

Indonesia

Malaysia

Philippines

Singapore

Thailand Vietnam

0

5

10

15

20

25

30

2009 2010 2011 2012 2013

TEA

(%)


TEA (Early-Stage Entrepreneurial Activity) Rate and GDP per capita, 2006

0%

5%

10%

15%

20%

25%

0 10,000 20,000 30,000 40,000 50,000

GDP per Capita 2006, in Power Purchasing Parities (PPP)

Pe

rce

nta

ge

of

po

pu

lati

on

be

twe

en

18

-64

ye

ars

Early-stage Entrepreurial Activity (TEA rate) 2006TEA rate United Arab Emirates Fitted 3rd order polynomial - Arab Emirates and Peru excluded

ES

USIS

DK

AU

CA

FI

BE

SEDE

JP

NL

FR

UK

ITSI

GRCZ

HU

ARMY

HR

CLLV

SA

RUMXTR SG

UY

INBR

TH

CN

ID

JA PHCO

UA

IE

NO

FR

Source: Wong(2007)


16

Growing Exploitation of Technology Entrepreneurial Opportunities

• Rapid Growth of Technology Start-Ups • Significant Increase in Venture Capital Funding &

Venture Intermediaries • Growing Inflow of foreign entrepreneurs into the

region • Improving Government Support for

Entrepreneurship Ecosystem Development • Growing Visibility of “Successful” Exits …But Pan-ASEAN Opportunities Remain Under-Exploited

© WONG Poh Kam


17

Formation of High Tech firms has outpaced that of non High Tech firms in Singapore since 2004

KEY POINTS • In last five

years, formation of high-tech firms has outpaced formation of non high-tech firms.

• Growth in new high-tech manufacturing firms has been especially high.

4.24.7

3.6

6.5

2.3

9.0

4.2

5.7

4.2 4.5

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

1999-2009 2004-2009

Ave

rage

Ann

ual G

row

th (%

)

ALL Sectors

All High-Tech

High-TechManufacturing

High-TechServices

Non High TechSectors

Source: Wong P.K. (2011), NRF Study of High Tech StartUp in Singapore

© WONG Poh Kam


Start-up* Share of Singapore Employment (2004 - 2009)

2004 2005 2006 2007 2008 2009 2004-2009

No. of employees in start-ups 152,805 164,886 191,256 241,874 292,324 306,242 1,349,387

Total no. of employees in

Singapore 2,238,100 2,266,700 2,505,800 2,631,900 2,858,100 2,905,900 15,406,500

6.8 7.3 7.6

9.2 10.2 10.5

8.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2004 2005 2006 2007 2008 2009 2004-2009

% o

f Sin

agpo

re

empl

oym

ent

* Young firms less than 5 years old Source: Wong Poh Kam et. al. (2011), Study on High Tech Start-Ups in Singapore, Research Report commissioned by NRF

© WONG Poh Kam


19

Source: Monk’s Hill Ventures http://www.monkshill.com/views/2014/8/11/startup-acquisitions-in-asia-southeast-asia

Growing Tech M&A Exits in S.E. Asia


20

Some Recent VC Fund Entering ASEAN Economies • Singapore

• Jungle Ventures • Monk’s Hill Ventures • Golden Gate Ventures (US) • Rakuten Ventures (Japan)

• Indonesia • Indigo Fenox Incubator (Fenox Venture Capital (Japan) & Telkom) • East Ventures (Japan) • Sovereign’s Capital (US)

• Thailand • ArdentCapital (Siemer Ventures (USA), RSP (Japan) & GMO

Venture Partners (Japan)) • Malaysia

• Straits Fund I (Elixir Capital (US))

© WONG Poh Kam


21

Examples of Recent Exits • Singapore

• Non-Stop Games, acquired by Candy CrushSaga Maker King (US) • Zopim, acquired by Zentek (US) for US$30 Mil Cash & Stocks • Viki, acquired by Rakuten (Japan) for US$200 Mil • TenCube acquired by McAfee (US)

• Indonesia • Detik.com acquired by Para Group (Indonesia) • Maxitech acquired by Corous360 (Singapore) • PriceArea acquired by Yello Mobile (Korea)

• Malaysia • Jobstreet acquired by Seek (Australia) for US$523.5 Mil. • MOL (filed for US IPO listing US$300 Mil)

• Thailand • Tarad.com acquired by Rakuten (Japan)

© WONG Poh Kam


22

Overcoming Market Fragmentation • Development of Pan-ASEAN Venture Capital Funds • Development of Cross-Border Linkages between Early

Stage Investors • Entrepreneurs with Regional Connections and Global

Visions • Increasing Networking & Exchange among university

students in ASEAN countries to facilitate Pan-ASEAN startup team formations

• National Policies facilitating entry of foreign entrepreneurs in general & Intra-ASEAN entrepreneurial linkages in particular

• Acceleration of the Implementation of the AEC Vision

© WONG Poh Kam


23

Promoting Pan-ASEAN Technology Entrepreneurship Development: Some

Initiatives by NUS Enterprise


24

ASEANpreneurs: An Initiative of NUS Entrepreneurship Society (NES) Supported by NUS Enterprise


25

e27: A media & event company focused on Southeast Asian tech entrepreneurship community founded by NUS alumni and incubated and invested in by NUS Enterprise


26

Asian Business Angel Forum (ABAF): Annual Forum to bring Angel Investors from around Asia together to promote cross-border investing

ABAF 2014, Hong Kong

ABAF 2013, Mumbai

Inaugural event in Singapore organized by BANSEA & NUS Enterprise


27

ASEAN-Silicon Valley Entrepreneurial Network (ASVEN) – an NUS Enterprise Initiative to build entrepreneurial link between ASEAN & Silicon Valley


THANK YOU &

Q&A

Technology Entrepreneurship in ASEAN: Opportunities and Challenges

Business

Transcript of Technology Entrepreneurship in ASEAN: Opportunities and Challenges