Singapore businesses are more willing to invest in new technology and govt policies have made it easier for start-ups to thrive
by FARA AISYAH/ pic by TMR
LOCAL talents in the technology sectors are moving to Singapore for better opportunities especially for start-up companies, industry experts say.
Alsid technical director for Asia Pacific and Japan Kenneth Teo said the maturity of the tech industry in Singapore provides a fertile ground for startups to flourish.
“Both Malaysia and Singapore are attractive for new start-ups to establish their bases. However, I see a better business opportunity in Singapore because businesses are more willing to invest in new technology and government policies have made it easier for start-ups to thrive,” Teo told The Malaysian Reserve in a recent interview.
Teo added that from his experience, companies in Singapore are more willing in adopting new technology, while its neighbours usually adopt a ‘wait-and-see’ approach, thus hindering early progress for tech firms.
Although lower tax for companies in Singapore could be one of the reasons for the move, he does not think that it plays a significant part.
“I don’t think companies were drawn in to Singapore just because the tax is lower. It is good to have many benefits, but business competitiveness and maturity are more important.
“That said, I think Malaysia is quite competitive in terms of access to regional markets. The cheaper air transportation and office rental offset the potential higher tax in Malaysia,” Teo added.
Another industry expert said startups choose Singapore over Malaysia due to two core reasons which are availability of funding and key talents.
“Key talents are available in Malaysia, but due to the stagnating salaries, talents are more open to relocating to other countries that provide better opportunities,” the expert said.
According to him, there were fewer than 20 published investments in the start-up sector in Malaysia last year, while Indonesia had more than 25 and Singapore had more than 90 deals.
Last year, Finance Minister Lim Guan Eng said the government was working to woo back local talents in Singapore to return home.
Some notable names of talents who have shifted their operation to Singapore in recent years include Anthony Tan (picture), the Malaysian-born who founded the e-hailing firm, Grab. The company relocated to Singapore in 2014.
Singapore’s proptech company Ohmyhome was founded by Malaysian sisters, Race and Rhonda Wong.
The industry expert said the Malaysian government needs to invest more in the tech sector, either through establishing its own start-ups’ fund or utilising the state-owned enterprises to invest in start-ups.
The expert added that the government needs to understand that investing in start-ups in the tech sector does not benefit only the sector, but can potentially impact the whole economy.
“In Indonesia, start-ups such as Gojek, Traveloka and Tokopedia started the trend of paying people better, causing overall growth in salaries of the sector. This can potentially replicate, with start-ups starting to pay better salaries in Malaysia and leading to the elevation of salary for Malaysian workers in general, starting from the big cities. This will also help talent retention in Malaysia.
Teo further said the policymaker needs to first reflects on its governance. “Create a business-friendly policy and have a mind of its own, instead of ‘wait-and-see’ how Singapore responded to these challenges.”