Incubation in Entrepreneurial Ecosystems

17. Singapore

Abstract

Singapore has a sophisticated incubation system, benefiting from strong government support, a dynamic business environment, and active participation from large corporates, investors, and research institutions. The incubation system is deeply embedded in Singapore’s wider entrepreneurial ecosystem, with Enterprise Singapore playing a key role in this through its engagement with ecosystem partners, the identification of mentors, and the creation of the Startup SG network. The Global Innovation Alliance’s acceleration programmes also offer valuable lessons for other countries in implementing soft-landing supports for internationalising startups.

Overall incubation system

Singapore has developed into one of the top entrepreneurial ecosystems in the Asia-Pacific region owing to strong government support and a dynamic business environment. Startup SG – established by Enterprise Singapore (then SPRING Singapore) in 2017 as a one-stop shop to showcase Singapore’s entrepreneurial ecosystem and make existing policy programmes more easily discoverable – indicates there are 220 incubators and accelerators active in Singapore. Services offered differ by type of incubator or accelerator, the sector and development stage, but typically include funding, mentorship and networking opportunities.

There are many different types of incubators in Singapore, including government-linked incubators, corporate incubators, and independent accelerators. The research system also plays a key role in the incubation system by contributing to the development of entrepreneurial talents, providing incubation programmes and partnering with corporates for the commercialisation of research (Prof. Wong Poh Kam et al., 2022[1]). These include leading Singaporean universities such as the National University of Singapore (NUS) and the Nanyang Technological University (NTU) but also research institutes in the Agency for Science, Technology and Research.

While incubators in Singapore are mostly sector agnostic, many prioritise technology-based startups in line with the government’s strategic priorities and the preferences of investors. According to Startup SG data, the most common sectoral focus areas for incubators are fintech, artificial intelligence and the internet of things. An example of a sector-specialised initiative is the accelerator programme provided by the cybersecurity hub launched by Singapore’s Cyber Security Agency (CSA), the Infocomm Media Development Authority (IMDA), VC Singtel Innov8 and NUS Enterprise.

Major policies for incubation

Government support for startups is structured using an ecosystem approach, simultaneously targeting startups and startup facilitators. In 2022, Enterprise Singapore supported 2 700 startups with access funding, incubation and mentorship programmes through Startup SG programmes and assistance from partners (Enterprise Singapore, 2023[2]). This is more than double the figure in 2018.

Enterprise Singapore has various programmes targeting incubators to help them to enhance their support offer to startups and scaleups. The Startup SG Accelerator programme provides accelerators with grant funding that partially covers their operating expenses and the cost of developing programmes. There is no specific cap on the grant size, and this support can also be extended to foreign incubators, accelerators and venture builders wishing to establish themselves in Singapore (STARTUP SG, 2023[3]). Another relevant initiative is the Startup SG Founder programme, which provides selected entrepreneurs with up to SGD 50 000 (approximately EUR 34 000) in matching grant funding alongside mentoring and potential additional funding from “Accredited Mentor Partners” (ACE, 2023[4]; NUS, 2023[5]). These partners are selected by Enterprise Singapore based on their incubation capabilities including their access to markets and funding (Enterprise Singapore, 2023[6]).

Another important actor is the Action Community for Entrepreneurship (ACE.SG), which is a trade association representing the interests of Singapore-based startups and the wider tech sector. Initially established under the Ministry of Trade and Industry (MTI) in 2003, ACE.SG was relaunched in 2014 as a national private sector led organisation. Each year, ACE.SG delivers 4-5 one-week immersive acceleration programmes to soft-land participant startups into targeted markets. During the week, the startups are providing with co-working spaces, networking with local investors, research agencies and incubators, and administrative support, include advice on local tax incentives and regulations. In addition ACE.SG offers incubation services for startups at an earlier stage of development. ACE.SG benefits from funding from the MTI, and also co-operates closely with Enterprise Singapore and other government agencies under the MTI.

Supporting the internationalisation of startups is an important priority in Singapore. The flagship schemes targeting startup globalisation are implemented within the scope of the Global Innovation Alliance (GIA), which promotes business growth through its global innovation networks and acceleration programmes across 21 cities (Enterprise Singapore, 2023[7]). The acceleration programmes support Singapore-based startups scaling abroad by connecting them with an accelerator in the local market, which are selected based on the strength of their local networks, their ability to facilitate strategic partnerships, and their track record in incubating startups. The application process is carried out in partnership with the selected accelerator in the partner country to ensure the startup, target market and partner accelerator are a right fit. Enterprise Singapore only partially subsidises the cost of the acceleration programmes for the selected startups, with the aim of ensuring the active engagement of participants. The acceleration programmes include business advice, mentoring, and connections to in-market partners. Support is also provided in navigating the regulations of the target market. The programmes are often structured in two phases, the first determining whether the targeted market is a right fit for the startup and the second focusing on the development of a market access strategy. Also falling under the scope of the GIA, the co-innovation programmes run by Enterprise Singapore share synergies with the acceleration programmes, often feeding into the pipeline of startups that go on to apply to the GIA’s acceleration programmes. The GIA co-innovation partners are also strategically distributed, aligning with the acceleration programmes' regions.

Incubators also have a role in attracting foreign talent to Singapore. Indeed, one of the eligibility criteria for individuals to apply for the EntrePass work visa is being a client of an existing Singapore-based and government recognised incubator or accelerator. These include incubators or accelerators in the Startup SG Accelerator Programme or Accredited Mentor Partners under the Startup SG Founder programme (Ministry of Manpower, 2023[8]). It should also be noted that the Startup SG Network is a valuable resource to connect ecosystem stakeholders and enhance the visibility of incubators. The Startup SG Network includes information about 4 500 tech startups, 510 investors and 220 incubators, allowing startups to explore potential partners efficiently and fostering collaboration between ecosystem players.

Conclusions and lessons for other countries

Singapore has become a thriving hub for startups, both local and foreign, with more than 4 500 startups and 31 unicorns as of 2023. The rapid growth of the Singaporean entrepreneurial ecosystem has been aided by robust government supports for innovation and entrepreneurship, a favourable business environment, and an abundant investor pool. Incubation is also a key part of the story, with the 220 active incubators and accelerators across the country playing a critical role in supporting the development of startups and scaleups. Particular strengths of Singapore’s startup support system include the ample opportunities to access mentorship and funding, as well as the availability of government-backed loans for startups. Strong collaboration between government agencies also favours a cohesive approach to policymaking, making public support programmes more easily accessible for startups and scaleups.

Incubators are integral components of Singapore's entrepreneurial ecosystem. The Startup SG Network has proven instrumental in promoting the incubation system by raising the profile and visibility of different incubators and creating opportunities for collaboration among startups, incubators and other entrepreneurial ecosystem actors. Incubators and accelerators also have funding opportunities through Enterprise Singapore programmes. Another important actor is the Action Community for Entrepreneurship, which delivers various incubation programmes and strengthens the connection between startups, policymakers and other entrepreneurial ecosystem actors, in close co-operation with Enterprise Singapore.

Supporting startup internationalisation is a major policy focus for Singapore, with incubation representing a key part of the government’s strategy for promoting global startups. The government facilitates outbound internationalisation with targeted programmes, particularly through the Global Innovation Alliance’s (GIA) acceleration and co-innovation programmes. With an extensive network of 21 nodes, GIA facilitates connections between local startups and international accelerators or research partners. The positive reputation and government backing that come with participation in these programmes provide startups with a distinct edge when entering new markets.

References

[4] ACE (2023), Tapping on Startup SG Founder Grant to grow your startup, https://ace.org.sg/tapping-on-startup-sg-founder-grant-to-grow-your-startup/ (accessed on 1 December 2023).

[2] Enterprise Singapore (2023), Enterprise Singapore: Annual Report 2022-2023, https://www.enterprisesg.gov.sg/-/media/esg/files/resources/publications/annual-reports/enterprisesg_ar2022_2023.pdf (accessed on 22 November 2023).

[7] Enterprise Singapore (2023), GIA Acceleration Programmes, https://www.enterprisesg.gov.sg/grow-your-business/innovate-with-us/market-access-and-networks/global-innovation-alliance/acceleration-programmes (accessed on 10 May 2023).

[6] Enterprise Singapore (2023), Startup SG Founder, https://www.startupsg.gov.sg/programmes/4894/startup-sg-founder (accessed on 1 August 2023).

[8] Ministry of Manpower (2023), Elegibility for EntrePass, https://www.mom.gov.sg/passes-and-permits/entrepass/eligibility (accessed on  2023).

[5] NUS (2023), Funding to give your comapany a headstart, https://enterprise.nus.edu.sg/funding/startup-sg-founder-grant/#:~:text=Startup%20SG%20Founder%20provides%20a,entrepreneur%20for%20up%20to%20%2450%2C000. (accessed on 1 December 2023).

[1] Prof. Wong Poh Kam et al. (2022), Global Innovation Hotspots: Singapore’s innovation and entrepreneurship ecosystem, WIPO.

[3] STARTUP SG (2023), Startup SG Accelerator, https://www.startupsg.gov.sg/programmes/4900/startup-sg-accelerator (accessed on 20 July 2023).