GOVERNMENTS need to be agile and flexible in order to encourage innovation. This includes doing away with archaic regulations and nudging the private sector into action by taking on investment risks with them, said a panel of government officials at the RISE Corporate Innovation Summit in Bangkok. The two-day summit brings together experts from the public and private sector, as well as the startups space, to explore new trends in innovation.
Jonathan Lim, director of Global Innovation Network at Enterprise Singapore, said governments should not be doing things that the private sector can do. Instead, it should address the gaps in the ecosystem. (see amendment note)
"In Singapore, we firmly believe that if the private sector and the market are doing a good job, we should stay out of it. But we should come in to address some of the gaps that the private sector is not doing, which could be because the risk profile is too high," Mr Lim said during the panel discussion.
Speaking to The Business Times on the sidelines of the summit, Mr Lim acknowledged the trend of the government taking on risk through co-investments, such as the Economic Development Board looking at risk-sharing corporate venture and Seeds Capital, the investment arm of Enterprise Singapore, in appointing co-investment partners.
The government isn't in the business of picking winners, which is usually best left to the market, he explained. But when it comes to certain sectors such as medtech - which has an elevated risk profile - the government can ease the financing gap.
"It easily takes five to ten years for a medtech product to enter the market; it's a tedious process with regulation… In areas like medtech and hardware, we do come in and try to support that in a bigger way, because not many people are willing to take the risk at that early stage. So we do come in to bridge the gap in some areas where we think it's necessary," he said.
While the authorities' stance is to not interfere with the private sector, they are able to change rules that the private sector can't, Mr Lim said during the panel discussion.
In Bangkok, the startup ecosystem is just beginning to see signs of flourishing after several efforts by government agencies to spur entrepreneurial education, help startups with access to financing, and take a hard look at rules and regulations for businesses. Chinawut Chinaprayoon, vice-president and director of Thailand's Digital Economy Promotion Agency (DEPA), said many regulations and laws had to be changed to address the real needs and problems of startups and corporates.
He told BT separately that one of the more prominent moves that Thailand has taken is to kickstart a project called Regulatory Guillotine. "We try to kill all the processes that are redundant in the country," said Mr Chinawut. "Right now, in Thailand we have over 100,000 laws and regulations in place, and some of them stem from 50, 60 years ago; some of them were here since World War II. We have to change that."
Stuart Rees, trade commissioner at the Australian Trade and Investment Commission, agreed. Governments have to respond to new needs and technologies, he said. "Time and again, we see great technologies from startups that just quite aren't structured in the right way, that don't quite fit in to one of the programmes. We need to be more agile with public servants to make sure we don't lock in too many rules. That's important."
- The Business Times is the official Singapore media partner for the RISE Corporate Innovation Summit 2019, which takes place from March 28 to 29 in Bangkok.
Amendment note: An earlier version of the article stated Jonathan Lim's designation as director of Startup & Global Innovation Alliance. It should have been director of Global Innovation Network. The source error has been fixed.