Assessment of Entrepreneurship in Asia
According to Forbes, entrepreneurship has become entrenched in Asia. Advancements in technology and access to information have changed things dramatically. Asians broadly speaking are more aware of economic opportunities than ever before. For example, in the financial technology and big data field especially, opportunities in Asia far exceed those in the west. With eyes opened, fewer people are following the traditional path of joining an existing family firm.
Budding Asian entrepreneurs face many challenges. Access to capital is difficult, legal institutions in many Asian countries need to be strengthened to reduce uncertainty for entrepreneurs and those who fund them. Cultural values often reduce entrepreneurial aspirations. But, things are changing. China’s premier Li Keqiang recently told the World Economic Forum in Davos that “mass entrepreneurship and innovation” are needed to avoid a hard economic landing. His government is working to make it easier for people to start their own businesses.
The Global Entrepreneurship Index shows that China and India are strengthening their entrepreneurial ecosystems and creating billion dollar startups and Malaysia is emerging as a digital entrepreneurship leader. However, across the region, institutional variables need to be strengthened – “individuals are running ahead of policymakers.” India enjoyed the largest jump in the rankings, moving up 29 spots year-on-year to 69 out of 130. China moved up 12 spots to 48. Taiwan is 16, the highest in Asia, and Singapore is 24, virtually tied with Japan.
According to the GEN and Startup Genome's 2017 Global Startup Ecosystem Report, Asia is building thriving startup ecosystems. Singapore still ranks number one in talent which can be attributed to innovative policies and long-term thinking. Sydney is a rising entrepreneurial hub, with strengths in every ecosystem factor including strong exits, global networking, and funding. In China, Startup Genome reports that comparative strengths are now evident in Beijing and Shanghai. But, while Beijing is now home to a number of large scale-ups and Shanghai now ranks 8th globally in financing early-stage startups, a distinct lack of global connections among Chinese startups is also evident.
Southeast Asia is home to more than 600 million consumers, with six primary markets – Singapore, Indonesia, Thailand, Vietnam, Malaysia and the Philippines – standing out for growing economies and rising middle-classes of consumers. Google reported in 2016 that Southeast Asia now has 260 million internet users with 3.8 million more going online per month and forecasted that the region’s internet economy – business generated from the web – will be worth $200 billion by 2025. E-commerce alone is tipped to rise from $5.5 billion in 2015 to $88 billion in 2025, with half of that originating in Indonesia, the world’s fourth largest country. Southeast Asia possess a high level of entrepreneurial potential, alongside China and India.
With rapid development of infrastructure and high GDP growth being registered in many Asian countries, investments and deal flow will continue to increase. Thinkgrowth.org reported that across Asia, more than half of mergers and acquisitions that took place since 2011 occurred in 2015 with Indian startups raising $9 billion in 2015 alone.
In addition, many governments have established goals for entrepreneurial development, and high-levels of academic achievement and university education are signs that Asia’s startup boom has yet to see its peak. This is all clear evidence of Asian startup-renaissance.
However, in order to advance entrepreneurial development across the region, a central hub is needed to coordinate stakeholders relative to creating a united interface with the rest of the world, use information about best practices and research findings, and foster greater collaboration among ecosystem builders throughout our region.