Sourcing innovation in Singapore: Capturing value through startups

startups, procurement and singapore

Singapore is awash with startups. The low-tax South-east Asian economy has historically played host to multinational companies’ regional HQs where they have enjoyed the country’s light touch regulation and stable environment, but this role is increasingly changing and is focusing more on sourcing innovation.


But, despite the promise of opportunity, actually uncovering and developing innovations in the city-state is not simple and is full of pitfalls. If you know the local market and where to look, however, you can ensure your company sources the newest technologies before they end up disrupting your business.


Although the city-state’s population is a mere five and half million people, it boasts more than 4,000 startups and more than 200,000 SMEs. The World Bank regards the city as the second-best place to do business in the world behind New Zealand. The local startup scene attracted over (US)$10bn worth of investment finance last year alone.


The tiny state pulls in almost two-thirds of investment across the entirety of South-east Asia. This is enabling local startups to displace the darlings of Silicon Valley across the region: Grab has outcompeted ride-hailing service Uber and Carousell is rivalling online auction site eBay.




Many companies are looking to create their own innovation hubs in Singapore to try and better coordinate the internal generation and development of new ideas. This places significant pressure on operational and technological staff. For most companies, the strain to forge lean structures precludes the option of investing in any resource-intensive punts, which may ultimately deliver no value.


This has led some organisations to effectively outsource their innovation efforts by tapping into the startup scene. Companies like Accenture, Citibank and Unilever are just a couple of examples of organisations who have created local innovation hubs to try and speed up the development of innovations.


The Singaporean government has long been committed to providing a conducive environment for startups and those who want to work with them. But significant challenges remain, especially around red tape.


Enterprise Singapore is a good place to start for those organisations looking to obtain governmental support. Although no published guidelines exist in terms of evaluation, those that build local technological capacity or enhance talent potential tend to be viewed more favourably. For instance, funding for the development of a new startup technology or the training of that system’s implementation in a multinational organisation are more likely to be viewed as initiatives that should receive financial support.


Moreover, a few organisations exist to connect project development with government. Supply Chain Asia acts to triangulate multinationals, the government and local startups to ensure innovation is implemented.


But such initiatives place pressure on procurement teams, who may be unaccustomed to managing the peculiarities of innovation, let alone understand the contexts of the local market. If procurement wants to avoid any challenges they have to get to grips with local peculiarities.


Connecting with the local startup community


The principal challenge in sourcing innovation is finding the capabilities that exist within the market.

Singapore’s start-up environment is vibrant, but diverse. But startups tend to have just enough resources to sustain their going concern. Marketing, sales and any promotional activity is regarded as a luxury.

As a consequence, few outside that company tend to be aware of their existence and potential value.


To try and better link multinationals to them, the Singaporean government has rolled out a range of support organisations.


Startup Singapore is a government run agency that connects multinationals to local SMEs through events, mentoring programmes and accelerators.


ACE, another organisation linked to the government, provides office space and marketing support.


SGInnovate meanwhile focuses on assisting emerging technology companies to attract financing and growth in the international market.


The boom of startups has also fuelled an expansion of shared office spaces dedicated to new and emerging SMEs. Alongside the global behemoths of WeWork and Spaceworks, local alternatives such as JustCo and Found8 provide support, networking and community for their tenants.

Implementation and troubleshooting


The value of an innovation initiative is in the execution. In any organisation, there are many ideas that can solve challenges, but there are also organisations that are working on the same solutions. The skill for procurement is to identify the winning idea and develop that throughout all the stages of innovation. This should look beyond simple ideation. It requires a broader engagement into building capacity within a startup. Startups will need technological help in product development, but they will also need commercial support around sales, marketing and operationalising their idea. Any organisation promising that support will stand as an attractive partner.


That being said, there are several pitfalls to observe if you are looking to use Singapore as an innovation hub. Other hubs are emerging throughout Asia-Pacific.


Regional cities such as Beijing and Hong Kong are also offering a strong support environment and Tokyo has been recently ranked as the most innovative city in the world.


Furthermore, although Singapore’s environment is ideal for early-stage startups, there are some obstacles that prevent them from scaling up. Over recent years, the government has been raising barriers for working visas. Where once a degree and a job offer was sufficient to enable a foreign worker to join a new enterprise, policy-makers are becoming increasingly pickier around immigration. Expatriates from overseas need to demonstrate deeper credentials and, as a consequence, the approval process has lengthened.


For startups looking to scale from 10 to 50, or even from 50 to 200 staff, this can put pressure on growth ambitions in the long-term or even order fulfilment in the short-term. This should be a consideration for those organisations that are only interested in involvement in startups past Series A, where the focus is chiefly around scaling and expansion.


But, one advantage Singapore will always have over other cities in the region is its location. It is a bridging point between Europe and east Asia and shares timezones with western US. Its chief role, for many procurement organisations, is to host purchasing hubs that are primarily tasked with sourcing from China as well as emerging economies in South-east Asia. The Asia-Pacific region is often viewed as a sandbox environment to test out ideas before global implementation. The city can provide a seat for running pilots in local countries to identify teething issues early on. Once these problems have been ironed out, Singapore can act as a launchpad to roll out innovation internationally.


This article is a piece of independent writing by a member of Procurement Leaders’ content team.