Startups association ACE calls for better access to funding, tech talent
SINGAPORE – A LOCAL startups association is calling on the Singapore government to ease access to foreign tech talent, as well as to strengthen funding and market access support, among other suggestions.
In a position paper on Tuesday (Jan 25), the Action Community for Entrepreneurship (ACE) identified 3 key challenges that Singapore startups currently face: a talent crunch, constraints in overseas expansion and difficulties in raising capital.
The paper, published in collaboration with PwC Singapore, taps the views of over 120 startups, founders, venture capitalists and government stakeholders. It will be presented to the government before the Budget on Feb 18.
To alleviate the talent crunch, ACE recommends that hiring foreign talent be made easier, by adjusting the ratio for local and foreign talent for startups.
“Startups almost unanimously agree that employing foreign talent is nearly impossible, given the current constraints on employment passes,” ACE noted in the paper.
To address this, the government could implement an alternative pass that would allow foreign employees to work in Singapore for up to 6 months.
ACE also suggests funding a dedicated 2 to 3-year university programme, co-designed with startup founders, to train students for careers in these fast-growing enterprises.
The association further hopes to work with the government to produce a directory listing vacancies in local startups.
While remote hiring is on the rise, this poses a risk to local intellectual property.
“The suggested directory, plus employment levy waivers, and short-term work passes can prevent loss of talent to other markets and ensure high-value ideas are retained on our shores,” ACE said.
Another key recommendation is to fast-track and streamline government grant processes. ACE recommends setting up a private and public sector panel to coach applicants and investigate obstacles faced by banks and VCs.
Some 69 per cent of startups surveyed perceive fundraising as a “difficult task”, with half of them taking 1 to 2 years to raise capital.
“Despite an array of funding programmes, many startup founders reported difficulty in qualifying for existing options and cited that they still must expand heavily on financial resources to get their ideas off the ground,” ACE noted.
Accelerating funding is crucial, as startups are often “running on a financial timebomb”, with a need to buy just enough time to execute ideas.
Likewise, market access also remains challenging with COVID-19 restrictions. New complexities from pandemic controls have dulled Singapore’s lustre as an expansion base.
On this front, ACE calls on the government to continue to build expansion platforms, such as the Global Innovation Alliance (GIA) by Enterprise Singapore and the Singapore Economic Development Board.
ACE added: “The government can seek to align on selected policies, such as personal data, so that local startups can heighten their presence internationally via like-for-like certifications.”
It is also mooted a “queen bee” approach to international expansion, whereby networks of startups could tag along with large corporations when conducting business overseas.
While only accounting for 0.57 per cent of the employed population, tech startups have contributed to 2.4 per cent of Singapore’s GDP, the paper said.
The Singapore government has thus far played a pivotal role in the success of Singapore’s startup ecosystem, ACE’s chairman James Tan noted in the paper.
“While the direction is clear, there is indeed much work ahead of us. As the nation’s startup trade association, ACE is determined to do its utmost to uplift our startup community and work with you to support this essential economic ecosystem,” Tan said.