12 Mar 2021

CHUA Kee Lock, CEO of Vertex Holdings

Smart Nations Learn. Startup Nations Lead.

Innovation Ecosystem

COVID-19. While the pandemic has been a challenge in many ways around the world, it has also served to accelerate Singapore’s technological evolution. This is change indeed - the disruptive varietal.

From the budget announcement, it is clear that Singapore’s transformation to a Smart Nation remains a priority. Having doubled down on initiatives to encourage digital adoption amongst local companies, Budget21 also aims to provide local companies with a range of options to access capital sorely needed to innovate, transform and scale.

These are bold and progressive initiatives. But how should we evaluate Budget21?

From my perspective as a venture capitalist, the lessons of entrepreneurship and leadership come to mind. In the words of Mohammad Ali: “Everybody has a plan until they get punched in the face”. Most entrepreneurs are able to execute and manage well in normal times. The proof is in the pudding when it comes to entrepreneurs confronted with a crisis.

These watershed moments differentiate the great founders from the rest. Great founders are able to provide direction for the longer term and effectively run the company, and in the face of adversity.

From the recent budget announcement, it is clear that Singapore is adopting a tripartite approach of short (“cut cost”), mid and long term (“direction pointing”) measures.

In the short term, to keep safe our businesses and people. Over the longer term, to safeguard our economic progress, ensuring that we advance as one nation.

Importantly, that no one gets left behind.

All this while cultivating a greener, more self-sufficient and sustainable Singapore.

A case in point is the Green Plan 2030. This plan points direction to the world that Singapore is committed to playing our part towards sustainability - reducing our carbon footprint, and further solidifying Singapore’s status as the world’s greenest city.

When COVID-19 emerged last year, the first thing Singapore did was to roll out various initiatives to help our people and businesses adversely impacted. However, we recognized early on that this was not sufficient, that the pandemic could be protracted. Critically, that this crisis would also not be our last.

Unable to cope with the disruptive change unleashed by COVID-19, many businesses have failed. The urgent need to future proof Singapore, patently evident.

Looking ahead, we embarked on our journey to be a Smart Nation by encouraging digital adoption and transformation by local companies. For instance, in this year’s budget the government will co-fund the plans of Singaporean SMEs that adopt digital solutions and new technologies, as well as enter new markets. This includes the SGD 1 billion set aside for digital transformation schemes like the Emerging Technology Programme, Chief-Technology-Officer-as-a-Service (CTOaaS) initiative and Digital Leaders Programme. It is also supporting companies looking to scale by committing up to 80 percent to existing enterprise schemes.

We have also taken proactive measures to avail capital, bridging market gaps for technology ventures domiciled in the country. This includes efforts to step up risk-sharing arrangements with providers of capital and providing grants to support businesses across their lifecycle, including startups at various growth stages.

Another example is the Venture Debt programme, which the government will extend and enhance by raising the cap on loan quantum support, in addition to sharing up to 70 percent or risk on eligible loans from financial institutions. By extending this short-term debt initiative, startups will have better access to working capital that can fund their future growth, especially since they typically do not have significant tangible assets to pledge as collateral.

When the pandemic struck, many startups had to drastically reduce expenses and rationalize headcount to survive. While short-term, decisive cost reduction measures were needed to stem the downward spiral. Great founders did not lose sight of the potential growth opportunities to be seized in the wake of a crisis.

With the situation now improving, choices made by startup founders will differentiate the good leaders from the rest. A good leader is one able to continue thinking on his or her feet, deftly pivoting the business when required, advancing swiftly and effectively, against all odds. This may take the form of  business model innovation or via the adoption of new strategies.

In closing, I’m reminded of an advertisement sighted some time back: “Machines Learn. Humans Lead.”

For our startups and Singapore, my wish is that we are always a “startup” nation in our mindset, innovating and constantly driving change. Supporting societies and growing economies. Making the world a better place in our own “small” way.

Smart Nations Learn. Startup Nations Lead.  Let’s learn. Let’s lead.

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