Australian startups and established tech companies are heading to Singapore to find funding, business partners, and customers in a region where the government has invested years into becoming Southeast Asia's Silicon Valley.
According to Gemma Manning, founder of Sydney-based Gemstar Technology, some Australian companies can find it easier to expand by tapping into Singapore, where the government has pumped AU$1.72 billion into innovation.
Manning, whose company is taking six Aussie firms on a trade mission to Singapore this week, hopes the Australian government will choose the city-state as one of five global Landing Pads that formed part of its AU$1.1 billion National Science and Innovation Agenda, which covered more than 20 measures centred on its "Ideas Boom" rhetoric.
Last month, Assistant Minister for Innovation Wyatt Roy announced the first three locations for the government's AU$11 million startup landing pad initiative, aimed at accelerating Australia's access to international business networks, entrepreneurial talent, business development, and investors by creating a unique ecosystem for innovation to thrive.
Silicon Valley was revealed as the inaugural landing pad location, with the initiative taking up tenancy at RocketSpace technology campus in San Francisco; Tel Aviv was named as the second host city; and the third is pencilled in for Shanghai. The remaining two are expected to be positioned in Europe and in another capital city in Asia.
"I feel positive and more inspired by what we are doing now as a nation in terms of innovation. But we have a long way to go and I think countries like Singapore can't be ignored when we are looking at policy and how to create these ecosystems," Manning said.
"The funding environment is very attractive, as is the drive for public-private partnerships. They want to commercialise technology to help drive their future income."
Singapore placed ahead of Australia in the 2015 Global Innovation Index, slotting in at seventh while Australia came in at 17th.
Previously, Roy said Australia is yet to have the networking density that Silicon Valley has. On a recent visit to Tel Aviv, the 25-year-old assistant minister said there was a strong cultural element in Israeli innovation that Australia can learn from.
"I've often said that we need to embrace the best elements of our culture -- that aspirational mindset, that 'have a go' mentality -- and support the underdog," Roy said at the time.
The six local companies Gemstar is taking to Singapore range from tech startups looking for funding through to established companies ready to expand.
The group includes Melbourne tech firm Parent Paperwork, which automates forms schools send home to parents, and a startup whose app encourages kids to exercise more.
"The point is we're not taking business away from Australia," Manning said. "We want to fast-track them and help them grow."
Lincoln Easton, founder of building and construction industry cloud-based billing provider Progressclaim.com, is currently in Singapore with Gemstar. He said he is hoping to find business partners and clients in the region to help him expand in Southeast Asia, where the construction market is almost as big as in the US.
Easton, whose clients include Mirvac, said that while Australia's R&D incentives are good, there is often too much bureaucracy involved. Australia also has a risk-adverse culture when it comes to investing in startups, he said.
"We are not saying we want to move out of Australia," he said. "What Malcolm Turnbull's government is doing with new incentives to invest in startups is really exciting but in our case it has probably come a bit late.
"It's aimed at quite early-stage companies. They shouldn't discount people who are a bit further down the line."
The R&D Tax Incentive allows companies to claim a tax break for the money they spend on internal R&D, and in February last year, Parliament passed new legislation that limits the amount for which companies can claim R&D tax breaks to AU$100 million. The legislation was backdated, which left the laws to apply retrospectively from July 1, 2014.
It was revealed at Senate Estimates in October that manufacturing was the industry with the largest number of R&D registrations; professional, scientific, and technical services were second; and information media and telecommunications came in third -- accounting for only 18.3 percent of the total R&D registrations for the 2014 income year.
Building on the government's proposed crowdfunding legislation released last year, the National Science and Innovation Agenda also saw early investment capital increase from AU$100 million to AU$200 million, as well as a 20 percent non-refundable investment tax offset capped at AU$200,000 per investor per year; a 10-year capital gains tax exemption; and a reduction in bankruptcy default from three years to one.