Asia growing dominant in mobile innovation

SINGAPORE--Asia's large mobile population, and the different needs and use cases that come with it, are helping to drive innovation in the region's mobile industry. This has led industry watchers to predict that "true innovation" will emerge here rather than in western economies.

George Kellerman, partner of 500 StartUps, a startup incubator based in California, U.S.A., said countries with large populations such as India and Indonesia, where most people using the Internet do so with their mobile devices, are becoming catalysts for mobile innovations. The executive was speaking at a panel discussion during the Techventure 2012 conference held here Thursday.

One example of "true innovation", which is not a mere rehash of existing technology, is the SIM-based mobile payment service offered by Malaysian startup Tootpay, noted Kellerman. The company enables any mobile handset to make financial transactions via a sticker placed on one's SIM card. The sticker will send financial details to the company's backend mobile payment platform, which will then channel the transaction to the relevant bank, the startup stated in its Web site.

This service would appeal to a wider range of mobile users as it is applicable for both feature phones and smartphones, he added. By comparison, most of the mobile payment developments in the west are centered on smartphones and mobile apps for these high-end mobile devices.

Another panelist, Shashank Dixit, CEO of India-based software company Krawler, pointed to Jigsee as another innovative startup. The company has developed the technology to allow mobile phone users to tap on 2G networks and stream videos on lower bandwidth. This is particularly applicable to rural communities in India, where the wireless network infrastructure is not as developed as urban areas.

Chinese phonemakers are another example of how the region is leading mobile innovation. The low-cost smartphones offered by these companies have helped to knock past incumbent Nokia off the perch in markets such as India, noted Steve Goh, co-founder of mig33, who was also on the panel.

With these examples in mind, Kellerman believes it will be Asia that will dominate the overall mobile space in terms of innovation rather than western economies.

Silicon Valley still rules as startup hub
Despite the innovation coming from Asia, the West, specifically Silicon Valley in the United States, is still considered by most as the startup hub.

Patrick Lee, co-founder of Rotten Tomatoes, the movie review site, said Silicon Valley's appeal lies in the abundance of talent which comes from the nearby universities. It is very difficult to find the same number and level of talent in other communities, he added.

However, it is not the level of interest by venture capitalists and, with them, the funds available that draw talented entrepreneurs to the Valley, said Ben Huh. The CEO of humor Web site Cheezburger pointed to the abundant opportunities to network and promote their businesses as more important to entrepreneurs than the availability of financial capital.

Huh did note the U.S.'s position as the center of technological innovations could be affected by politics. For instance, the current immigration policy makes it difficult for foreign students to stay in the country and contribute after their studies, he noted.

One Asian entrepreneur has resisted the allure of Silicon Valley, though.

Darius Cheung, founder of tenCube, admitted the availability of "billions of dollars" in funding in Silicon Valley did cross his mind, but he chose to establish his business in Singapore instead. This was because he was looking at long-term prospects over short-term profitability, he said during the same panel discussion Thursday.

Cheung's company was eventually sold to security vendor McAfee in 2010.

Singapore, Hong Kong tough startup destinations
When asked which Asian markets are tech innovation hotspots, Lee identified Japan, China and India due to their large local populations. Singapore and Hong Kong will find it more difficult to achieve the status because of their smaller population pools, he added.

Goh added too much government funding is not helpful in developing startups to their full potential, as founders might take money for granted and not sell their companies for the top dollar when the right opportunity comes along.

Dennis Goh, founder of Hungrygowhere, disagreed. He said the Singapore government's efforts to attract foreign companies and startups through tax and subsidies has helped build a better ecosystem for startups compared to 10 years ago.