Singapore chases tech 'Jedi Masters' for Silicon Valley ambitions
San Francisco-based investor Paul Bragiel said he needed to be asked three or four times before he accepted an invitation from Singapore to come check out its tech scene. He made the 8,000mile trip, but said that back then - in 2010 - the city-state's prospects to become a leading Asia tech hub were "bleak, to say the least."
But he saw some promise, and like many other investors and tech companies since then, was attracted by generous terms from government agencies.
"They gave us a very aggressive deal. Very few countries would have matched it," added Bragiel, who had considered Hong Kong and Tokyo for an Asian expansion before co-founding venture capital firm Golden Gate Ventures in Singapore in 2011. He declined to say what the terms of his deal were.
Armed with lucrative grants and incentives, Singapore has been ramping up its efforts to lure tech firms and investors, including global players like Facebook, Alphabet's Google and Dyson, companies and government officials say.
But now the focus is shifting toward attracting talent, and even the government says its work is not done.
Chng Kai Fong, managing director of Singapore's Economic Development Board (EDB), the government agency tasked with negotiating some of those deals, said he is now gunning for "Jedi Masters" he hopes can finally elevate Singapore into a global tech hub. The secretive nature of the deals means it is unclear how much the country spends to attract such companies and whether it pays off.
Manufacturing, finance and insurance made up more than a third of Singapore's $356 billion economy in 2018. The information-communications sector, into which tech firms would largely fall, was about 4%.
But it is growing faster than any other sector, data on Tuesday showed. Info-comm expanded at an annualized 6.6% in the first quarter of this year, while the next fastest of the nine sectors Singapore tracks was finance and insurance at 3.2%.
Challenges remain: some tech companies have expressed concern about a recently passed fake news law in Singapore, which critics say could hinder free speech. Google said it was worried the law would stifle innovation and the growth of the digital information ecosystem.
And Singapore only has one local "unicorn" - a startup worth over $1 billion - in ridehailing firm Grab, according to research firm CBInsights. Neighboring Indonesia four: taxi app Go-Jek,
has travel site Traveloka, and market places Bukalapak and Tokopedia. Hong Kong has two, in online travel agency Klook and logistics firm Lalamove. Details on the deals negotiated with the EDB are hard to come by because the government makes firms sign nondisclosure agreements, companies, advisors and officials said.
Lengthy tax holidays, hefty grants for research and development, co-funding for investments and land and rental deals are among the incentives from different agencies, they added. Such deals have attracted some of the world's biggest tech companies. Google, for instance, now has more than 1,000 employees in the city-state. It started its Singapore operations in 2007 with 24 people.
Facebook last year opened an office in Singapore that can accommodate 3,000 people, up from 10 employees in 2010.