Interest in tech startups rises, but challenges remain in 4IR
MYANMAR will invest in developing its human capital to keep up in the Fourth Industrial Revolution (4IR), State Counsellor Daw Aung San Suu Kyi said at the World Economic Forum for Asean in Hanoi last week. But while support for upcoming entrepreneurs and start-ups in Myanmar is rising, there are still major hurdles blocking the sector from achieving its potential.
In her speech, Daw Aung San Suu Kyi stressed that Myanmar can no longer afford to rely on cheap labour and low value-add skills in the 4IR. To stay relevant in the current age of technological disruption, Myanmar must nurture creativity amongst its youth and leverage on the talent and potential of its people.
She added that investments must be channeled towards improving the education system and building up practical skills. “Industries do not create themselves. There are teams involved in creating ideas and engineers involved in converting those ideas into a working system. Unless we develop the practical skills to make our creative ideas marketable, we will not face the challenges of the new era,” she said. Support, timing For now, the situation is such that many startups and entrepreneurs rely on seed organisations like Rockstart and Phandeeyar for funds, training and workspace to take their ideas forward. Phandeeyar also holds yearly competitions for tech startups, the winners of which receive prize money to further their progress.
While support is paramount for startups to get off the ground, the key to success for many is getting the timing right. Take BroCode, one of the 3 winners of Phandeeyar’s Startup Challenge 2018, for example. BroCode is developing a mobile payment solutions application for restaurants.
The way founder Ko Zay Ye Htut tells it, “building a mobile app is easier today because most people now use mobile phones and wifi. SIM cards are easily available and it’s common for some mobile phone users to have more than one SIM,” he told The Myanmar Times.
He added that the mobile communications network is also much wider now and more are aware of the benefits of cashless payment solutions, making it easier for people to comprehend and accept the concept of digital payments.
At the World Economic Forum last week, Daw Aung San Suu Kyi also invited investors to actively invest in the country’s entrepreneurs.
In recent years, venture capital interest in tech-related startups has indeed soared. Just this month, for example, Singapore-based Seed Myanmar Ventures, an early-stage technology investment vehicle with a focus on Myanmar,took a stake worth six digits in Marathon Myanmar Company Limited, an e-commerce delivery service platform.
In August, Seed Myanmar Ventures also invested US$100,000 in Flexible Pass, a year-old mobile app startup in Yangon. The app allows subscribers to purchase discounted day passes to more than 80 fitness centers across the city.
Other tech startups, such as content provider Bagan International Technology and education technology startup eSchool have also succeeded in raising funds from private investors. Start up difficulties Still, unique challenges remain that inhibit progress for Myanmar’s startups in the 4IR. Chief among these is the lack of intellectual property (IP) rights. Although the authorities have said a draft legislation is in the works for more than a year now, an officially enacted IP law to protect startups against theft of ideas or piracy remains absent. “We need legislation such as a copyright law to help us survive,” said Ko Zay Ye Htut.
Many startups find the lack of affordable workspace as well as materials a big issue. Take HydroPlant, another Startup Challenge 2018 winner. HydroPlant is developing a groundless agricultural method to grow crops which can be used both indoors and outdoors. If successful, the method will reduce costs for farmers while increasing crop yields at the same time.
“Most of the materials used in our product are made overseas as it is hard for us to source them here in Myanmar,” said founder Ma Phyu Pwint San. That’s a problem, especially with imports becoming dearer due to the rising dollar exchange rate.
For Ko Kyaw Zin Htet, founder of Lan Kyone, the third Startup Challenge 2018 winner, education is one of the biggest barriers. “As we are starting from scratch, people don’t know what we do and so creating awareness and educating them about our service is a big challenge,” he said.
Lan Kyone is a ride-sharing app under which drivers commuting to and from Yangon Technology University can offer those traveling by bus or other means lifts in their cars for a fee. “Drivers can post the time and route they will be using on our platform and those with similar schedules can hitch a ride with them,” said Ko Kyaw Zin Htet.
Although support exists, access to capital remains one of the largest barriers for most startups and entrepreneurs. “Because loans are not available to early-stage startups, we all have to invest our own money to get started. When more is needed to scale up the business, we still have to seek investors and this is still hard for us,” said Ko Zay Ye Htut of BroCode.
Daw Aung San Suu Kyi’s government should consider the current startup environment as it devices new measures to unleash the innovative potential of the Myanmar people and make sure the country remains relevant in the 4IR.
A customer makes enquiries at a Samsung distributor in Yangon.