It’s been a rough ride for the global economy since 2008, investments included. Just think that in a short span of less than 20 years, two major busts occurred (2000 and 2008) and the recuperation period from each takes some time. Throw into the pot geopolitical instability, which impacts investment mood as well, and you get a totally explosive (by all means) situation with no foreseeable end on the horizon.
The first sobering up from the great illusions of technology happened right after 2000. The bust cleared the sphere from the ‘dumb’ money, leaving the scene to investment experts, but also many casualties among technology companies. It took about 5 years to recover. 3 years on, and we had another bust, much deeper, accompanied by international geopolitical threats and global terror. Fast forward 10 years, we haven’t been safely delivered yet.
The investment appetite, which usually feeds off hopeful exuberance, has been down for almost 20 years now. The awakening has been rude and plunged the mass business mood into depression.
However, as Prof. Kahanman successfully argued all the way to the Nobel, the decision-making process is fundamentally an irrational one. Venture Capital is not exempt. Thus, on one hand, there is this fear of betting on the wrong “unicorn”, and on the other – desire for the quickest ROI ever, because nobody can predict the next downturn. These two polar opposed trends have rendered fundraising for technological start-ups tremendously complicated. The VC investment in technology has been in decline for years now.
Truly revolutionary ideas need money and patience – two ingredients that seem to be in great shortage in the 1st World investment environment.
China decided to make a move and get into R&D and proprietary IP ownership, which will propel her into the 1st tier league. Money and patience they have in abundance.
New players from Asian countries, especially China, have reached the point Singapore and Japan were a couple of decades ago. From second-tier copy-cat countries, they made the strategic decision to enter into the development of technology, boosted by new areas of innovation they have made an economic leap. Capitalizing on the country’s economic boom of the last 20 years and huge cash reserves, China decided to make a move and get into R&D and proprietary IP ownership, which will propel her into the 1st tier league. Money and patience they have in abundance.
However, solutions have to be found to the country’s international political standing and bureaucratic tradition and this is where Singapore comes into play. Being founded by Chinese refugees and having a similar mentality and cultural understanding, but much more efficient (following decades of independent existence), the country serves as a convenient business hub for both technology seeking funding and Chinese money seeking to support and develop new ideas. Therefore, in addition to its own investment, Singapore is China’s largest investment destination in Asia, and one of the top investment destinations for Chinese companies investing abroad.
Western entrepreneurs are flocking to Singapore to raise money for their ventures and various investors present are having quite a technological feast, picking the most brilliant ideas to add to their portfolios. Becoming an inter-cultural technological hub, sponsoring international business, Singapore is quietly filling the investment void, left by the 1st World.
Patience, resilience and marathon long-term vision and endurance have always been fundamental brick stones in Eastern philosophy. As the Western world has learnt since WW2, Asians do not distinguish between their life philosophy and business, no matter what political system they employ at any given time – the basic precepts underlie all the other add-ons of different generations and geopolitical changes. Hence it renders them particularly astute to take on where Europe and the US are lagging.
International industry leaders like the Avnon Group have spotted this trend and are already checking the possibility of supporting innovation via this channel. Tomer Avnon, President & CEO: “Singapore has many investors looking for start-up and technologies that will become the next “big thing.”
There is a good chance that the next technological breakthrough will come from the East. Given all the right combination of ingredients: resolve, money and brains – it looks like its set to be a recipe for success.