Michael Kim, Google’s head for startups in the Asia Pacific (APAC) region spoke at a virtual media roundtable yesterday (February 22), describing several key trends in the region that makes him confident in its continued development, and the important role that Google is hoping to play in the startup ecosystem as a whole.
Michael highlighted several key trends that he felt were highly encouraging, including the growth in artificial intelligence (AI) development, decentralised finance, e-commerce, health tech, and sustainability.
On the AI front, the technology is seeing rapid adoption across many countries and companies, with governments getting in on the action too.
“We’re seeing organisations and governments actively come together, investing in research and development and complementary technologies like 5G. In Singapore, we saw the highest growth in global and AI hiring from 2016 to 2020. In Japan, we see an ageing population (and) a huge investment in robot,” said Michael.
Fintech is also increasingly being adopted on ecommerce and in decentralised finance, with apps such as Grab, WeChat, and Alipay being some of the notable ones.
The rapid adoption of mobile payments has really helped propel APAC into one of the fastest-growing fintech markets in the world. Linked with fintech is e-commerce, whose growth is powered by innovation and fintech services.
Southeast Asia is emerging as a hotbed for e-commerce and fintech due to its widespread social media apps, but (there’s) also a huge focus on consumer hype built by celebrities or influencers.– Michael Kim, head of Google for Startups in APAC
The APAC region has also experienced its fair share of challenges, and startups have been quick to rise to the occasion. Health tech has developed significantly since the onset of the Covid-19 pandemic, and the need for better resource allocation and resource usage has led to significant interest in sustainable development among startups.
“APAC is actually the world’s most vulnerable region to climate change and global warming. Startups here are increasingly finding innovative ways to develop sustainable tools in the region, particularly in Southeast Asia (SEA),” said Michael.
“The population of SEA relies on already strained natural resources. So what we’ve seen here are startups using cloud computing, AI, and big data to generate greener supply chains, optimise traffic, and track extreme weather disasters, whether it’s earthquakes or typhoons, to make sure that all of us have the right tools and data to be prepared.”
What makes APAC ripe for future development?
Michael is highly confident in the ability of the APAC region to continue its development into a hub for startups and businesses, and he cited positive government support as a key pillar.
“A good example of this is in South Korea, where the ministry of science and ICT actually created an organisation called the Metaverse Alliance. (It) is an organisation primarily developed to boost the development of VR and AR platforms,” he noted.
Clearly, the expectation is that governments will continue their investment and development of such technologies, and startups would be wise to take advantage of such interest.
The growth so far, at least for Michael, is only the first part of the startup development in the region. His confidence in APAC’s future is also founded in what he sees in the potential for future growth.
There is a huge potential for decentralised finance in APAC. Indonesia and Vietnam have huge unbanked populations, and what we’ve seen in SEA alone is close to a billion dollars in equity funding in 2021 — that’s six times compared to 2020, so a lot of investment dollars are going into this new technology.
In Singapore alone, we saw nearly S$77 billion in funding for decentralised finance tools and startups in 2021. So it’s definitely a trend that’s here to stay and a technology that people are very interested in investing in.– Michael Kim, head of Google for Startups in APAC
He added that the region has developed “really mature startup ecosystems”, as seen with the emergence of tech hubs in South Korea, Japan, Taiwan and Southeast Asia.
“Southeast Asia is also a region where we’re seeing startups now become the pillar of the economies. For the past few decades, we’ve seen a lot of traditional companies, kind of be the bellwether of whether or not that economy is doing well. Now we’re actually seeing startups become a pillar of many countries’ economies, which is really, really exciting to see.”
Additionally, the APAC region, especially SEA, is where Michael sees the greatest potential for growth. APAC’s demographic, path of economic development, and unique challenges create a perfect creative storm that greatly aids the founding of new startups, while providing them with high probability for expansion in the right places.
I think that founders and entrepreneurs in APAC are really quick to adapt to new trends. They then build their new technology in really large domestic markets like India, Japan and Indonesia, where there are a lot of connectivity … and dense cities.
So when you launch in these markets, you see quick virality. What’s really interesting to see is that in our region alone, we’ve seen nearly 190 tech unicorns in APAC as of April 2021, which is actually only second to the US (at) around 290 to 300. That’s far ahead of Europe, which is around 69.– Michael Kim, head of Google for Startups in APAC
While APAC, especially SEA, has shown remarkable growth, Michael feels that there is more to see from the region. Helpful government policies and an environment that stimulates creativity and necessitates innovation have led to, and will continue to, lead the growth in the regional startup scene.
How does Google see itself and its role in the APAC region?
“Google itself was a start up some 20 years ago, and our founders always said that many people helped them along the way,” said Michael.
As such, Google is now heavily invested in giving back to the startup community. From investment to mentoring, Google has many programmes in place that aim to move the startup ecosystem forward. To them, these initiatives are a way for Google to support the new generation of startups and make a real difference.
For new startups, Google has startup academies, where they provide courses on corporate growth, leadership, and sales, among others. For startups at a more advanced stage, Google has an accelerator program that provides tailor-made solutions.
“Our accelerator programs are really intensive programs that are really geared towards high-potential, fast-growth startups. We have accelerator programs in India, Japan, Korea, and Southeast Asia, and these are where we give one-on-one care and support to startups in many of the industries,” said Michael.
“We pair them with a Google mentor and they have close to eight to 12 weeks of mentorship, really getting the support they need, (be it) engineering, leadership or design support. (Through) our accelerator program, (we) want to ensure that every founder has the right tool to get to the next level.”
From Google’s perspective, the future is dependent on the startup ecosystem so it is determined to revolutionise the ecosystem.
“I get to work with startups every single day. And when you get to talk to a founder in Jakarta, or when you see a young founder in Japan or Thailand, you listen to their dreams and (understand) what they’re building and why they’re building (it), which is to improve the lives of people — not just in their communities, but in their region. It gives you a lot of hope.”
“I know that the past few years have been really difficult with the pandemic, but I actually am so hopeful for the future because I see the entrepreneurs as the pioneers and architects of our future. It’s really exciting to see what they’re building. They have no fear. They’re diving into new technologies, with big eyes and big hopes.”
Google also has an initiative to level the playing field and address the low rate of women’s entrepreneurship called the APAC Women Founders Academy. The initiative is one where Google pairs women founders with mentors who help them build their leadership skills to better lead their startups to success.
Even in the face of the pandemic, Google has found new ways to use its technological resources to continue helping startups. Although its startup accelerator campus in Tokyo had to close due to safety issues, Google has gone ahead to move it online to continue helping startups get the support they need.
The onset of a pandemic has therefore not really affected Google. The goal remains the same, and what has changed is only the means.
“Innovation will continue to happen in Asia, whether in Japan or all across the region, and there will be investors that are really excited about investing in the future. I can’t predict the future (when it comes to market trends), but I can tell you this: there’s a lot of excitement here in our region from investors that want to build with entrepreneurs here, and I see that continuing to grow.”
Featured Image Credit: Michael Kim via Facebook