SINGAPORE — The Republic is the best place in the world for start-ups to hire talent, beating even Silicon Valley, a global survey has shown, but that is the only silver lining as the city-state has fallen in the overall ranking for start-up ecosystems, with weakness flagged in areas such as funding and start-up experience.
Singapore ranked No 1 in talent to break what would otherwise have been a monopoly by Silicon Valley at the very top, but fell two positions to 12th place in the 2017 Global Startup Ecosystem Report and Ranking, the US-based Startup Genome project said on Tuesday (March 21) in a 151-page report.
The study, which surveyed more than 10,000 participants worldwide, assessed 55 start-up ecosystems across 28 countries and ranked the top 20 ecosystems.
Besides talent, the indicators taken into account in the overall ranking are performance (including start-up exits, valuations, early-stage and growth-stage successes), funding, market reach and experience — in all of which Silicon Valley scored the best.
Singapore was bottom among the 20 in start-up experience, and was ranked 16th in both funding and performance, and 11th in market reach.
The talent indicator is measured in three areas: Software engineer salaries, talent quality and access (the proportion of software engineers and growth employees with two or more years of experience at a prior start-up, the time required to hire an engineer and the ability to obtain a visa for hires from abroad.)
In terms of talent cost, Silicon Valley, where software engineers are paid US$112,000 (S$156,374) on average annually, lost out to Singapore, where they are paid US$35,000 yearly. The global average is US$49,000, the report showed.
Other than cost, Silicon Valley retained the top rank for talent access and quality, while Singapore came in third for talent access and 10th for quality.
“We can’t rest on our laurels even though we scored well for talent,” said Dr Jeffrey Chi, chairman of Singapore Venture Capital and Private Equity Association and also the vice-chairman of the venture capitalist firm Vickers Venture Partners.
“The cost could be cheaper but the skills base is comparable to the Silicon Valley. This is an industry where hitting the best is important. It is also important to have suitable immigration policies,” he added. He also said software engineers here lack experience, given that Singapore’s start-up ecosystem is newer.
And it is hard to retain the best talent. Clickr Media’s chief executive and co-founder Derick Ng noted that many Singaporean software engineers leave for the US for higher salaries. “It could be because of the large amounts of funding there and the higher budgets the companies have to pay their engineers.”
There is some concern about funding in Singapore, where early-stage funding growth is falling behind its peers, the report said.
It noted, however, that tech start-ups here enjoy significant Government subsidies, such as the US$13.2 billion research and development initiative, and schemes that match early-stage venture capital funds on a one-to-one basis.
In the overall ranking, Silicon Valley and New York City retained the 1st and 2nd placings, respectively, while London moved to 3rd, up three notches from the previous study in 2015. New entrants Beijing and Shanghai were ranked 4th and 8th, respectively, while Boston, Tel Aviv, Berlin, Los Angeles, Seattle and Paris made up the other ecosystems ranked above Singapore.
Silicon Valley has an ecosystem value – exit value plus startup valuations – of US$264 billion, with 12,700 to 15,600 active start-ups, the report showed. New entrant Beijing, which has an ecosystem value of US$131 billion, is home to between 4,800 and 7,200 start-ups. Meanwhile, Singapore has an ecosystem value of US$11 billion, with 1,600 to 2,400 tech start-ups.