News & Insight
Tech investment in Singapore and Britain: synergies and opportunities abound
oth Britain and Singapore are rapidly expanding their tech and innovation economies. With the economies of both countries evolving in this direction, there are synergies and opportunities to take advantage of in common high-demand areas, such as (1) financial technology, (2) medical technology, (3) artificial intelligence, (4) attracting tech start-ups and (5) cyber security.
Both nations, Britain and Singapore, are grounded on a strong rule of law and have the world’s best IP and other dispute resolution regimes. There is global confidence in the business and innovation infrastructures of Britain and Singapore.
The shared heritage of a related common law (English law-based) system makes it attractive for businesses, investors and entrepreneurs from Britain or Singapore to collaborate. If a party from the EU, ASEAN or China is involved, choosing either the legal system of Singapore or England and Wales to govern the contract, with the courts of either country or arbitration to have jurisdiction over disputes, makes collaboration more predictable, reduces risks and more effectively protect the rights of the parties.
Additionally, the use of English language as the common medium of communication makes it easy for businesses of either nation when dealing with their counterparts round the world.
For British investments into Asia, Singapore is the best gateway to the growing tech markets in ASEAN, and to the booming tech talent pool and tech companies of China. Singapore, the jewel of Southeast Asia and the obvious bridge to look to between ASEAN and China, has heavily invested into numerous initiatives to be a ‘Smart Nation’ and is the Global-Asia node of technology, innovation and enterprise.
For the Singapore investor, Britain offers easy access to trade and investment in the EU regardless of the outcome of Brexit. As of 2018 its technology sector is made up of over 223,000 tech companies, a sector growing 2.6 times faster than the wider UK economy and worth £184 billion to the British economy. Britain is a strong nation in digital tech investment, with £3.3 billion invested in 2016 over 2,645 deals. As of 2018, reports suggest London leads European cities as top destination for tech investment.
In fintech, the governments of both nations embrace tech innovation for their financial sectors. In 2015, the Monetary Authority of Singapore committed about US$160 million over five years to support the development of fintech in Singapore, with key areas of interest being – digital and mobile payment systems, authentication and biometrics, blockchains and distributed ledgers, cloud computing, big data and self-learning machines. In the UK, fintech contributes £6.6 billion annually to the UK economy and in the first three quarters of 2018 the sector received a record £2.1 billion investment.
The pace of growth in medtech innovation is at an unprecedented rate in both UK and Singapore, largely owing to breakthrough technologies in other fields (e.g. AI, 3-D printing, robot technology) combining their expertise with healthcare.
As of 2018, Asia’s medtech market is expected to grow 8% year-on-year, and is projected to overtake the EU as the 2nd largest market globally by 2020. In 2016, Singapore’s MedTech manufacturing sector generated S$11.5 billion, a more than six-fold increase from 2000. The UK medtech sector is also rapidly growing, generating £21 billion of revenue. There is a drive by both Governments for companies to collaborate to grow their nation’s medical technological industry.
For Singapore and the UK, both AI and cybersecurity are also rapidly developing tech fields.
Estimates are that for Asia by 2030 AI could generate additional economic value of between S$1.8 trillion and S$3 trillion annually. In the UK, the market value of AI technologies is expected to add an additional £650 billion to the UK economy by 2035.
Both the UK and Singapore are world leading hubs for cybersecurity, and its role is crucial to sustaining global credibility and confidence. Private and public entities in both countries are serious about data security and protecting the clients they serve. Singapore’s spending on cybersecurity products is expected to outpace the global trend this year, with its predicted spending predicted to grow by 10%. In 2018, the UK cybersecurity market was valued at over US$5 billion and is widely regarded as the largest cybersecurity market in Europe.
Clearly, there are opportunities for enterprising individuals and entities to invest at every level in the tech and innovation economies of Singapore and the UK.
Both countries’ Governments advance a myriad of initiatives to provide early funding, with guidance and support, to attract and invest in potential digital disrupters in its tech sectors. Both Britain and Singapore are keen to establish themselves as global innovation and technology hubs.
Humphreys Law is well-positioned to support global tech businesses at all stages of the cap table, including UK businesses looking to do business in Asia and vice versa. Feel free to contact firstname.lastname@example.org if you would like to speak to one of the team on issues facing your business.
This article was researched and prepared by Paul Wong Chun Yi (who is dual-qualified in England and Singapore) from our Business Operational and Transactions Team with input from Robert Humphreys.
Photo: The UK and Singapore have strong links as highlighted by a recent official meeting between the two governments in Singapore. Pictured are the Secretary of State for Foreign and Commonwealth Affairs of the United Kingdom The Right Honourable Jeremy Hunt MP with the Minister for Foreign Affairs Dr Vivian Balakrishnan. [Image Credit: Ministry of Foreign Affairs, Singapore]