Asia Tech Podcast http://www.ATP.show Asia Tech Research http://www.AsiaTechResearch.com The New Home of Entrepreneurship by Graham D Brown

1. the digital
frontier
REPORT
3
ASIATECH RESEARCH
The New Home of
Entrepreneurship

2. #asiamatters ASIATECHRESEARCH
Graham D Brown
Report Author
Thanks for reading my #asiamatters Report
“The New Home of Entrepreneurship”.To
learn more about what I do, and get regular
updates and insights from my Asian research,
connect with me on Linkedin.
Connect with me on Linkedin

3. download them free from www.AsiaTechResearch.com
#asiamatters
Get All 4 Reports in this Series
ASIATECHRESEARCH

4. #asiamatters ASIATECHRESEARCH
Asia: The New Home of
Entrepreneurship

5. #asiamatters ASIATECHRESEARCH
Understanding history is always easy
with hindsight. In times of change,
everything appears as random events.
As of 2018, we are witnessing another
seismic shift that to future generations
and their historians will seem
obvious…

6. #asiamatters
Once Upon aTime in the West…
ASIATECHRESEARCH

7. #asiamatters
“We wrote a few lines of code in our dorm
rooms… now we’re all frickin’ billionaires…”
ASIATECHRESEARCH

8. Valley of the
Bros?
ASIATECHRESEARCH

9. #asiamatters
There is a lot of talk young of Americans today
being the “entrepreneurial generation”
ASIATECHRESEARCH

10. #asiamatters
However you spin it,
entrepreneurship in the US is in decline
ASIATECHRESEARCH
0%
2.5%
5%
7.5%
10%
1990 1995 2000 2005 2010 2015
SOURCE:THE WALL STREET JOURNAL
Share of households headed by someone under 30
that has a stake in or owns a privately held business
In America,
millennial entrepreneurship
is down.
Despite the apparent strength of
the startup and technology sector,
millennials are projected to be
the least entrepreneurial
generation:
Entrepreneurship rates for people
under 30 have fallen by 65
percent
since the 1980s.
- Entrepreneur Magazine 6 Sep
2017

11. #asiamatters ASIATECHRESEARCH
In reality, it’s no longer the US that stands
out as a beacon for the world’s
entrepreneurs…
…but the legacy of 100 year hegemony
has us still believing in the story of the
“West is the best…”

12. #asiamatters ASIATECHPODCASTASIATECHRESEARCH

13. #asiamatters
Something’s up…
ASIATECHRESEARCH
#shifthappens

14. #asiamatters ASIATECHRESEARCH
Let’s unpack what’s really going on…
Asia is becoming increasingly a more
attractive offer to global entrepreneurs.
Add to that a new generation of
local Asian talent who are turning their
back on safe careers.

15. Entrepreneurship isThriving
#asiamatters
Meanwhile in Asia…
ASIATECHRESEARCH

16. There is health in the country, and room away from our crowds of idlers and imbeciles.
#asiamatters
Go East, Young Man
ASIATECHRESEARCH
Asia is where the money, energy,
ambition, drive, and the brains are.
China currently puts out something
like 10 times as many engineers as
America does.
This may not have an
immediate effect, but it
will have an effect
someday.
- Jim Rogers

17. Parental values of stability and survival no longer key career goals
#asiamatters
Young Asians are opting for risk
ASIATECHRESEARCH
83% of Indians surveyed
said they would love to
become an entrepreneur.
20% in Hong Kong had
entrepreneurship intentions
last year and 9.44 % started
or operated new businesses,
up 159 % from 2009 .
THEN
NOW

18. #asiamatters
This generation no longer aspires to be
Doctors and Accountants, but Founders and CEOs
ASIATECHRESEARCH

19. #asiamatters ASIATECHRESEARCH
“We’re seeing people in
their early twenties starting
companies—people just
out of school, and there
are even some dropouts,”
- Kai-Fu Lee, ex Apple,
Microsoft, and
Google China

20. Maturing startup ecosystems and government policy propagate entrepreneurship
#asiamatters
Chinese Entrepreneurial Generation
ASIATECHRESEARCH
“Now major [Chinese] cities are crowded with
ambitious inventors and entrepreneurs, flocking
into software accelerators and hackerspaces.
They no longer want jobs at Google or Apple; like
their counterparts in San Francisco, they want to
build the next Google or Apple.”
- Wired Dec 2015

21. So much for “communism”. 50% of Chinese industry is privately held business
#asiamatters
Private Enterprise fuels growth
ASIATECHRESEARCH
0
10
20
30
40
50
2005 2010 2016
% of market cap
SOURCE: MORGAN STANLEY RESEARCH, MSCI

22. Privately held business account for over 80% of Chinese IT industry
#asiamatters
In The IT Sector, Private Dominates
ASIATECHRESEARCH
SOURCE: MORGAN STANLEY RESEARCH, MSCI
0
20
40
60
80
100
2005 2016
% Market Cap

23. #asiamatters ASIATECHRESEARCH
It’s a shift creating billionaires you
haven’t heard of (Yet)

24. Shenzhen leads as one of the most entrepreneurial in Asia
#asiamatters
Megacities power the Shift
ASIATECHRESEARCH
In Shenzhen, 16 % of the adult population
largely immigrants from other parts of China
are engaged in entrepreneurship
- Global Entrepreneurship Monitor 2017

25. #asiamatters ASIATECHRESEARCH
And now this shift is changing cultural
narratives. No longer is Asia a land of
copycats and cheap factories but both a
source of jobs for the West and an
attractive proposition for location
independent entrepreneurs.

26. #asiamatters ASIATECHRESEARCH
“By allowing Americans to make use
of Alibaba'sTmall platform, it would
bring a million new jobs in the U.S.
over the next five years thanks to
cross border e-commerce sales to
China.”
- Forbes 25 April 2017
“Ma envisions 40 per cent of business to come from outside mainland China in the next
decade. Within 20 years, he expects Alibaba to serve as many as 2 billion consumers
worldwide, and support 10 million profitable businesses.”
- South China Morning Post 10 Jan 2017
Asia is now taking its entrepreneurs and ideas to the West
Emboldened by domestic success…

27. #asiamatters ASIATECHRESEARCH
Asia is an increasingly attractive option for career development
For Foreign Entrepreneurs

28. We are shifting from Asia being a place for Pioneers to one for Followers
#asiamatters
Cultural Acceptance of Asia by the “West”
ASIATECHRESEARCH
“What the heck
Let’s go to Asia”
“There are real
opportunities here in
Asia”
“You’re missing
out if you’re not
in Asia”
Pioneers Opportunists Followers
ASIA:
The frontier
ASIA:
The de facto
1980 -1999 2000 - 2019 2020 -
ASIA:
The next big thing

29. We are shifting from Asia being a place for Pioneers to one for Followers
#asiamatters
Cultural Acceptance of Asia by the “West”
ASIATECHRESEARCH
“What the heck
Let’s go to Asia”
“There are real
opportunities here in
Asia”
“You’re missing
out if you’re not
in Asia”
Pioneers Opportunists Followers
ASIA:
The frontier
ASIA:
The de facto
1980 -1999 2000 - 2019 2020 -
ASIA:
The next big thing
…when the next
generation of
entrepreneurs
realize they are
better off in
Asia
…how it was
for previous
generations …how it is
for current
generations
We are HERE
hmmm…
Asia or
America?

30. #asiamatters
Optimism Fuels Asia
ASIATECHRESEARCH

31. Southeast Asia is the most positive about the impact of Globalization
#asiamatters
Globalization is “a force for good”
ASIATECHRESEARCH
Vietnam
Philippines
India
Thailand
Malaysia
Indonesia
Singapore
Denmark
Hong Kong
Germany
Australia
UK
USA
France 37%
40%
47%
48%
60%
63%
67%
71%
72%
73%
75%
83%
85%
92%
SOURCE:ASIA TECH RESEARCH BASED ON YOUGOV DATA 2016

32. #asiamatters ASIATECHRESEARCH
Asians are the most optimistic about
globalisation and the impact of
immigration - two key catalysts for tech
startup ecosystems.

33. Asia leads the West in openness
#asiamatters
Positive Attitude to Immigration
ASIATECHRESEARCH
India
Vietnam
Philippines
Australia
USA
UK
Singapore
Hong Kong
Thailand
France 14%
21%
23%
30%
32%
37%
42%
45%
48%
52%
SOURCE:YOUGOV 2016

34. #asiamatters ASIATECHRESEARCH
Asia is the Place to
Get Sh*t Done

35. (Instead of building walls and increasing regulation)
#asiamatters
Asian governments are responding…
ASIATECHRESEARCH
Singapore
Israel
Australia
Finland
Taiwan
USA
China 63.9%
64.7%
65.3%
67.3%
67.3%
67.5%
69.9%
SOURCE:THE ECONOMIST INTELLIGENCE UNIT 2015
GLOBAL DYNAMISM RANKING

36. Hong Kong and Singapore standard best in class
#asiamatters
Asia Leads in Economic Freedoms
ASIATECHRESEARCH
Hong Kong
Singapore
New Zealand
Switzerland
Taiwan
UK
USA
South Korea
Malaysia
Thailand
Philippines 65.6%
66.2%
73.8%
74.3%
75.1%
76.4%
76.5%
81.5%
83.7%
88.6%
89.8%
SOURCE:THE HERITAGE FOUNDATION & WALL STREET JOURNAL 2017

37. #asiamatters ASIATECHRESEARCH
Where the West has stagnated with
bureaucracy and wall-building,Asia has
forged ahead, cutting red tape and making
life easier for entrepreneurs.

38. #asiamatters ASIATECHRESEARCH
“In countries like Hong Kong, and even
the Philippines, there is less regulation
and it allows us to be a little
experimental.
We are working with university
professors, PhDs, the hospitals,
but we can actually try
stuff here in the
Philippines,
which you can't test
somewhere else.”
- Bay McLaughlin

39. Hong Kong tops IMD World Competitiveness and Economic Freedom rankings
#asiamatters
Hong Kong world leader
ASIATECHRESEARCH
Hong Kong encourages
innovation through low
and simple taxation and
imposed no restrictions
on capital flows
- IMD World Competitiveness
Centre 2016

40. #asiamatters ASIATECHRESEARCH
“Hong Kong is a fantastic
hub right in the heart of
Asia, business operations
are simple, taxes are low,
there’s a lot of talent out
there to hire and the legal
& financial systems are
straightforward and well
regulated.”
- Ashley Galina Dudarenok

41. Singapore, S Korea, Hong Kong and China in top 6 of “ease of doing business”
#asiamatters
Asia Dominates Business Rankings
ASIATECHRESEARCH
New Zealand
Singapore
Denmark
S Korea
Hong Kong
China
USA
UK
Norway
Georgia
SOURCE:THE WORLD BANK 2018

42. #asiamatters
Americans Spend 100 Hours More than
Singaporeans Filing Taxes EveryYear
ASIATECHRESEARCH
Singapore
Hong Kong
United States
South Korea
Malaysia
China
Thailand 262
207
188
188
175
72
64
SOURCE:THE WORLD BANK 2018
AVERAGE HOURS SPENT FILING TAXES

43. #asiamatters
But, it’s not all good in Asia…
there is still room for improvement
ASIATECHRESEARCH

44. #asiamatters ASIATECHRESEARCH
In a world where entrepreneurs can
base anywhere, Asia needs to respond
Starting a Business has been the most common area of reform, with 74
of the 371 reforms of the past 15 years aimed at making it easier for
entrepreneurs to register a new business.As a result, the average cost to
start a business in the East Asia and Pacific region has dropped to 19
percent of income per capita, from 59 percent in 2003.
- World Bank 2017

45. #asiamatters ASIATECHRESEARCH
Cutting red tape and attracting
startups key to appeal

46. #asiamatters
Access
ASIATECHRESEARCH

47. #asiamatters ASIATECHRESEARCH
In a world where there are fewer
reasons than ever to be tied to the most
expensive startup ecosystems, why not
mine where the gold is? Asia offers
cost advantages and access to
billions of customers

48. Survey reveals why companies relocate to Asia, and it’s not just cost
#asiamatters
Proximity is Key Benefit of Asia
ASIATECHRESEARCH
Proximity to High Growth Market
Proximity to key Mfr sites
Proximity to Suppliers
Lower Dev Costs
Access toTalent
Easier to Export
Experienced Labor Market
Reliability of Execution 26%
30%
33%
39%
53%
54%
59%
71%
SOURCE: PWC GLOBAL INNOVATION SURVEY 2015

49. 50% of the population live within a 5 hour flight
#asiamatters
Access to Half the World
ASIATECHRESEARCH
“There is the opportunity of 1 billion
customers available within a close
proximity. It is also dirt cheap for
entrepreneurs with funds from the US
as the exchange rate and purchasing
power really does work in their favour.”
- Harprem Doowa

50. 50% of the population live within a 5 hour flight
#asiamatters
Access to Half the World
ASIATECHRESEARCH
“Hong Kong is a fantastic launch-pad for
China and other parts of the region –
from here you have access to half the
world’s population within a five-hour
flight.”
- Charles D’Haussy

51. Hubs like Singapore give you 3.5 billion people within a 5 hour flight
#asiamatters
Access to Half the World
ASIATECHRESEARCH
approx
5 hr flight
range

52. A 5 hour flight will get you access to only 15% of that market size
#asiamatters
Back in San Francisco…
ASIATECHRESEARCH
approx
5 hr flight
range

53. #asiamatters
Unique Cost Advantages
ASIATECHRESEARCH

54. #asiamatters ASIATECHRESEARCH
Low cost = longer burn time
Longer burn time = higher chance of
discovering a business model that works

55. San Francisco is $3,000 a month more expensive than Shanghai
#asiamatters
Asian Cities Significantly Cheaper
ASIATECHRESEARCH
San Francisco
NYC
Amsterdam
London
Hong Kong
Singapore
Tel Aviv
Tokyo
LasVegas
Shanghai
Bangkok
Kuala Lumpur
Bangalore 551
987
1,085
1,348
1,799
1,936
2,655
2,715
2,830
2,911
3,082
3,706
4,465
SOURCE:ASIATECHRESEARCH BASED ON NOMADLIST.COM DATA 2018
Monthly cost for single (employed)

56. #asiamatters ASIATECHRESEARCH
“For people here in Southeast Asia,
both developed like in Singapore and
developing like much of the region,
the feeling that you can succeed
simply with a little cash and a little
foresight if everywhere.If you’re still
fighting to start just the right business
in your home country, I highly suggest
you investigate opportunities here.” -
Andrew Henderson

57. London & NewYork are $20,000 more expensive than Singapore
#asiamatters
Asia Offers the Best Value Office Space
ASIATECHRESEARCH
London Shoreditch
NewYork Brooklyn
SF Mid Market
Paris 1,2&9th
Boston Seaport
Dublin Docklands
LA PlayaVista
HK Cybertport
Beijing Zhongguangcun
Singapore One North $39,088
$39,090
$40,488
$47,124
$47,435
$50,700
$57,426
$61,680
$62,736
$66,706
SOURCE: KNIGHT FRANK DATA 2017
Annual costs for 600 sq ft office in each district

58. The cheapest places aren’t always those with lowest GDP either
#asiamatters
Asia Leads in Manufacturing Costs
ASIATECHRESEARCH
Germany
Brazil
Canada
UK
Japan
USA
South Korea
China
Taiwan
Thailand
India
Indonesia $2
$5
$6
$9
$15
$18
$23
$25
$27
$30
$38
$38
SOURCE: BOSTON CONSULTING GROUP,THE WALL STREET JOURNAL 2016

59. Entrepreneurs in North America and Europe
often hold down day jobs and build their
startups in their spare time. It’s hard to be an
entrepreneur in an environment where you’re
constantly struggling for food, shelter, and
comfort. Rather than work 40 hours a week at
a job to make ends meet, you can put those 40
hours into innovation.
- Neyma Jahan, CoFounder SmartMat
Longer burn time is key to increasing the probability of getting the model right
#asiamatters
Low Cost = Longer Burn Time
ASIATECHRESEARCH

60. #asiamatters
Innovation
ASIATECHRESEARCH

61. Expanding startup ecosystem combined with unique cost advantages fuels innovation
#asiamatters
Innovation Heads East
ASIATECHRESEARCH

62. #asiamatters ASIATECHRESEARCH
“Innovation now comes from
everywhere on earth.
Most of the innovation and
disruption are coming from new
entrants - young, fearless, and not
afraid to take on the status quo.”
- Steve Blank,
AuthorThe 4 Steps
to Epiphany

63. #asiamatters ASIATECHRESEARCH
Just like Japan did in the 80s,Asia has
demonstrated that it’s capable of “moving
up the innovation chain”.Asia has the
capacity, increasingly the creativity to
innovate and now the results are
showing…

64. #asiamatters ASIATECHRESEARCH
The China Greater Bay Leads The
Valley on Invention Patents
InventionPatents(1000s)
0
50
100
150
200
2012 2013 2014 2015 2016
5458
7270
35
192
155
105
75
60
Greater Bay
San Francisco Bay
SOURCE:ASIATECHRESEARCH

65. #asiamatters ASIATECHRESEARCH
"Not only is Asia benefiting
from the use of technology,
Asia will be a major source of
the breakthroughs and
advances in technology.”
- Bill Gates Microsoft

66. #asiamatters
Chinese R&D Spending Outstrips
Rest of World by 2020
ASIATECHRESEARCH
ResearchSpending$Billion
0
100
200
300
400
500
600
2000 2005 2010 2015 2020
China
San Francisco Bay
EU
USA
SOURCE: GERD, OECD 2016
“If the current rates of
investment and growth are
any indicator, China is likely
to surpass Europe in total
research spending by the end
of the decade and the US by
the early 2020s.”
- Dr Dan Steinbock,
South China Morning Post
10 Feb 2014

67. Asian ecosystems key to European and American competitiveness
#asiamatters
West Heads East
ASIATECHRESEARCH
“In 20 years Asian countries might be
ahead on Germany technology-wise.
Germany might turn into a less
developed region in some respect.
But Berlin could become a part of the
Asian development, the Asian drive, if
we are able to become a part of its
ecosystems.”
- Rainer Seider, Head of ForeignTrade
at Ministry for Economics, Energy and
Public Enterprise, Berlin

68. #asiamatters ASIATECHRESEARCH
Change, especially innovation, always
comes from the outside.When societies
are fuelled by newly empowered outsiders,
they can change at a rapid pace…

69. #asiamatters
Change Agents: Women
ASIATECHRESEARCH

70. Female participation in entrepreneurship higher in fast growth markets
#asiamatters
Developing Markets Lead
ASIATECHRESEARCH
6 Emerging Market Economies -
Vietnam, Philippines,Thailand,
Malaysia, Peru and Indonesia - show
equal of higher entrepreneurship
rates for women than men.
- Deloitte Millennial Survey 2016
Asia Developing
USA
UK
Asia Developed
Europe
5%
5%
6%
10%
13%
9%
10%
13%
15%
13%
% male
% female
SOURCE: GLOBAL ENTREPRENEURSHIP MONITOR 2012

71. Most of Asia’s female billionaires are Self-Made
#asiamatters
Successful Role Models
ASIATECHRESEARCH
%ofFemaleBillionairesSelf-Made
(vsinherited)
0
20
40
60
Asia USA Europe
SOURCE: UBS 2016
The last few years have been remarkable
for Chinese businesswomen, so much so
that China is now the de facto capital of
the self-made female billionaires’ club.
- Forbes 27 Nov 2017

72. Asian female billionaires are also significantly younger than Rest of World
#asiamatters
Successful Role Models
ASIATECHRESEARCH
AverageAge(yrs)
0
20
40
60
80
Asia USA Europe
SOURCE: UBS 2016

73. The lack of history in Asian entrepreneurship may create its own advantages
#asiamatters
The Glass Ceiling
ASIATECHRESEARCH
I don’t believe there’s a
“glass ceiling” for
women entrepreneurs
who want to succeed in
the entrepreneurial
field.
-Rina Neoh

74. China leads the US and World Average on Female Participation Rates
#asiamatters
Labor Participation Rate by Females
ASIATECHRESEARCH
%offemalesinemployment
0
20
40
60
80
China USA World India
SOURCE: INTERNATIONAL LABOR ORGANISATION 2016

75. #asiamatters
Change Agents: Youth
ASIATECHRESEARCH

76. #asiamatters ASIATECHRESEARCH
I spent 15 years studying young people for
the telecoms industry starting in the late
90s.Youth were always the earliest to
adopt and adapt technologies,
inadvertently developing the use cases and
business models for later generations

77. Chinese and Indians reach their earning potential 20 years before the US
#asiamatters
Powerful Youth Markets
ASIATECHRESEARCH
0
10
20
30
40
50
60
70
80
90
100
Age
15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+
China
India
USA
SOURCE:ASIA TECH RESEARCH BASED ON UN DATA,
EUROMONITOR, MORGAN STANLEY
IndextoHighestIncomeAgeCategory
(Highest=100)
Youth in China and India are
the highest earners. In the US,
50-60 yr olds earn most.
US peaks 20
years later

78. This generation sense they will be both financially and emotionally better off
#asiamatters
Youth in Asia More Positive
ASIATECHRESEARCH
Emerging-market millennials expected to be
better off financially (71 %) and emotionally
(62 %) than their parents. In developed
markets, only 36% expected to be better off.
- Deloitte Millennial Survey of 8000 across 30
countries

79. Emerging markets in Asia significantly younger
#asiamatters
Asia’s Youth Advantage
ASIATECHRESEARCH
Japan
Germany
Canada
Australia
USA
China
Thailand
Vietnam
Malaysia
India
Myanmar
Philippines 23.5
24.3
27
27.7
29.2
36.2
36.7
37.6
38.3
41.7
46.1
46.1
SOURCE: CIA FACTBOOK 2017
Median Age (yrs)

80. Asia is sitting on a demographic timebomb
#asiamatters
Asia’s Ageing Populations
ASIATECHRESEARCH
India
Malaysia
Indonesia
Vietnam
China
Singapore
South Korea
USA
UK
Japan 41%
30%
27%
38.5%
37%
34%
30.5%
25%
20%
19%
32%
23%
19%
16.5%
15%
13.5%
9%
9%
8%
8%
2012 2050
% of population over age of 60 yrs
SOURCE: CIA FACTBOOK 2017

81. #asiamatters ASIATECHRESEARCH
Graham D Brown
Report Author
Thanks for reading my #asiamatters Report
“The New Home of Entrepreneurship”.To
learn more about what I do, and get regular
updates and insights from my Asian research,
connect with me on Linkedin.
Connect with me on Linkedin

82. download them free from www.AsiaTechResearch.com
#asiamatters
Get All 4 Reports in this Series
ASIATECHRESEARCH