This month, three global banks opened up their own innovation labs in Singapore. The fact that Bank of China, Australian Westpac and Deutsche Bank have all opened innovation labs in Asia demonstrates the shift in mentality for larger corporates and institutions towards innovation and an increasingly common pivot towards the East.
It’s not just the Asia-Pacific region’s strong position in the growing fintech industry that attracts banks and large businesses, but the region, in general, is seen as very open to innovation. While China might hit the headlines more frequently for tech news, Singapore has a vibrant innovation and startup scene: it’s home to 2,400 tech startups.
There are a number of reasons why Singapore attracts companies, big and small, to set up an office or innovation lab:
- With the biggest port in the world, Singapore is strategically positioned as a hub of trade and logistics and therefore entry point into the Asia-Pacific region, especially the developing tech ASEAN markets.
- There’s an abundance of talent concentrated in Singapore thanks to some of the best educational institutions in Asia, if not the world. The National University of Singapore is frequently ranked in the Top 25 Universities in the world.
- Singapore’s government are incredibly proactive fostering a culture of innovation and updating government regulations for the 21st century and encouraging innovation and technology. Whether it’s tax breaks for entrepreneurs or the Singapore Economic Development Board to the government introducing the new Open Innovation Program, new regulatory framework that covers cryptocurrencies or startup competitions like SLINGSHOT@SWITCH.
Why Innovation Labs?
Innovation labs, in the form that we are familiar with today, have been appearing since the early 2000s. They are an increasingly popular option for companies looking to experiment with new technologies or collaborate and co-create with others in a ‘safe space’ which is separate from the parent company. It’s a win-win situation for all parties involved: employees can try new things and responsibilities, collaborate with external startups and developers while still having a structured process and pipeline to their parent company’s funding and resources.
From Accenture to Visa, there are plenty of Singaporean innovation lab examples to choose from, which can be grouped into six types. When we think of an innovation lab, we are probably thinking of the most common type – the ‘concept development lab’ – which allows ‘intrapreneurs’, employees with links to the company or industry, to collaborate and co-create with customers and startups. Take Citi’s Innovation Lab in Singapore, launched in 2011, and the first ever to be established in the country. This lab has brought together those inside and outside of the banking industry, including members of academia and local authorities, to great success. Focusing on critical business problems from its clients’ perspective and experience, Citi won ‘Most Innovative Feature Award’ among others for one of its client-focused FinTech solutions in 2017.
Just as popular are the ‘ecosystem’ or ‘venture labs’, which matches the ‘open innovation’ mindset of collaborating with startups and entrepreneurs and making serious venture capitalist investments. PayPal’s Innovation Lab is also part-Incubator and offers its startup cohort access to a wider network of PayPal executives, SMEs and external VCs: successful startups who have graduated from this program include TenX, Axinan and InvoiceInterchange. Similarly, the new Westpac co.lab in Singapore fits the bill and is designed to help Australian fintech startups launch in Asia.
Then, there are ‘skunkworks’ labs with more freedom and long-term vision which helps employees without previous experience or links to the industry to experiment. There is also the ‘showcase’ lab – doing exactly what you think it does – Bank of China’s global fintech innovation lab fits under this category with a focus on R&D and showing off its latest tech, like a robotic customer service officer with facial recognition software
For employees, a ‘makerspace’ lab gives them the time and space to experiment with prototyping and innovative technologies, but can be viewed as just an employee perk or fun afternoon activity. Leading us on to the final type of innovation lab – ‘LINO’ (Lab In Name Only) – think beanbags, a ping-pong table and post-it notes on windows.
Innovation labs should be more than just a PR stunt – a sticking point that can often occur when there is no framework or follow-through by senior management to scale and implement the ideas and prototypes that come out of an innovation lab. While innovation labs are an effective approach to facilitating innovation and integrating disruptive technologies into one’s company and business practices, there are other ways that companies can facilitate innovation and new ideas, which compliment the creation of innovation labs.
Multiple angles and entry points into a company or industry are necessary to encourage diversity, divergent thinking and collaboration with startups and people who companies might not necessarily have otherwise considered. The reason why Singapore is now becoming synonymous with innovation in Asia and remains so attractive to companies and startups is because it’s like a national innovation lab itself! Thanks to the efforts of the Singaporean government to encourage innovation and investment, local talent and startups are collaborating and large companies are flocking to this part of Asia to experiment, collaborate and co-create.
With this in mind, Agorize Asia is excited to announce that we will be opening an office in Singapore from the beginning of 2019. Stay tuned for more details!
Agorize Asia’s Looking East blog post series helps you understand open innovation in Asia. We are the leading platform for innovation challenges and competitions with a global reach and community of more than 5 million innovators.