- By Aung Naing Oo
Importance of start-ups
In developing their economies some big industrialized countries do it through Multi National Companies (MNCs) while some do it through Multinational State Owned Enterprises. But the majority of the countries do this through promoting small and medium enterprises (SMEs). Nowadays, in addition to this method,Start-ups were also being recognized as a practical alternative.
The reasons why many countries were placing emphasis on Start-ups were:
1. Start-ups are centres of innovation
2. Start-ups create more job opportunities
3. Start-ups directly benefit the area where they start up
4. In some countries Start-ups reduce gaps and differences between big cities and small towns
5. Innovation of Start-ups creates new technologies
6. Start-ups increases the GDP of a country
The most obvious outcome of Start-ups was in creating new jobs. Some says Start-ups in the world create more jobs than big companies. Artificial Intelligence (AI), robotic technology and internet technologies came into existence due to innovations of Start-ups in the age of digital economy. Many Start-ups in India were now the primary outsourcing source for MNCs.
Beginning from a few years ago, some of the ASEAN countries were found to be striving toward creating a good ecosystem for Start-ups.Creating a good ecosystem for Start-ups was considered as a first step toward developing good economic prospects for the country. There’s a firm view that creating a workable situation for Start-ups, having a well-trained and qualified labour force and providing attractions to entrepreneurs enable Start-ups to gain momentum, create jobs and support the economic development of a country.
Ecosystem for Start-ups
Multi-angle approaches and arrangements were required for development of Start-ups. In addition to creating capital or financial resources, providing training and creating market for Start-ups, removal of red-tapes and relaxation of regulations and procedures are required. Establishing Start-ups Friendly Policy, changing and relaxing regulations and procedures practiced by government departments are more effective than providing a huge amount of capital or incentives. For Start-ups to gain momentum obstacles for exporting their products must be removed. Trade obstructions were required to be removed or relaxed. In some countries, through cooperation and working together with universities, talented persons were identified and nurtured for Start-ups. Investment opportunities for big companies to invest in the Start-ups were created. Support and assistance were providedto research and development works of Start-ups.
Start-ups in Singapore
Singapore government was seen as cooperating enthusiastically together with various partners with an aim to make Singapore a capital of Start-ups. Preliminary plans were drawn up by Singapore’s Startup SG and Enterprise Singapore to provide financial and other supports to Start-ups. Following are the all round arrangements made by Singapore government for the Start-ups.
1. Startup SG Founder provides necessary guidance and financial support to Start-ups with innovative and new business ideas. For every dollar put up by a Start-up, Startup SG Founder provides three dollars up to 30,000 dollars.
2. Startup SG Tech was found to provide project support fund to Start-ups with new technologies that could change the present market as well as create new market.
3. Startup SG Equity provide investment from Singapore government to Start-ups in deep or high-tech sectors that are usually heavy in research & development making longer-to-reach-market services and products. Singapore government will provide 70 percent of initial investment up to S$ 250,000. Any additional investment by the Start-up will be matched dollar to dollar up to S$2 million.
4. Startup SG Talent programme is a work process established for promising global talent to set up innovative businesses in Singapore and for Start-ups to attract talent to be part of their team.
5. Startup SG Loan in cooperation with financial institutions in Singapore provide loan, capital and financial support to Start-ups to purchase machineries and conduct trade
In developed and some developing countries Incubators were found to be established for Start-ups to conduct their works effectively with least cost. Start-ups were formed in Incubators where information and technologies were shared with other Start-ups as well as cooperating with those Start-ups. Gradually these Incubators became centres of innovation. Governments were also seen to provide required support toward the establishment of Incubators.
Start-ups and Myanmar
According to Myanmar Micro, Small, and Medium Enterprise Survey of private manufacturing enterprises conducted by Ministry of Planning and Finance and UNU-WIDER (United Nations University World Institute for Development Economics Research) in May 2018, majority of businesses in Myanmar were concentrated in central and southern Myanmar and the majority were food manufacturing works. Clothing works were in central Myanmar, wood based works were in northern Myanmar and non-metal mineral works were in southern Myanmar. Innovation is quite rare and most of these works are low technology. Furthermore, machineries used are either locally fabricated or very old second-hand one. Only 20 percent of the works used imported machineries that are reasonably modern technically. Due to technical restraints and limitations manufacturers or producers were weak in technology transfer. As they depend solely on producing one type of product, there rarely is any innovation. Hardly any works had standards, norms and certificates to reach international market said the report.
According to the Myanmar Business Environment Index 2019 survey conducted and published by DaNa Facility, UK Aid and the Asia Foundation65 percent of businesses in Myanmar were conducted with township level licenses. Only about 17 percent were registered in Yangon and Mandalay City Development Committees. A mere 6 percent were registered in Directorate of Investment and Company Administration. 15 percent were not registered anywhere and were somewhat existing or working informally or illegally.
As per the above mentioned situation, for Myanmar businesses to be innovative and produce products up to standards and norms, Start-ups need to be supported as in other countries. Arrangements must be made for proper registration of Start-ups too.
The government had amended the Company Law for all businesses including small businesses to be registered and established as companies.Company registration as well as any company related works could be conducted through MyCO electronic registration system that was established. Following table show the development in establishment of new companies.
Month 2017-2018 2018-2019
August 476 1,810
September 454 2,217
October 341 1,667
November 368 1,437
December 399 1,364
January 466 1,733
February 437 1,419
March 271 1,108
April 542 1,045
May 593 1,411
Total 4,347 15,211
Easing the company registration process was fulfilling thebasicrequirement for Start-ups. Other matters that support Start-ups also need to be established too.In most of the countries today increase in Start-ups results in strengthening of innovation and creativity. Entrepreneurship supports a country’s strength and development. Entrepreneurship is also closely related to establishment and development of Start-ups. The innovation and creativities of Start-ups are vital for a country’s future economy and all are urged to support establishment and development of Start-ups so that Start-ups become a vital pillar in the development of Myanmar.
(Translated by Handytips)