Over the past few decades, Nordic tech companies looking for investment opportunities outside of their home region have often turned to Silicon Valley. It’s natural, given that Nordic emigrants have punched “above their weight” when it comes to Bay-area start ups.
But this is beginning to change. The Nordics are beginning to look less to the US for funding and more to the rapidly growing tech hubs in East Asia. The tech and venture capital industries in Asia are booming, and the Nordics are beginning to take advantage of the vast potential for growth through initiatives that look to strengthen the business ties between Asia and the Nordic countries. The Nordics, with their unique way of living and doing business, are beginning to establish themselves as tech and innovation front runners.
To learn more about these initiatives and the shift in Nordic tech towards Asian markets, we spoke to Lisa Mallner, the Lead Consultant on the Innovation Lab Asia Project, an NGO run by TechBBQ and Asia House Denmark, funded by the Danish Industry Foundation that is working to help Denmark’s tech ecosystem flourish in Asia.
GD: What gave birth to Innovation Lab Asia project?
LM: This project was born out of a desire to help the Danish startup ecosystem globalize and take advantage of the opportunities offered in Asia.
GD: Is the US declining as a powerhouse producer of startups?
LM: China has already overtaken the US in terms of number of startup companies, and no longer dominates in Venture Capital. We have seen the growth of many new powerhouse ecosystems outside Silicon Valley, including Shenzhen, Bangalore, and Singapore.
GD: What are the top reasons for Nordics to look towards Asia instead of… “West?”
LM: I wouldn’t say it’s a question of “instead of,” but about opening up to the best opportunities for your company, regardless of where they may be. We want to raise awareness of the many opportunities for growth and investment in Asia, as ecosystems in Asia are often overlooked in Scandinavia due to a lack of knowledge about them.
Asia is also an extremely diversified region, and opportunities vary tremendously. Here are some examples:
- In Singapore, the first USD $73000 of income generated is tax-free, you can deduct R&D expenses, and there is no capital gains tax;
- A PCB (printed circuit board) can be made in Shenzhen in 20 minutes for less than a Euro – the fastest and cheapest in the world;
- The Taiwan Smart City program allows startups to run pilots using government infrastructure that spans the entire country;
- Startups in South Korea can test on the fastest and most established 5G platform in a real-world setting;
- AI startups can acquire large, diversified, and cheap data sets in India.
GD: Do you think the business ties between the Nordics and Asia will ever be as strong as those with the US?
LM: I think it is important to focus on what opportunities make sense for a particular company and industry. It is not competition. For example, Singapore and Denmark are both small maritime nations with busy ports, and so naturally they have strong business ties. South Korean chaebols (large industrial conglomerates) use Danish audio technology and therefore the two countries work closely together. Many Danish companies use Shenzhen (a Chinese tech industry hub) for their global manufacturing setups.
But it is true that these business ties often don’t extend to the startup ecosystem, and we hope to improve that.
East, it is?
Talking to Lisa, it is clear that there is a great deal of potential as the Nordics look to Asia for manufacturing and trading relationships. Innovation Lab Asia’s article on increased interest in the Nordics from Japanese VCs shows that this feeling is mutual. As the Nordics continue to look East and act on the opportunities presented there, it will be interesting to see the partnerships and products that will result.