Ayer Rajah could be Singapore’s Silicon Vallery

Thursday, Jan 23, 2014
Grace Chng
The Straits Times
FINALLY, Singapore will have its own hub for start-up companies that thrive from the buzz and shared advice of having like-minded outfits around them.
It could eventually become the Republic’s own Silicon Valley.
The likely move to formalise this centre is one of eight recommendations of the Entrepreneurship Review Committee (EnRC) to foster entrepreneurship here. The recommendations were released last week.
In recent years, excitement over start-ups here has increased. Seed funding, primarily from the Government, has led to many start-ups being founded.
Last year, about 20 start-ups were acquired by various corporations – the ultimate acid test of business success. The largest was the sale of online video streaming portal Viki to Japanese e-commerce giant Rakuten for a reported US$200 million (S$318 million).
A hub for start-ups will help build on this success. Not only is the start-up hub proposal timely, but it should also be anchored by Block 71, amid lush greenery in the Ayer Rajah industrial estate.
Block 71 has already become an unofficial start-up hub, as it is home to more than 100 start-ups, from chapati maker Zimplistic and online travel portal Flocations, to incubators such as NUS Enterprise and tech accelerator Joyful Frog Digital Incubator.
Not a week goes by without a talk, hackathon or an event being held there.
People who want to know about start-ups in Singapore naturally converge at Block 71.
I am privy to discussions on the start-up hub as I am a member of the EnRC.
Suffice to say that the Government is firm on developing the area into Singapore’s Silicon Valley, home to the world’s largest start-ups, venture capital firms and angel investors.
The Ayer Rajah Valley – a name I, not the government agencies, coined – ought to be the start-up hub. It is ready-made, thanks to Block 71.
Having a place to call home is good. But issues still remain.
A quick peek into history: Block 71, a former flatted factory owned by JTC Corporation, began as a special scheme three years ago under the Media Development Authority (MDA) to offer lower rental rates to interactive digital media and gaming start-ups. It also offered space to start-up incubators and venture capitalists.
MDA has 58 tenants including incubators in the five floors it manages. JTC runs the other two floors, also occupied by start-ups.
A few months ago, fears emerged that the precious start-up community in Block 71 would be destroyed when rumours surfaced that the MDA would not renew their three-year leases ending in March this year.
With a long list of start-ups waiting to rent space at Block 71, MDA wanted to turn some tenants out so that others may enjoy the preferential rental rates.
But the MDA delivered a surprise hongbao to its 58 start-up tenants. It informed them last week that their leases will be extended for a year.
A great move from MDA. But what next?
Block 71 will continue to have a scheme of special rental rates for new start-ups.
But who gets to stay and who will get the axe? Will the venture capitalists funding the start-ups have a say? Or will this be the job of bureaucrats?
These issues need settling.
One day, hopefully not too far in the future, Singapore’s own Apple and Google will emerge from the Ayer Rajah Valley.