Government's (Un)Important Role in Asia's Tech Scene

Early this December I got a chance to speak at APEC SME Summit and Open Web Asia 2012 held in Hainan, China. Besides myself, almost every tech blogger from each country in Asia Pacific attended, Japan, Singapore, Vietnam, Malaysia, China, South Korea and also Hongkong. We had an interesting discussion about government's role in the tech industry in each country.

In every country, Government plays a crucial role in nurturing the tech industry from its regulations and policies to either support entrepreneurship or open up for investment from other more mature tech markets. India, for example, brought a lot of investment from foreign countries such as US and various European countries, a different approach taken by the Chinese government who hold foreign investments in order to grow the local domestic economy.

Countries such as Singapore and Malaysia also has a strong government-backed fund/grant for citizens to start a company, hoping it'll strengthen the local economy. In this case, the government is taking a risk by investing the money to the company although according to the term sheet, the government's portion of the company share will be the first to be cashed out. It's actually a really friendly term sheet, a friendly initiative to push entrepreneurship. Unfortunately there's growing trend of people abusing those government grants by using the grant only to get paid with good salary, without being serious or passionate about growing a company.

Indonesia, on the other hand is an emerging tech economy where previously it was a wild-wild west, unregulated. Until now, the government is starting to look at the trend and starts regulating, of course, in our country's best interest. To some extent, some of the regulations are supportive to growth entrepreneurship, or in government's term: creativepreneurship.

One interesting part of our discussion with APAC's leading player in the tech scene was how far should the government go and help nurture the tech ecosystem. As an Indonesian, to be honest, I see Singapore and China as a role model in terms of government involvement in the tech space but one thing changed my mind when it was pointed out that the government "is too deeply involved" in the tech space. In this example, Singaporean government is in too deep in the program that the founders are comfortable giving basically a big chunk of the risk to the government. Of course, there's also a hypothesis that the Singaporean government actually needs to unload the money in order to avoid recession, but I don't have a deeper knowledge to go into that.

In China, the government is also taking a lot of risk by pushing out foreign players which is good because China has local incumbent internet products. But on the other side, it's very hard for local Chinese companies to be able to go and conquer markets outside of China. It's not impossible, there are few examples, but it's relatively hard for most internet companies to expand beyond China.

In short, all these respected tech bloggers have basically a single answer when it comes to government involvement in the tech ecosystem: stay away.

We reached a conclusion where government involvement is undoubtedly crucial in order to grow the tech ecosystem with their regulations. But until a certain point, government has to let go and let the scene grow organically, that's the point where the government should govern and regulate, which is basically what they're supposed to do. Government should be involved in the early stage of the ecosystem, and also in the very mature and globalised technology market. Spaces between those stage should have the least government involvement.

Looking forward for your opinion and comments about government regulations and involvement in emerging market tech ecosystem.