1、1 Dialing up Digital Opportunities in SingaporeDIALING UP DIGITAL OPPORTUNITIES IN SINGAPOREBy Bharath VasudevanThe Path to Success ThroughCorporate Venturing and Alternative Structures2 Dialing up Digital Opportunities in SingaporeBuild tomorrow.3 Dialing up Digital Opportunities in SingaporeConten

2、t01|The path to success through corporate venturing and alternative structures02|Digital opportunity comes in all shapes and sizes03|Case study:GE Genpact04|Singapore is fertile ground for visionary ventures05|BCG X Case Study:Nurturing growth through venture support06|BCG X:Nurturing growth through

3、 venture support0407101215164 Dialing up Digital Opportunities in SingaporeDigital opportunities are transforming strategies of Singapores traditional enterprises,as legacy operators explore innovative new ways to service customers and unlock new business potential.Establishing corporate ventures wi

4、thin existing ecosystems has now become a key strategy for companies seeking to create meaningful ways to generate value.Singapore boasts a thriving digital landscape,with a mobile population penetration rate of 166%and internet penetration of 92%showing the always-on nature of the countrys connecte

5、d population.It serves as a prominent hub for digital innovation,with substantial government investment in infrastructure and skills.As a result,Singapore has emerged as a significant player in the global digital economy,benefiting from evolving trends such as cloud computing,artificial intelligence

6、(AI)and generative AI,and the broader growth of the digital sector.There are numerous successful examples of global and Singaporean enterprises adopting and leveraging this digital-growth opportunity.Lippo Group founded digital payment and services platform Ovo to build value in digital finance,whil

7、e global car brand Volkswagen established mobility platform Hey Car.Aeronautics industry giant Airbus established UP42a developer platform for Earth observation datawhile insurance company AIA established a digital wellness platform,Snackbox.The use cases are diverse,covering a wide range of industr

8、ies across the business ecosystem.01The path to success through corporate venturing and alternative structuresCompanies face unrivalled opportunity to transform and capture value in Singapores innovation-driven landscape,with partners EDB and BCG X offering a platform to succeed in a collaborative i

9、ndustry ecosystem.Dialing up Digital Opportunities in Singapore 5BCG XWhat unites these use cases is a vision of pursuing new opportunities through a corporate venture startup.Established companies unlock these benefits through one of several ways:Fresh opportunity.Starting afresh,unburdened by past

10、 successes and failures,allows a company to move quickly and adapt to changing circumstances.Agile working.Speed and agility are crucial when it comes to unlocking fundamentally new opportunities that are yet to be fully realized and proven.Customer-focus.A customer-focused outlook allows companies

11、to understand the needs and wants of its customers and identify unproven opportunities that may not be obvious to others.Strong platform.Benefits can be amplified with the support of an established parent company that can provide deep domain expertise and attract talent to a new venture,enabling it

12、to focus on customers and markets rather than the fundraising treadmill.Together,these key benefits create a powerful recipe for success,and one which aligns strongly with the expectations of consumers in our increasingly digital-driven landscape.BCG X6 Dialing up Digital Opportunities in Singapore“

13、By structuring these opportunities as new ventures,companies can create growth verticals and experiment with different business models while still protecting their core business.6 Dialing up Digital Opportunities in SingaporeDialing up Digital Opportunities in Singapore 7BCG X02Digital opportunity c

14、omes in all shapes and sizesEvery company has the potential to seed a successful startup and drive innovation within its ecosystemregardless of size,industry of operation,or existing maturity level.All companies have established value chains and deep domain expertise which can be leveraged to unlock

15、 monetization opportunities in adjacent areas.By structuring these opportunities as new ventures,companies can create growth verticals and experiment with different business models while still protecting their core business.This allows them to become disruptors,without being disrupted.The process of

16、 creating disruptive innovation can be divided into five categories,each with its unique set of challenges and opportunities.However,before embarking on this journey,companies must first recognize the potential within their existing operations and leverage current assets to create new value.By doing

17、 so,they can unlock new opportunities and generate significant growth.Vertical ExpansionVertical expansion enables businesses to expand operations across different stages of the supply chain.This can be achieved by establishing a corporate venture that leverages a startup with specific expertise.Dai

18、mler AGs creation of RepairSmitha mobile vehicle repair and maintenance serviceis a prime example of this approach,leveraging the expertise of Daimler AG.This tactic enabled parent company Mercedes-Benz to expand vertically and offer customers a more convenient and cost-effective way to service thei

19、r vehicles.By monetizing their deep domain expertise,Daimler AG was able to establish themselves as an industry leader and create new revenue streams that could fuel their growth and innovation.This type of vertical integration is particularly valuable in industries where there is a need for more co

20、nvenience and efficiency,and where new revenue streams can be hard to come by.By setting up a corporate venture and integrating a startups expertise,companies can establish themselves as industry leaders and create new opportunities for growth and innovation.8 Dialing up Digital Opportunities in Sin

21、gaporeHorizontal ExpansionHorizontal expansion unlocks new value by expanding existing product or domain expertise into new market spaces.The journey of the worlds largest online retailer and marketplace is a compelling case study in how a company can leverage internal capabilities to explore new bu

22、siness opportunities and achieve horizontal expansion.This online retail and marketplace leader launched a subsidiary in 2006 to offer cloud-based services like computing power,storage,databases,and IoT capabilities.Leveraging its e-commerce infrastructure,the subsidiary quickly became a dominant pl

23、ayer in the cloud computing space,capturing over 30%market share today.By leveraging its internal computing power and expertise,it was able to create a new industry in cloud computing,demonstrating how companies can use their strengths to explore new business opportunities and achieve horizontal exp

24、ansion.Adjacent MarketsAdjacent markets offer new opportunities to leverage existing expertise through new strategic ventures.Popular vacation rental company,Airbnb,expanded into China by setting up a startup-like entity called Aibiying,offering personalized experiences,trip planning,and concierge s

25、pecifically tailored to Chinese travelers.Creating this separate entity enabled Airbnb to navigate Chinas unique business environment and cultural differences,providing them a foothold in the significant Chinese market.Adjacent SegmentsExpanding into adjacent domains can provide companies with oppor

26、tunities to diversify their offerings and enter new markets.A Fortune 500 global shipping and supply chain management company recognized the potential of the warehousing and fulfillment industry,inspiring it to expand its capabilities beyond its traditional focus.It launched a new venture in 2018 a

27、tech-driven fulfillment platform that connects merchants with warehouse space and fulfillment services.The platform leverages the companys extensive logistics network and expertise in transportation and package delivery to offer a seamless end-to-end fulfillment solution for businesses of all sizes.

28、By expanding into the adjacent warehousing and fulfillment domain,the global leader in logistics and transportation was able to capitalize on the growing e-commerce market and provide a comprehensive solution for businesses looking to scale their operations.The company demonstrated it could adapt to

29、 meet the changing needs of its customers.Adjacent TechnologiesDialing up Digital Opportunities in Singapore 9BCG XAdjacent TechnologiesExploring adjacent technology domains through startup ventures can provide companies with opportunities to diversify their offerings,expand their customer base,and

30、stay competitive in an ever-changing market.The acquisition of a leading online payments company by an e-commerce pioneer in 2002 is a key example.At the time,the payments company was a startup focused on providing a digital payment platform for e-commerce transactions.Acquiring this company enabled

31、 the e-commerce giant to expand into adjacent technology domains and provide a more comprehensive service to its customers.This strategic move allowed them to offer a secure and convenient payment solution to its users,enabling it to diversify its revenue streams,with the online payments acquisition

32、 becoming a significant contributor to their bottom line.This type of adjacent technology exploration is particularly valuable in industries where there is a need for a more comprehensive service offering.BCG X10 Dialing up Digital Opportunities in SingaporeGenpact was founded in 1997 as a back-offi

33、ce spinout of GE Capitalthe financial division of then-FTSE500 company and American corporate giant General Electric(GE).Genpact is today a globally established company with more than 115,000 employees and a market cap of over US$8 billion,making it one of the most successful and compelling examples

34、 of corporate venturing in the contemporary business ecosystem.In the late 1990s,Head of GE Capitals India unit,Pramod Bhasin,recognized a latent opportunity in the GE Capital business.At that time his division was the first 100%foreign-owned financial services company allowed into India,providing b

35、ack-office services such as processing car loans and credit card transactions.Pramod was inundated with requests from other industry leaders for a tour of the company facilities,which he recognized as underlying demand signal from the industry.The seed was planted to embrace a new vision for back-of

36、fice operations in India.GE Capitals ambition to establish block back-office operations for GE businesses and beyond was originally met by market skepticism.Delivering on this vision would require a large-scale facility unlike anything that existed in the regionhiring vast numbers of people and trai

37、ning them to the globally recognized Six Sigma standards on products they knew nothing about.It would also require GE Capital to convince regional and national governments and telecommunications companies to set up and ensure service and infrastructure at a level previously unheard of in India.This

38、strategy ultimately developed and delivered the genesis of an entire business ecosystem.Pramod recognized that while the specific business case was a challenge,the potential upside was enormous,with the vision of building an operation that could potentially save GE Capital up to 50%spend on existing

39、 services.That opportunity would naturally expand beyond GE to a wide range of companies with similar operational profiles.03Case Study:GE GenpactDialing up Digital Opportunities in Singapore 11BCG XThe momentum for the new unit was huge,rapidly onboarding staff to address the large volumes of work,

40、with the team identifying that successful over-delivery on early projects would be key to sustainable success.Inevitably this early team faced challengesstaff attrition and quality challenges as they tackled new,unknown products.The team faced these challenges with a clear startup mentality,deliveri

41、ng strong early results.They quickly learnt to manage increasingly complex back-office support,such as mortgage applications,auto loan approvals,disbursals,and accounting transactions.This ambitious business approach not only represented the founding of a successful new company,but ultimately trigge

42、red an entirely new industry with an estimated market value in India of US$5 billion today.In 1998,the unit had just 20 people undertaking this work.By 2001,it employed 12,000 people,and by 2005 it emerged as an independent company,going on to list on the NYSE in 2007.Today,Genpact employs over 115,

43、000 people around the world,and its original headquarters in Gurgaon has transformed this semi-urban backwater into a community thats home to a population equivalent to one-fifth the population of Singapore.Source:Harvard Business ReviewThis ambitious business approach not only represented the found

44、ing of a successful new company,but ultimately triggered an entirely new industry.BCG X12 Dialing up Digital Opportunities in SingaporeSingapore provides a fertile landscape for enterprises looking to capture these valuable opportunities,with a supportive startup ecosystem,strong access to funding,a

45、nd a conducive regulatory landscape.The nations wide network of trade agreements,attractive tax and incentive system,and robust intellectual property laws provide a compelling platform for companies looking to realize digital opportunities through new ventures and adjacent opportunities.With Singapo

46、res business-friendly environment and innovation ecosystem,companies have a powerful base to kickstart and succeed in their corporate venturing efforts.Wide network of partners and expertise.A diverse community of global businesses,experienced venture studios,incubators,accelerators,and around 55,00

47、0 start-ups.Access to talent.Access to a breadth of entrepreneurial talent in Singapore to lead ventures,complementing the internal corporate pool of intrapreneurs.Strong funding ecosystem.More than 200 venture capital funds,in addition to a deep base of corporates and family offices as potential co

48、-investors for ventures.Reference market.Ventures can easily pilot and test new products,services,and business models in Singapore,before scaling to other markets,for which Singapore acts as a perfect regional hub.Regional and global connectivity.Singapores connectivity to,and understanding of,key r

49、egional and global markets enables new businesses to scale rapidly.Trusted partner.The Singapore Economic Development Board(EDB)a government agency under the Ministry of Trade and Industryprovides external validation,networks,and support to corporate venturing efforts across venture building,venture

50、 co-investment,and value creation for portfolio ventures.04Singapore is fertile ground for visionary venturesDialing up Digital Opportunities in Singapore 13BCG XSingapore boasts the highest concentration globally of venture capital investments per GDP,is ranked as one of Asias top business hubs,and

51、 has seen close to 80 corporate ventures launched in the country since 2018 alone.EDBs mission is to partner with companies to support them in accessing and navigating this vibrant ecosystem,helping generate growth in adjacent and disruptive verticals.BCG Xthe pioneering new tech build and design di

52、vision of The Boston Consulting Groupis uniquely positioned to support companies in Singapore seeking to kickstart the journey to new markets through venture opportunities.BCG X brings together advanced tech knowledge and ambitious entrepreneurship experience to turbocharge BCGs trusted corporate of

53、fering.BCG X is positioned to help organizations embrace,enable,and succeed on delivering innovation at scale,backed by over 3,000 technologists,scientists,programmers,engineers,and human-centered designers located in more than 80 cities across the globe.BCG X builds and designs platforms and softwa

54、re to address the worlds most important challenges and opportunities,leveraging the established experience of parent company BCG to inform actionable solutions that unlock value in a way that mirrors the venture expansion that this report champions.BCG X incorporates teamwork across all its practice

55、s to deliver collaborative solutions that help clients unlock new possibilities.Together,BCG X can create bold and disruptive products,services,and business for tomorrows rapidly evolving business landscape.BCG X14 Dialing up Digital Opportunities in Singapore“The venture took a unique and different

56、iated approach to provide smallholder farmers with an integrated set of services.14 Dialing up Digital Opportunities in SingaporeDialing up Digital Opportunities in Singapore 15BCG X05BCG X Case Study:Nurturing growth through venture supportMore than 500 million smallholder farmers grow 70%of the wo

57、rlds food,yet they are among the poorest people on the planet.The result?A never-ending cycle of poverty for those who contribute so much to global health but get so little in return.In 2020,BCG brought BCG X to partner with Olam,a major multinational food and agribusiness company,to launch a profit

58、-for-purpose venture called Jiva,dedicated to improving the livelihoods of smallholder farmers in rural agricultural economies.The venture took a unique and differentiated approach to provide smallholder farmers with an integrated set of services:A credit facility that allows farmers to take advance

59、s for high-quality agricultural inputs and repay via harvestAn e-commerce service where farmers can purchase high-quality supplies and have them delivered quickly and without cost A personalised agronomy-advisory engine powered by machine learning that helps minimize crop loss from pests and disease

60、s Direct market access via a farmer application and digitally-supported network of collectors,which allows farmers to sell their crops at the best prices with transparent cost breakdownsIn 2022,the start-up achieved 300%year-over-year growth,earned a market share of 20%to 25%in key operating areas,a

61、nd reached more than 70,000 farmers.Most farmers who have used Jivas agronomy advisory have increased their crop yields by up to 40%,and those selling to Jiva have increased their incomes by as much as 25%.As Jiva builds trust with farmers and digital penetration increases,the company will continue

62、to provide more digitally enabled services to help increase yields and profits further.16 Dialing up Digital Opportunities in SingaporeThe next wave of technological advancement is set to penetrate and transform traditional industries,as technology firms and their practitioners become increasingly i

63、ntegral to the everyday activities of companies regardless of industry or size.The potential of innovative technologies to transform business strategy and unlock new and emerging value is remarkable,with headline-grabbing capabilities like generative AI already disrupting the business landscape.Toge

64、ther with deep availability of funding,these technologies are set to catalyze the growth of business-to-business(B2B)startups that focus on digitizing traditional industries.BGC X is uniquely positioned to assist companies in achieving these goals,supporting companies in ideation,incubation,and cons

65、truction of new ventures.These strategic capabilities will drive the digitization of traditional supply chains by rapidly and effectively building new ventures at scale.BCG Xs significant industry experience,and deeply established partnerships in Singapore and beyond,provide a springboard to launch

66、that growth.Singapore offers the perfect location to launch these corporate ventures,with a welcoming business ecosystem and conducive regulatory support.Programs such as EDBs Corporate Venture Launchpad provide a substantial boost to that opportunity,enabling corporates to rapidly build and scale n

67、ew ventures in Singapore,helping to supercharge growth while mitigating potential risks.In an increasingly collaborative and digitized global landscape,traditional companies have never been better positioned to leverage their existing advantages to innovate,identify,unlock,and capture new value via

68、corporate ventures and adjacent opportunities.06BCG X:Nurturing growth through venture supportBGC X is uniquely positioned to assist companies in achieving these goals,supporting companies in ideation,incubation,and construction of new ventures.These strategic capabilities will drive the digitizatio

69、n of traditional supply chains by rapidly and effectively building new ventures at scale.Dialing up Digital Opportunities in Singapore 17BCG XThis publication is organised as part of the Corporate Venture Launchpad 2.0 an expanded S$20m programme by EDB New Ventures designed to enable companies to i

70、ncubate and launch a new venture from Singapore,supported by venture studios experienced in corporate venture building.BCG X is proud to be an appointed venture studio of the programme.In association withBCG X18 Dialing up Digital Opportunities in SingaporeThe future awaits.Read more about how corporate ventures can succeed in Singapore at www.edb.gov.sgRead more about BCG X at contact:Bharath Vasudevan,Vasudevan.B