e27, 10 Feb 2020
Historically, space tech has always been a government-backed initiative. But what the future needs is something different
Last week, there were exciting moves in the Singapore space tech industry with the incorporation of Singapore Space Tech Limited (SSTL) and its partnership with the strategic investment arm of Defence Science and Technology Agency (DSTA) Cap Vista to launch a space tech accelerator programme.
The updates came out in the midst of space tech’s growth as a promising industry, not just in Singapore, but also in the Southeast Asian (SEA) region.
“For Singapore, the state [of the space tech industry] is getting healthier. There are lots more opportunities today because there is more adoption of satellite technologies. There are more end-user demands from folks like you and me with the use of data on our phones,” explains Jonathan Hung, Executive Chairman of SSTL, in an interview with e27.
“Space might be new and smaller, but there are a lot of companies that leverage on satellite technology. That is a base that has always been here –and that base is growing,” he stresses.
While Singapore has its advantage with the opportunity for companies to go international since Day One, Hung says that younger space tech companies in SEA are also doing well in their home countries, where opportunities are big enough of its own.
“For countries such as Malaysia, Thailand, and Indonesia, the domestic requirements are quite significant already,” he points out.
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In this interview, held in the midst of the Global Space and Technology Convention (GSTC) at Grand Hyatt, Hung explains the challenges and opportunities that SEA space tech industry is currently facing –and what we can do to propel this industry forward.
The space today
If we look throughout the global history –especially on issues such as the space race between the US and Soviet Union in the past– we can see that the space tech industry has always been a government-backed initiative.
According to Hung, this is due to the nature of space tech as a high-risk investment.
“Without the government’s support, it is quite hard to justify the space programmes that have been in existence,” he says.
But if we look at the space tech industry in Singapore and SEA today, the picture is a bit different.
“Singapore approach has always been commercial first, then it must be able to stand on its own two feet. The government will support, but it should not be the main driver,” Hung elaborates further.
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“In many of the emerging countries and our partners in the region, a lot of the startups –or I would rather say private enterprises– go to the government for support with regulations and the like. But the dream, and the business plan, are all driven commercially. The government can encourage and allow private companies to flourish, but the private should be able to take the lead,” he continues.
In later quarters of 2019, as coworking space giant WeWork failed to launch its IPO, tech startups of various verticals found themselves being scrutinised further by the public to justify their valuation and prove their ability to make profits.
But the case is different with space tech startups.
“There’s a very specific outcome-driven attitude when you build a space tech startup versus property tech or even software solutions,” Hung says.
“In the space industry, especially if you are in the rocket sector, the outcome should just go out. There is no two-way about it. Yes, there are delays, but they are quantifiable,” he continues.
For Hung, the issue lies more with the high-risk nature of the investment itself.
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“Investors need to be educated about this, especially the new ones … This is what SSTL and Singapore Space Tech Association (SSTA) have been doing. We are educating investors that are coming to our startup programmes that this has a slightly longer gestation period,” he stresses.
The space tomorrow
When asked about how the year 2020 (and beyond) is going to look like for SEA space tech industry, Hung shows his optimism. While he does not think it will be a “special” year, he sees that there will be more progress.
“A lot of the traditional space companies will be more ready to adopt new concepts into their business models –so that they don’t get disrupted,” he says.
This is a trend, he closes, that is already happening today, especially with the rate of disruption.
Image Credit: Klemen Vrankar on Unsplash