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Tech from Silicon Valley to Shenzhen
  1. Regulation that supports innovation, demand and consumers | Australian Energy Regulator
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  3. Regulation & the Economy
  4. Understanding Southeast Asia As One Tech Market

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Regulation that supports innovation, demand and consumers | Australian Energy Regulator

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Local sites. Connect with us. Risk and regulatory transformation EY — Global. Read more Read less. Latest thinking Four strategies for banks preparing for regulation in the digital age Marc Saidenberg 14 Jan Our latest thinking. Show more Show less. Direct to your inbox Stay up to date with our Editor's picks newsletter.

How EY can help Global Regulatory Network Our Global Regulatory Network, consisting of former regulators and bankers from the Americas, Asia and Europe, provides strategic insights on financial regulation that helps clients adapt to the changing regulatory landscape. Read more. Risk transformation We help boards and CxOs build agile and risk-aware organizations that make better decisions to achieve their strategic objectives.

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Welcome to EY. Mobile-first and mobile-only is a key principle to understand. Smartphones are the very first personal computers for many in Southeast Asia and other emerging markets. As one interviewee explains, in Myanmar alone, people leapfrogged from basically using nothing to a 90 percent mobile penetration. Similarly, smartphone adoption in is expected to hit 67 percent in Indonesia, 71 percent in the Philippines, and 73 percent in Myanmar.

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While it is clear that technology will provide important solutions to local problems, key infrastructure is severely needed and just starting to develop in many of the developing nations. Our findings show that there is a pervasive stereotype toward many countries in Southeast Asia that there is a fundamental lack of tech talent.

In Cambodia, for example, one may not find AI experts very easily, but there is an abundance of app and e-commerce site developers. To succeed as a tech startup, many resources are needed and are impossible to obtain from one country. Singapore is already suffering from a tech talent crunch as it aims to add 1, fintech jobs every year, and Taiwan has a legacy in the hardware industry with an abundance of hardware and software engineers coming from their universities—as 25 percent of all their degrees are in engineering.

This talent could be leveraged substantially for Southeast Asia. Thailand also has a great pool of web designers. Meanwhile, in the Philippines, some tech startups are solving the tech talent crunch by investing in skilling up their engineers in data science and AI by themselves. The startup ecosystem has been growing so fast that most governments in Southeast Asia lack legal frameworks for companies to operate efficiently.

Regulation & the Economy

For example, Vietnam is a new market economy, and the right frameworks to invest in startup companies are nonexistent. The same situation goes for the Philippines regarding investment frameworks, but its government is seriously looking into charting regulations and how they apply to SMEs and startups.

Therefore, many startups from the region choose to incorporate in Singapore as an alternative. Taiwan, on the other hand, is launching strong deregulation efforts and creating a string public and private partnerships through Taiwan Tech Arena and with the launch of the startup visa that is possible to get within four to six weeks.

Understanding Southeast Asia As One Tech Market

In Cambodia, as a few of our interviewees explained, there are issues stemming from a complete lack of formal regulation. While this makes it easy and cost-effective to open an office there, the lack of regulation encourages ambiguous interpretations that could lead to corruption, inefficiencies and red tape. The result is a lot of wasted time and resources figuring out how to comply with this red tape and make the process smoother, which can ultimately kill margins. To succeed as a tech startup, many key resources, mentors and partnerships are needed—and are impossible to obtain from one country alone in Southeast Asia.

Therefore, startups need to leverage several countries at once. As an example of a distributed model to follow, startups could be incorporating and pitching investors in Singapore, leveraging corporate partnerships and investments in Thailand, setting a programming team in Vietnam, picking AI or IoT talent in Taiwan, establishing offices in Taiwan or Malaysia and getting startup visas within four weeks.

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Targeting test markets such as Myanmar or Cambodia and a growth market such as Indonesia are the ways forward. Internet technology through smartphone penetration—and increasingly with distributed ledger networks such as blockchain—will provide a platform for people to solve large-scale problems.