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1、Policies to Promote Private Sector Engagement in Science,Technology and InnovationWorkbookChapter 0Acknowledgements ii The shaded areas of the map indicate ESCAP Members and Associate Members.*The Economic and Social Commission for Asia and the Pacific(ESCAP)is the most inclusive intergovernmental p

2、latform in the Asia-Pacific region.The Commission promotes cooperation among its 53 member States and 9 associate members in pursuit of solutions to sustainable development challenges.ESCAP is one of the five regional commissions of the United Nations.The ESCAP secretariat supports inclusive,resilie

3、nt,and sustainable development in the region by generating action-oriented knowledge,and by providing technical assistance and capacity-building services in support of national development objectives,regional agreements,and the implementation of the 2030 Agenda for Sustainable Development.*The desig

4、nations employed and the presentation of material on this map do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country,territory,city or area of its authorities,or concerning the delimitation of its frontier

5、s or boundaries.Chapter 0Acknowledgements iii Policies to Promote Private Sector Engagement in Science,Technology and Innovation Workbook Chapter 0Acknowledgements iv United Nations Publication Copyright United Nations 2024 All rights reserved ESCAP/2-TR/1 References to dollars($)are to United State

6、s dollars unless otherwise stated.The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country,territory,city or area,or of its

7、authorities,or concerning the delimitation of its frontiers or boundaries.Where the designation“country or area”appears,it covers countries,territories,cities or areas.Bibliographical and other references have,wherever possible,been verified.The United Nations bears no responsibility for the availab

8、ility or functioning of URLs.The views expressed in this publication are those of the authors or case study contributors and do not necessarily reflect the views of the United Nations.The opinions,figures and estimates set forth in this publication are the responsibility of the authors and contribut

9、ors and should not necessarily be considered as reflecting the views or carrying the endorsement of the United Nations.Any errors are the responsibility of the authors.Mention of firm names and commercial products does not imply the endorsement of the United Nations,and any failure to mention a part

10、icular enterprise,commercial product or process is not a sign of disapproval.The use of the publication for any commercial purposes is prohibited,unless permission is first obtained from the Secretary of the Publication Board,United Nations,New York.Request for permission should state the purpose an

11、d the extent of reproduction.Chapter 0Acknowledgements v AcknowledgementsAcknowledgements This workbook was produced by the Trade,Investment,and Innovation Division of the United Nations Economic and Social Commission for Asia and the Pacific(ESCAP).It was written by Mr.Apiwat Ratanawaraha,Associate

12、 Professor,Department of Regional and Urban Planning,Center for Science,Technology,and Society,Chulalongkorn University,under the supervision of Mr.Rafael Torquato Cruz,Project Coordinator,Innovation,Enterprise and Investment Section,with the strategic direction provided by Ms.Marta Prez Cus,Economi

13、c Affairs Officer,and with the support of Mr.Titipong Mahattanasin,Intern.This workbook is the summative result of ESCAP advisory support on policies to promote private sector engagement in science,technology,and innovation(STI)for Cambodia,the Lao Peoples Democratic Republic,Thailand and Viet Nam.I

14、t compiles experiences and insights from those countries and abroad,offering a comprehensive understanding of the challenges and opportunities for policies that promote private sector engagement in STI.The workbook incorporates a literature review and insights drawn from three Webinars and a policy

15、dialogue workshop,during which participants including policymakers,private sector representatives,academics and intermediaries shared valuable experiences and submitted a policy self-assessment survey,contributing significantly to the examples and case studies presented.The input and perspectives pr

16、ovided by panellists and keynote speakers during these activities were instrumental in shaping the content of this workbook,ensuring its practicality and relevance for policymakers and STI professionals.Gratitude is extended to the following institutions for their pivotal roles in facilitating and c

17、oordinating the engagement of key stakeholders from the four countries:General Department of Science,Technology and Innovation,Ministry of Industry,Science,Technology and Innovation,Cambodia Department of Science,Ministry of Education and Sports,Lao Peoples Democratic Republic Office of National Hig

18、her Education,Science,Research and Innovation Policy Council(NXPO),Ministry of Higher Education,Science,Research and Innovation,Thailand State Agency for Technology Innovation,Ministry of Science and Technology,Viet Nam Special thanks is extended to NXPO for hosting the policy dialogue workshop and

19、other networking activities,which contributed significantly to the exchange of ideas and insights that informed this workbook.The manuscript was edited by Ms.Mary Ann Perkins.Ms.Su-Arjar Lewchalermvongs provided all the administrative support for producing the report.Layout and cover design was prep

20、ared by Mr.Titipong Mahattanasin.Chapter 0Abbreviations and acronyms vi AbbreviationsAbbreviations and acronymsand acronyms CLTV Cambodia,Lao Peoples Democratic Republic,Thailand and Viet Nam ESCAP United Nations Economic and Social Commission for Asia and the Pacific IP intellectual property R&D re

21、search and development SMEs small and medium-size enterprises STEM science,technology,engineering and mathematics STI science,technology and innovation Chapter 0Table of Contents vii Table of Table of ContentsContents Acknowledgements.v Abbreviations and acronyms.vi Table of Contents.vii List of Box

22、es.viii List of Tables.ix 1.1.Policies to promote private sector engagement in science,technology and innovation Policies to promote private sector engagement in science,technology and innovation-An introductionAn introduction .1 1 2.2.Support for the scaling up of startupsSupport for the scaling up

23、 of startups .4 4 2.1.2.1.Support for startup growth beyond seed fundingSupport for startup growth beyond seed funding .4 4 2.1.1.Key policy considerations for scaling up startups.5 2.1.2.Policy instruments to support the growth of startups.7 2.2.2.2.Public procurement policies for startup growthPub

24、lic procurement policies for startup growth .2424 2.2.1.Key considerations when designing public procurement policies for startup growth.25 2.2.2.Designing public procurement policies to support startups.26 2.3.2.3.Reflection questionsReflection questions .3232 2.4.2.4.ConclusionsConclusions .3333 3

25、.3.Building human resources capacity through private sector engagementBuilding human resources capacity through private sector engagement .3535 3.1.3.1.Private sector investment in developing STI human resourcesPrivate sector investment in developing STI human resources .3535 3.1.1.Corporate strateg

26、ies for building STI workforce.36 3.1.2.Key considerations for policies engaging the private sector to build STI human resources.40 3.1.3.Policy instruments to support the private sector in building STI human resources.42 3.2.3.2.Talent mobility programmesTalent mobility programmes .4747 3.2.1.Key c

27、onsiderations for talent mobility policies.48 3.2.2.Policy instruments for talent mobility.49 3.3.3.3.Reflection questionsReflection questions .5656 3.4.3.4.ConclusionsConclusions .5757 4.4.Strategic considerationsStrategic considerations .5959 4.1.4.1.An innovation ecosystem An innovation ecosystem

28、 cannot be built by topcannot be built by top-down policies alonedown policies alone .5959 4.2.4.2.Networks as an implementation strategyNetworks as an implementation strategy .6060 4.3.4.3.Intermediaries as essential actorsIntermediaries as essential actors .6262 Chapter 0List of Boxes viii List of

29、 List of BoxesBoxes Box 2.1:Tax incentives and credits:Viet NamViet Nam.9 Box 2.2:Tax incentives and credits:SingaporeSingapore.9 Box 2.3:Private sector support for CambodianCambodian startups.11 Box 2.4.Government co-investment programmes:ThailandThailand.11 Box 2.5.Government co-investment program

30、mes:United KingdomUnited Kingdom.12 Box 2.6.Public-private partnerships for investment funds:ThailandThailand.14 Box 2.7.Public-private partnerships for investment funds:Republic of KoreaRepublic of Korea.14 Box 2.8.Regulatory sandbox:Lao Peoples Democratic RepublicLao Peoples Democratic Republic an

31、d ThailandThailand.16 Box 2.9.Regulatory sandbox:United KingdomUnited Kingdom.17 Box 2.10.Access to regional and global markets:ThailandThailand.18 Box 2.11.Access to regional and global markets:Republic of KoreaRepublic of Korea and SingaporeSingapore.18 Box 2.12.Research and development grants:Tha

32、ilandThailand.19 Box 2.13.Research and development grants:Hong Kong,ChinaHong Kong,China,and JapanJapan.20 Box 2.14.Intellectual property protection and patents:Viet NamViet Nam.20 Box 2.15.Intellectual property protection and patents:IndiaIndia.21 Box 2.16.Entrepreneurial education and training:Cam

33、bodiaCambodia.22 Box 2.17.Innovation labs:Viet NamViet Nam.23 Box 2.18.Innovation hubs:ThailandThailand.24 Box 2.19.Simplified procurement processes:ThailandThailand.26 Box 2.20.Simplified procurement processes:United KingdomUnited Kingdom.27 Box 2.21.Market access and opportunity creation:ThailandT

34、hailand.27 Box 2.22.Market access and opportunity creation:Republic of KoreaRepublic of Korea and the European UnionEuropean Union.28 Box 2.23.Capacity-building to participate in public procurement:DenmarkDenmark and the European UnionEuropean Union.28 Box 2.24.Policy and regulatory reforms in publi

35、c procurement:Lao Lao PDRPDR,ThailandThailand and Viet NamViet Nam.29 Box 2.25.Policy and regulatory reforms in public procurement:United KingdomUnited Kingdom.30 Box 2.26.E-bidding and electronic procurement infrastructure:United KingdomUnited Kingdom.31 Box 3.1.Academia-industry collaboration:Camb

36、odiaCambodia and IndiaIndia.38 Box 3.2.Corporate-founded universities specializing in STI:ThailandThailand and EgyptEgypt.39 Box 3.3.Skills and entrepreneurship development grants:ThailandThailand.42 Box 3.4.Skills and entrepreneurship development grants:JapanJapan.43 Box 3.5.Workforce development p

37、artnerships:ThailandThailand.44 Box 3.6.Workforce development partnerships:Republic of KoreaRepublic of Korea.44 Box 3.7.Research and development collaboration incentives:ThailandThailand.45 Box 3.8.Apprenticeship and Internship Support:ThailandThailand.45 Box 3.9.Apprenticeship and internship suppo

38、rt:SingaporeSingapore.46 Box 3.10.Research commercialization support:ThailandThailand.47 Box 3.11.Research and innovation grants:ThailandThailand.47 Box 3.12.Brain circulation:Viet NamViet Nam.51 Box 3.13.Brain circulation:Republic of KoreaRepublic of Korea.51 Box 3.14.Research secondments:ThailandT

39、hailand.52 Box 3.15.Research secondments:SingaporeSingapore.53 Box 3.16.Joint research projects and centres:ThailandThailand.54 Box 3.17.Joint research projects and centres:JapanJapan.54 Box 3.18.Research fellowships:Republic of KoreaRepublic of Korea.55 Chapter 0List of Tables ix List ofList of T T

40、ablesables Table 2.1.Key policy thrusts to scaling up startups.5 Table 2.2.Overview of tax incentives and credits.8 Table 2.3.Steps to design effective government co-investment programmes for startups.10 Table 2.4.Key considerations for public procurement policies targeting startup growth.25 Table 3

41、.1.Factors for successful corporate strategies to build STI human resources.39 Table 3.2.Key considerations for policies to support the private sector in building STI human resources.41 Table 3.3.Key considerations for talent mobility policies.48 Chapter 1.Policies to promote private sector engageme

42、nt in science,technology and innovation An introduction 1 1.1.P Policies to promote private sector olicies to promote private sector engagement in engagement in science,technology science,technology and innovationand innovation A An n introductionintroduction The private sector is crucial in science

43、,technology and innovation(STI)activities and is a major force shaping and strengthening STI ecosystems.In developed economies and emerging economies alike,private firms not only invest substantially in research and development(R&D),but they also develop cutting-edge technologies,create new business

44、 models and pioneer emerging sectors,such as digital health,renewable energy and artificial intelligence.Private sector efforts are also essential in building a nations STI capabilities,as they enhance the knowledge and skills of the workforce for advanced STI activities.But private firms in develop

45、ing countries face formidable challenges to invest in STI.They have limited access to finance and to skilled STI personnel to pursue new ideas and technologies.They also have to overcome substantial legal and regulatory hurdles,such as complex bureaucracies and inadequate intellectual property(IP)pr

46、otection.Drawing primarily upon experiences from Cambodia,the Lao Peoples Democratic Republic,Thailand and Viet Nam(CLTV),this workbook aims to explore context-specific policies that can promote private sector engagement in STI in developing countries.The goal is to enable the private sector to expa

47、nd its role in building a strong STI ecosystem.1 See www.unescap.org/projects/south-south-triangular-collaboration-programme-science-technology-innovation.This chapter outlines this workbooks background and rationale,objectives and scope,methodology and structure.Background and Background and r rati

48、onaleationale In 2022,the United Nations Economic and Social Commission for Asia and the Pacific(ESCAP)facilitated the co-creation of a comprehensive South-South and Triangular Collaboration Programme on STI among CLTV.1 A pivotal element of this programme was the recognition of the private sectors

49、crucial contribution to STI for sustainable growth and innovation.This workbook provides key pointers for policymakers in the region and beyond seeking to further engage the private sector in STI,particularly to facilitate the growth of startups and to foster human resource development.Objectives an

50、d scopeObjectives and scope This workbook is a practical resource for policymakers and STI professionals,offering tools,insights and lessons learned that can help in formulating and implementing effective policy instruments to promote private sector engagement in STI.It draws upon illustrative examp

51、les that are particularly relevant to the CLTV context while also relevant to other developing economies.Chapter 1.2 This workbook addresses two pivotal challenges confronting policymakers:Scaling up startups:Scaling up startups:Building a conducive ecosystem for startups is of paramount concern for

52、 policymakers,in particular the specific challenges of supporting startups as they progress beyond the initial seed-funding phase and as they seek to participate in public procurement.Building human resource capacity through Building human resource capacity through private sector participation:priva

53、te sector participation:This workbook explores two specific opportunities to build STI human resources through private sector participation:a)engaging large corporations to invest in building STI capabilities,both internally and externally;and b)developing talent mobility programmes to facilitate th

54、e movement of STI personnel,particularly between academia and industry.MethodologyMethodology This workbook synthesizes insights,experiences and best practices from a diverse group of stakeholders and sources.It contains an extensive review of relevant publications,and it draws heavily on stakeholde

55、r consultations,involving primarily semi-structured interviews with CLTV policymakers,industry leaders and academics to identify context-specific challenges,opportunities and options relevant to the topics at hand.Three expert-led webinars also informed the development of this workbook.Workbook stru

56、ctureWorkbook structure The focus of chapter 2 is on supporting the scaling up of startups.This includes options to support startups beyond seed funding,followed by opportunities to design public procurement policies in a manner that support startups.In chapter 3,two avenues for building human resou

57、rces capacity through private sector engagement are discussed.The focus of the first part is on ways in which corporates build STI human resources and how Governments can further support such efforts.The focus of the second part of the chapter is on talent mobility programmes as a tool to promote th

58、e development of STI human resources.Chapter 4 introduces three strategic considerations to engage the private sector in building a robust and dynamic STI ecosystem that are particularly relevant when scaling up startups and investments in STI human resources.Figure 1 provides a schematic overview o

59、f the contents of this workbook.Chapter 1.Policies to promote private sector engagement in science,technology and innovation An introduction Chapter 1.3 Figure 1.Promoting private sector engagement in STI:An overview Chapter 1.Policies to promote private sector engagement in science,technology and i

60、nnovation An introduction Chapter 2.Support for the scaling up of startups 4 2.2.Support for the scaling up of Support for the scaling up of startupsstartups Startups in CLTV face not only the common hurdles inherent to any new business but also the unique obstacles and specific constraints of the e

61、conomic contexts in which they operate.For instance,access to capital can be significantly more limited,as financial markets may not be as mature,and the regulatory environments can be unpredictable.Infrastructure issues,such as unreliable Internet access and energy supply,and a shortage of skilled

62、labour further compound the difficulties faced by CLTV startups.These factors collectively amplify the risk and complexity of establishing and growing a startup in CLTV and other developing economies.Several private-sector initiatives in CLTV are fostering the growth of startups.These initiatives pr

63、ovide resources,innovation and market-driven strategies vital for startup success.They bring to the table agility,niche expertise and investment capabilities that are crucial for nurturing young businesses.However,government involvement remains indispensable to maximize the impact of these efforts a

64、nd to bridge gaps that the private sector alone may not address.Public sector participation brings legitimacy,scale and a range of additional benefits.It offers regulatory support and can create a favourable policy environment that encourages entrepreneurial activity.Governments can facilitate acces

65、s to domestic and international networks,provide substantial funding opportunities and ensure sustainable development through its broader reach.While Governments have supported startups,for example,by establishing startup incubators and providing initial grants;the scaling up of startups beyond thei

66、r initial establishment remains an elusive goal.Scaling up after the seed stage involves significant investment.Bridging the gap between initial support and significant growth requires substantial resources.Series A funding typically supports startups transitioning from the development stage to scal

67、ing their user base and optimizing their product or service offerings.Series B funding,on the other hand,is aimed at companies that have established a strong market presence and are looking to expand their operations,enter new markets,or develop new products to accelerate growth.This chapter explore

68、s two avenues of government support for scaling up startups:supporting startup growth beyond seed funding;and harnessing public procurement policies for startup growth.2.1.Support for startup growth beyond seed funding Government support for startups may foster inclusivity in entrepreneurship,ensure

69、 equitable access to resources across different regions and demographics,and purposefully encourage startups that seek to address specific societal and environmental challenges.By aligning the innovative drive of the private sector with the structural and regulatory strengths of the public sector,a

70、more robust and effective ecosystem for startup growth can be established.Chapter 2.Support for the scaling up of startups 5 In CLTV and other developing countries,the need for government support in the growth and expansion of startups is particularly crucial in three areas:1.Access to growth capita

71、lAccess to growth capital:The financial markets in developing countries are often less mature,making it hard for startups to find investors willing to take risks on new ventures.Government support,through direct funding or incentivizing private investments,can help bridge this capital gap.Government

72、 intervention can also help to simplify bureaucratic hurdles and provide clarity on legal and financial compliance for startups.Government endorsement of or support for selected startups can give them credibility,and this can be crucial in attracting further investment,especially in series A and B f

73、unding rounds where the stakes are higher.2.Access to marketsAccess to markets:Governments can assist startups in accessing markets,establishing a customer base and building professional connections.Governments can significantly bolster market access by fostering public-private partnerships,simplify

74、ing regulatory environments and creating digital platforms that facilitate connections and transactions.By enabling easier integration into existing supply chains and providing tools to navigate the complexities of international trade,these initiatives can help startups to overcome common market ent

75、ry barriers.Simplified business processes and procurement policies and digital marketplaces not only reduce the administrative burden on startups but also open up new opportunities for growth and expansion.3.Mentorship and skill developmentMentorship and skill development:Startups often need guidanc

76、e in business operations,strategy and scaling up.Government-led programmes offering mentorship and training can equip entrepreneurs with the skills necessary for their business growth and for transitioning from initial seed funding to series A and B funding rounds.Moreover,by investing in infrastruc

77、ture,education and R&D,Governments can create an innovation-friendly ecosystem that nurtures a pipeline of talent and ideas,supporting the startup landscape.2.1.1.Key policy considerations for scaling up startupsAddressing the challenge of scaling up startups in CLTV and other developing countries r

78、elies on strategic and well-considered policymaking(table 2.1),given the constraints of limited resources and capabilities.Table 2.1.Key policy thrusts to scaling up startups Creating a Creating a favourable favourable regulatory regulatory environmentenvironment Simplify business registration and l

79、icensing procedures to reduce bureaucratic hurdles Implement tax incentives for startups and potential investors Establish clear and stable legal frameworks for business operations,IP protection and dispute resolution AccessingAccessing finance finance Facilitate access to capital through government

80、-funded grants,loans and equity financing Encourage the development of venture capital and angel investor networks Offer guarantees or co-investment funds to reduce risks for private investors Chapter 2.Support for the scaling up of startups 6 Building Building infrastructure infrastructure Invest i

81、n high-quality internet and telecommunications infrastructure Develop physical infrastructure such as technology parks,incubators and co-working spaces Ensure reliable and affordable energy and transportation networks Fostering Fostering education and education and skills skills development developm

82、ent Enhance the quality of education in science,technology,engineering and mathematics.Support vocational training and mentorship programmes tailored to entrepreneurial and technical skills Encourage partnerships between educational institutions and the private sector to align skills with market nee

83、ds Promoting Promoting research and research and innovation innovation Increase funding for R&D,especially in technology and innovation Encourage collaboration between universities,research institutions and startups Offer incentives for R&D activities within startups Developing Developing entreprene

84、urial entrepreneurial ecosystems ecosystems Support the creation of networks and clusters that connect startups with mentors and peers Facilitate the sharing of knowledge and best practices through workshops and networking events Encourage the formation of associations or organizations that represen

85、t the interests of startups Fostering Fostering international international collaboration and collaboration and market access market access Foster partnerships with international organizations and other Governments to gain access to global markets Help startups to navigate international trade regula

86、tions and standards Promote participation in international trade fairs and business matchmaking events Addressing social Addressing social and and environmental environmental challenges challenges Incentivize startups that are addressing key social and environmental issues Integrate sustainability a

87、nd social impact criteria into funding and support programmes Monitoring and Monitoring and evaluation evaluation Implement mechanisms to regularly assess the impact of policies and programmes supporting startups Be flexible and willing to adapt policies based on feedback and changing market dynamic

88、s Supporting good Supporting good governancegovernance Establish robust governance frameworks and strengthen governance with transparent regulations and accountable institutions,fostering a stable,trustworthy environment essential for attracting startup investments Promote policy consistency and sta

89、bility and ensure consistent,reliable governmental policies to build investor confidence and support sustainable entrepreneurial growth By considering these key needs,government policymakers can create an environment that nurtures startups,fosters innovation and contributes to economic growth and de

90、velopment.It is crucial that policies are implemented with a long-term vision and are adapted as the startup ecosystem evolves.Chapter 2.Support for the scaling up of startups 7 2.1.2.Policy instruments to support the growth of startups This section outlines a range of policy instruments designed to

91、 support the growth of startups,including policies and programmes that are crafted specifically for startups,providing them with direct assistance and resources,as well as policies focusing on enhancing STI ecosystems that indirectly support startups.2.1.2.a.Tax incentives and credits Tax incentives

92、 and credits are crucial mechanisms for Governments to encourage investment in startups.Direct Direct tax credits tax credits for for investorsinvestors:Investors receive a reduction in their tax liability proportional to the amount invested in startups.This directly lowers the financial risk for in

93、vestors,making startup funding more attractive.Tax Tax deductions deductions for for startup investmentsstartup investments:Investors can deduct the amount invested from their taxable income.This incentive encourages investment but requires balancing.It is important to consider how deductions may im

94、pact the overall tax base and whether they disproportionately benefit wealthier investors.Deferred Deferred tax payments tax payments and and capital gains capital gains exemptionsexemptions:Investors may defer tax payments or be exempt from capital gains tax,especially for long-term holdings.This p

95、romotes long-term investment in startups,crucial for their stability.The policys effectiveness depends on the specified holding period and how it aligns with startup growth trajectories.R&D R&D tax creditstax credits:Startups receive tax relief for expenditures on R&D.This lowers the cost barrier fo

96、r innovation,but it raises questions about the definition of qualifying R&D activities and how to measure their direct impact on startup success.SectorSector-specific tax incentivesspecific tax incentives:Investors receive tailored tax benefits for investments in high-potential yet high-risk sectors

97、.While this guides investment into strategic sectors,it may create market distortions.The challenge lies in ensuring these incentives do not lead to neglect of other important sectors that lack tax incentives.By implementing these varied forms of tax instruments,Governments can reduce the financial

98、risks and burdens for investors,making investments in early-stage companies more attractive.This approach encourages the flow of capital into the startup ecosystem,which is crucial for growth and development.Each type of tax incentive has benefits and challenges(see overview in table 2.2)that policy

99、makers need to carefully evaluate during the policy design and implementation stages.Tax incentives are usually aimed towards investors rather than the startups themselves and they can manifest in different forms,as seen in Viet Nam(box 2.1)and Singapore(box 2.2).Chapter 2.Support for the scaling up

100、 of startups 8 Table 2.2.Overview of tax incentives and credits BenefitsBenefits ChallengesChallenges Direct Direct tax credits tax credits for for investorsinvestors Boosting investments in emerging STI fields,critical for technological and scientific advancements in developing countries Helping to

101、 bridge the gap where traditional funding sources are scarce Encouraging more individuals and entities to invest in startups,diversifying the investor base Providing a straightforward incentive that is easy for investors to understand and apply for Determining the appropriate size of tax credits to

102、balance investor attraction with fiscal responsibility(that is,long-term impact on government revenues),which requires a careful assessment to prevent potential revenue losses that could be significant for economies with limited fiscal space.Dealing with the risk that credits will be misused or expl

103、oited by investors who prioritize tax benefits over the viability of startups Tax Tax deductions deductions for for startup investmentsstartup investments Making investments in startups financially more appealing,possibly leading to larger investment amounts Stimulating investments across a broader

104、range of startups,not just in high-growth sectors Possibly reducing the overall tax base,affecting government revenue,which may be critical for developing countries with already constrained budgets Ensuring the policy does not disproportionately favour wealthy investors,thereby widening economic dis

105、parities Monitoring and enforcing compliance,ensuring only legitimate STI investments benefit Deferred Deferred tax payments tax payments and and capital gains exemptionscapital gains exemptions Encouraging long-term investment,providing startups with more stable and sustained funding Potentially in

106、creasing the return on investment,attracting more risk-averse investors Attracting foreign investors looking for favourable tax regimes Determining the optimal holding period for tax benefits to ensure long-term commitment without locking in funds excessively Balancing the future tax revenue implica

107、tions with immediate economic growth needs R&D R&D tax creditstax credits Directly supporting innovative research,a cornerstone for STI development in emerging economies Helping startups in developing countries to overcome the high costs associated with cutting-edge research Developing countries may

108、 struggle to define eligible R&D activities and ensure that these credits are effectively targeted Incurring the risk of insufficient funding to cover these credits,given the limited budgets in many developing countries SectorSector-specific tax incentivesspecific tax incentives Driving investment t

109、owards sectors that are strategically important for national development,such as renewable energy or biotechnology Helping to build specialized clusters of innovation that can accelerate overall STI growth Managing the risk of neglecting other crucial sectors not covered by the incentives,which can

110、lead to imbalanced development Continuously adapting as the countrys STI priorities and global technological trends evolve.Chapter 2.Support for the scaling up of startups 9 Box 2.1:Tax incentives and credits:Viet Nam The Government of Viet Nam aims to attract high-tech startups and facilitate techn

111、ology transfer,thereby enhancing the overall startup ecosystem in Viet Nam.Specifically,Decree No.13/2019/ND-CP effective from 20 March 2019,outlines comprehensive investment incentives,including reduced corporate income tax rates,import duty exemptions and land rent reductions.Enterprises engaged i

112、n R&D can benefit from corporate tax exemption for four years and a 50 per cent reduction for the following nine years,provided their scientific and technological projects account for at least 30 per cent of total turnover.These incentives are particularly beneficial for startups as they significant

113、ly lower initial cost barriers and operational expenses.Furthermore,startups willing to set up or expand in underdeveloped areas are eligible for additional tax incentives,supporting not only the startups but also aiding the economic development of these regions.This creates a win-win situation for

114、both the startups and the local communities.Startups involved in importing goods for software production or scientific research can benefit from customs duty exemptions.They also enjoy land rental charge exemptions for projects in certain sectors or locations,significantly reducing their operational

115、 costs and easing their establishment and growth.Sources:Mark Barnes,2023,“Investing in Vietnamese Startups:Quick Guide 2023”.Vietnam Briefing,3 February.Available at www.vietnam- Source of Asia,2023,“Start-up in Vietnam:A promising and favorable ecosystem”.Available at 2.2:Tax incentives and credit

116、s:Singapore The Productivity and Innovation Credit scheme,20112018,was designed to promote business innovation and productivity in Singapore.It focused on six key activities:R&D;acquisition and leasing of information technology and automation equipment;employee training;approved design projects;acqu

117、isition and licensing of IP rights;registration of patents,trademarks,designs,and plant varieties.A notable feature of the scheme was the provision for a 400 per cent tax deduction for qualifying activities.This meant that for each dollar spent on these activities,companies could reduce their taxabl

118、e income by four dollars.Businesses could claim this deduction on investments up to SGD 400,000(USD 298,100)annually for each qualifying activity.Alternatively,businesses had the option to choose a 60 per cent cash payout on their investment in these activities,limited to SGD 100,000(USD 74,500).Thi

119、s option was particularly advantageous for smaller businesses or startups facing liquidity constraints.To be eligible for the benefits,businesses were required to have active operations in Singapore and employ at least three local employees,excluding shareholders who are directors of the company.Fro

120、m 2013 to 2015,the scheme included a dollar-for-dollar matching cash bonus in addition to the tax deductions or cash payouts.The cash payout rate initially stood at 60 per cent,but was later reduced to 40 per cent.The scheme also included a tax deferral option,capped at SGD 100,000(USD 74,500).Sourc

121、e:See www.iras.gov.sg/taxes/corporate-income-tax/specific-topics/productivity-innovation-credit-(pic)-scheme.Chapter 2.Support for the scaling up of startups 10 2.1.2.b.Government co-investment programmes The private sector has invested in startups through various investment channels,including priva

122、te equity and venture capital,as seen in Cambodia(box 2.3).Meanwhile,Governments have initiated co-investment programmes,matching private sector investments in startups as seen in Thailand(box 2.4)and the United Kingdom(box 2.5).Co-investment serves to mitigate financial risks for private investors,

123、as the Government shares the investment burden,making the proposition of investing in early-stage startups more attractive.Co-investment not only leverages private capital,encouraging investors to commit more funds,but also drives innovation and job creation,especially in sectors aligned with nation

124、al interests such as green technology or health care.Moreover,government participation in these investments can significantly boost investor confidence,attracting further domestic and international investments.For the startups themselves,co-investment enhances their credibility in the market,easing

125、their path to attract additional funding and partnerships.However,it is crucial that these programmes are carefully designed to complement rather than replace private investment,focusing on startups with high growth potential and the ability to significantly impact the economy and society.The key st

126、eps to design effective government co-investment programmes for startups are listed on table 2.3.Table 2.3.Steps to design effective government co-investment programmes for startups Establish clear Establish clear objectives and objectives and target sectorstarget sectors Define the programmes prima

127、ry objectives,such as promoting innovation,generating employment,or backing specific sectors such as green technology or health care.Select key sectors that not only align with national priorities but also promise notable economic impact,ensuring the programme aligns with broader economic policies a

128、nd initiatives for coherence and synergy.Create a Create a balanced cobalanced co-investment investment structurestructure Set the ratio for government-to-private sector investment,including a cap on government contribution to ensure a balanced risk-sharing mechanism.The structure should incentivize

129、 rather than deter private investments,avoiding market distortion and over-reliance on government funds.Develop criteria Develop criteria for startup for startup selectionselection Establish clear criteria that prioritize startups with significant growth potential and societal impact,and safeguard t

130、he process from political influence and bias.Ensure a fair and unbiased evaluation and selection process to maintain high standards of transparency and accountability.Enhance investor Enhance investor confidenceconfidence Demonstrate the governments commitment to reducing investment risks and elucid

131、ate how its involvement bolsters a startups credibility in the market.Engage with private investors to comprehend their needs and foster further investment and collaboration.Implement and Implement and monitor the monitor the programmeprogramme Initiate the programme with explicit guidelines and adm

132、inistrative frameworks,continuously assessing its impact on startup support and economic development.Incorporate robust monitoring and evaluation mechanisms to navigate challenges,adapting the programme based on feedback and evolving market conditions.Complement Complement private private investment

133、 investment effortsefforts Guarantee the programmes supplementary nature to private investments,steering clear of competing with private sector endeavours.Ensure the programme can adapt to changing market dynamics and emerging sectors to maintain relevance and effectiveness.Chapter 2.Support for the

134、 scaling up of startups 11 Box 2.3:Private sector support for Cambodian startups In Cambodia,initiatives and partnerships have been established to support and guide startups throughout their funding and development stages.As of 2019,Cambodia had approximately 20 private equity and venture capital fi

135、rms,including OOCTANE,Uberis Capital,Insitor,OBOR Capital,SEEVA Capital,500 Startups.Unlike some venture capital firms that concentrate on specific sectors,the majority in Cambodia assess technology startups for their investment readiness,regardless of their sector.Additionally,venture capital firms

136、 based outside Cambodia are also showing interest in investing in Cambodian startups.From 2015 to 2021,at least 25 technology startups in Cambodia received funding from international investors.Public disclosures show at least 14 investment deals in 2018 and at least 19 by 2021.By the end of 2021,dat

137、a on fundraising by startups from local and international venture capital,private equity and angel investors totalled more than USD 20 million.Large companies provide funding options for startups in Cambodia.For instance,Smart Axiata Digital Innovation Fund,a venture capital fund,was initiated by Sm

138、art Axiata,a leading telecom company in Cambodia.The fund focuses on early-stage technology startups.It offers financial investments,mentorship,business development support and networking opportunities through Smart Axiatas extensive partner network.SmallWorld,a Cambodian incubator,targets early-sta

139、ge startups.It provides comprehensive support,including mentorship,training and assistance in business planning,market research and networking.Participants in the incubation programme benefit from co-working spaces and funding opportunities.Several initiatives are connected at the global level.For i

140、nstance,Seedstars is a global organization that supports growth in emerging markets through technology and entrepreneurship.Seedstars Cambodia engages in entrepreneurship capacity-building,impact investment and community and events execution.The organization has launched programmes such as SmartScal

141、e,a startup acceleration programme in Phnom Penh,which includes dynamic workshops with local and international mentors,1:1 meetings with entrepreneurs and exclusive ecosystem dinners.It aims to help startups scale faster and reach their next investment milestone.Technovation Cambodia is dedicated to

142、 empowering young girls and women in technology and entrepreneurship.Through an annual competition,participants are mentored by industry professionals to develop mobile apps and entrepreneurial skills,fostering a new generation of female technology leaders and innovators.Sources:S.Ek and P.Vandenber

143、g,2002,Cambodias Ecosystem for Technology Startups.Manila:Asian Development Bank.Available at www.adb.org/sites/default/files/publication/804931/cambodia-ecosystem-technology-startups.pdf.See 2.4.Government co-investment programmes:Thailand In Thailand,initiatives by the Digital Economy Promotion Ag

144、ency(DEPA)include joint venture investments with digital startups,a notable shift from conventional grants to more sustainable investment models.The DEPA Digital Startup Fund offers support to pre-seed and seed-level startups.Startups can receive up to THB 1 million(USD 28,000),with THB 300,000(USD

145、8,400)as a pure grant and the remaining THB 700,000(USD 19,600)as a convertible grant.The convertible grant can be repaid as a soft loan with a low-interest rate or converted into equity based on a pre-agreed valuation.For startups nearing the series A funding stage or requiring bridge financing,DEP

146、A extends up to THB 5 million(USD 140,000).This support targets startups with proven product-market fit,assisting them in overcoming the challenge Chapter 2.Support for the scaling up of startups 12 of securing series A funding through flexible repayment options,including low-interest loans or equit

147、y conversions.The National Innovation Agency(NIA)has launched the Corporate Co-funding initiative for startups raising between USD 1 million and USD 10 million,co-investing up to THB 10 million(USD 281,700)per project.This support does not involve equity stakes but requires repayment when startups p

148、rofit or achieve the next funding round,within a maximum of five years.The initiative includes collaboration with the Thai Venture Capital Association and international partners,responding to growing interest in South-East Asian markets.NIA has also provided a market expansion mechanism,designed to

149、facilitate the testing and commercialization of innovations across both private and public sectors.Under this mechanism,NIA will finance 100 per cent of the project value for state agency projects and up to 50 per cent for private sector projects,with funding capped at THB 2 million(USD 56,000)per p

150、roject per year.The Technology and Innovation-Based Enterprise Development(TED)Fund focuses on technology and innovation entrepreneurship.The TED Fund provides support,including financial assistance,knowledge sharing and networking incubation.In recent years,its focus has shifted more towards startu

151、ps.In collaboration with venture capitalists,the TED Fund matching project offers matching funds to selected startups.For instance,the plan in 2024 is to support 20 startups,with each potentially accessing up to THB 20 million(USD 560,000)in funding from venture capitalists,while the TED Fund would

152、contribute a maximum of THB 5 million(USD 140,000)per startup.Sources:See www.depa.or.th/storage/app/media/file/depa-Digital-Startup-Fun-Fact-Sheet-March2020%20V2.pdf;https:/ 2.5.Government co-investment programmes:United Kingdom The Future Fund in the United Kingdom was a pivotal initiative tailore

153、d specifically to bolster startups during the challenging economic times brought about by the coronavirus disease(COVID-19)pandemic.It was part of a larger GBP 1.25 billion(USD 1.58 billion)support package,with a keen focus on early-stage,high-growth businesses,particularly those heavily invested in

154、 R&D.The scheme offered convertible loans between GBP 125,000(USD 158,280)and GBP 5 million(USD 6.33 million),which were designed to be converted into equity during future significant financial events such as a funding round,sale,or initial public offering.This approach was aimed at providing vital

155、support to startups,helping them navigate through cash flow pressures and continue their growth trajectory.The Future Fund eligibility criteria ensured the selected startups were well-established yet still in need of support.They were required to be based in the United Kingdom,have previously raised

156、 at least GBP 250,000(USD 316,500)in equity investment from third-party investors in the past five years and match the Governments loan with private investor funding.This structure was designed to encourage private investment,making it an attractive proposition for both startups and investors.The us

157、e of the funds was restricted to working capital purposes,ensuring that the resources were directed towards sustaining and growing the business operations of these startups.The Future Fund was complemented by an additional GBP 750 million(USD 950 million)of targeted R&D support for SMEs through Inno

158、vate UK.This comprehensive support package,including both the Future Fund and the additional R&D funding,reflected the commitment of the Government to sustaining the innovation and growth of startups during the pandemic.Sources:See www.british-business-bank.co.uk/ourpartners/coronavirus-business-int

159、erruption-loan-schemes/future-fund/;and https:/som.yale.edu/blog/governments-support-businesses-through-equity-investments.Chapter 2.Support for the scaling up of startups 13 2.1.2.c.Public-private partnerships for investment funds Governments may support startups by collaborating with private secto

160、r organizations to create investment funds for series A and B funding rounds.Examples include dVenture programme in Thailand(box 2.6)and the Startup Korea Fund(box 2.7).These partnerships synergize governmental financial support with private sector capital and expertise,offering a lifeline to startu

161、ps at critical growth phases.The collaboration ensures startups not only gain financial backing but also benefit from the strategic guidance and industry connections of private sector partners.This dual support system is invaluable for startups navigating the complexities of scaling operations and m

162、arket entry.The involvement of Governments in these partnerships reduces investment risks for the private sector,acting as an endorsement of the startups potential and aligning investments with national innovation and economic development priorities.Moreover,intermediaries such as startup associatio

163、ns,federations of industries and chambers of commerce play crucial roles.They act as connectors between the Government,the private sector and startups,aiding in identifying promising startups for investment.These organizations contribute their expertise in vetting and due diligence,ensuring investme

164、nts are made in startups with high growth potential.They also provide mentorship and advisory services to startups,helping them to refine their business strategies and operations.Furthermore,intermediaries facilitate networking,creating valuable connections with industry players,potential customers

165、and additional investors.Lastly,they play an advocacy role,representing the startup ecosystems needs to policymakers,thereby fostering a more supportive environment for startups.Incorporating these intermediaries enhances the effectiveness of public-private partnership investment initiatives.When cr

166、afting policies to foster public-private partnerships in investment funds,policymakers may consider the factors listed below.Objective Objective alignment alignment and and sector fsector focus:ocus:Clearly define fund objectives to ensure alignment with broader economic,innovation and sectoral prio

167、rities,emphasizing strategic areas for national development.Risk Risk managementmanagement:Develop risk mitigation strategies to make these partnerships appealing to private investors,potentially including guarantee schemes or shared risk models.Regulatory and Regulatory and incentive frameworksince

168、ntive frameworks:Craft a regulatory environment that encourages private sector engagement,featuring tax benefits,streamlined startup procedures and clear legal frameworks for public-private collaboration.Startup Startup selectionselection:Institute transparent,stringent selection processes to ensure

169、 investments target startups with substantial growth prospects and sound business models.Intermediary Intermediary rolesroles:Clarify the involvement of intermediary organizations in the vetting process and in facilitating connections,leveraging their expertise for the initiatives success.CapacityCa

170、pacity-building building and and knowledge knowledge exchangeexchange:Promote initiatives for skill development and information sharing between public and private entities to enhance stakeholder capabilities in managing and participating in these funds.Performance Performance monitoringmonitoring:Im

171、plement comprehensive monitoring and evaluation frameworks to assess the funds impact,adjusting strategies as necessary to enhance effectiveness.Sustainability and Sustainability and future planningfuture planning:Ensure the partnerships design is sustainable,with a long-term perspective,including C

172、hapter 2.Support for the scaling up of startups 14 planning for the governments eventual exit to allow for greater private sector leadership.Transparency and Transparency and accountabilityaccountability:Maintain openness and accountability in fund operations,with clear reporting on fund utilization

173、,decisions and outcomes.Stakeholder Stakeholder engagementengagement:Actively involve all relevant parties,including startups,investors and industry experts,in dialogue and feedback,employing effective communication to manage expectations and highlight the initiatives benefits.Box 2.6.Public-private

174、 partnerships for investment funds:Thailand As part of its strategy to strengthen the startup ecosystem in Thailand,the Digital Economy Promotion Agency(DEPA)launched the dVenture programme to boost the growth of digital startups by connecting them with venture investors.The dVenture programme works

175、 with four primary investors:InnoSpace(Thailand),Intouch,Krungsri Finnovate and Disrupt Technology Venture.These investors are not just financial contributors;they also provide smart money,which includes essential resources such as networks,knowledge and experience,along with assistance in securing

176、follow-on investments.The investments in startups made by these venture capitalists are matched with funds from the DEPA Digital Startup Fund.This effectively doubles the investment received by startups,leveraging private investment with public funds,and it also facilitates access to a broad network

177、 of digital startups both within Thailand and internationally.Startups under this programme are prioritized for government procurement and receive tax and non-tax benefits.They are also supported in expanding their reach to both domestic and foreign markets and in selling their products and services

178、 to entrepreneurs,SMEs,local shops and communities.The collaborative approach between DEPA,venture capitalists and startups aims to create a robust ecosystem that can nurture startups at different stages of growth,helping them to achieve international standards and expand their market reach.Source:S

179、ee 2.7.Public-private partnerships for investment funds:Republic of Korea The Government of the Republic of Korea is set to establish the Startup Korea Fund,a collaborative project with private investors,valued at KRW 1 trillion(USD 746 million).Starting 2024 and continuing until 2027,the Government

180、 plans to allocate KRW 500 billion(USD 373 million)to the fund.The other half of the fund will be sourced from investments by major corporations,financial institutions and venture capital firms.This fund is designed to aid startups,particularly those eyeing international markets,including ventures e

181、stablished by foreign entrepreneurs in the country.The Startup Korea Fund has three main investment areas:Super Gap,Secondary and K-Global.Approximately KRW 400 billion(USD 298 million)will be dedicated to backing startups in promising sectors(bio-health,future mobility,eco-friendly energy,robotics,

182、cybersecurity and networking,system semiconductors,big data and artificial intelligence),showcasing a focus on cutting-edge and high-growth industries.Source:See 2.Support for the scaling up of startups 15 2.1.2.d.Regulatory support and sandboxes Stringent regulatory requirements can pose significan

183、t obstacles to the expansion and growth of startups.To address this challenge,Governments can take proactive steps to streamline and simplify the regulatory landscape,thereby easing the legal and compliance burdens faced by startups.This process could involve the revision and relaxation of existing

184、regulations that may be overly complex or burdensome.An important aspect of this simplification could be the establishment of regulatory sandboxes.These sandboxes are controlled environments within which startups can test innovative financial products or services without being immediately subject to

185、 all the usual regulatory requirements.This approach allows startups to experiment and innovate while still ensuring consumer protection and maintaining the integrity of the financial system.Regulatory sandboxes can be particularly beneficial for startups working with new technologies or business mo

186、dels,where existing regulations may not be directly applicable or may be unduly restrictive.2 By creating a more accommodating regulatory environment through such measures,Governments can significantly lower the barriers to entry for startups,enabling them to focus more on innovation and less on bur

187、eaucratic navigation.This can lead to quicker times to market,increased investment attraction due to reduced legal risks and,overall,a more vibrant and dynamic startup ecosystem.Such initiatives not only support the startups but also contribute to broader economic growth by fostering innovation and

188、2 Hilary J.Allen,2019,“Regulatory sandboxes”.George Washington Law Review,vol.87,No.3,p.579.technological advancement.Regulatory sandboxes are often adopted in the financial sector,as in the Lao Peoples Democratic Republic and Thailand(box 2.8)and in the United Kingdom(box 2.9).Policymakers aiming t

189、o implement regulatory sandboxes may wish to consider the following recommendations.Tailoring to Tailoring to local needs local needs and and building building regulatory expertiseregulatory expertise:Design sandboxes to reflect the specific economic,technological and regulatory contexts of the regi

190、on,encouraging innovations that tackle local challenges.This involves enhancing the capacity of regulatory bodies,particularly in developing countries,to manage these sandboxes efficiently,ensuring they have the necessary expertise to oversee innovative financial products and services,including trai

191、ning in new technologies and innovative business models.Objective Objective definitiondefinition,infrastructureinfrastructure and and consumer protectionconsumer protection:Clearly articulate the sandboxs goals,including the types of innovations it will support,and ensure the provision of essential

192、infrastructure and professional services to support startups.Concurrently,uphold stringent consumer protection measures to mitigate risks associated with new financial offerings,maintaining a balance between innovation facilitation and safeguarding public interest ensuring that the sandbox does not

193、become a means for companies to circumvent important regulations.Stakeholder Stakeholder engagement engagement and and international international collaborationcollaboration:Foster collaboration with a wide range of stakeholders,including industry experts,incumbent firms and startups,to refine sandb

194、ox policies and ensure they Chapter 2.Support for the scaling up of startups 16 address practical business needs.Additionally,engage with international organizations and other countries to share best practices and potentially secure support to enhance sandbox effectiveness.Address regulatory issues

195、that may emerge as startups expand internationally,striving for policy harmonization and international cooperation to facilitate seamless cross-border operations.Adaptability,Adaptability,risk managementrisk management and and transparencytransparency:Maintain the flexibility to update sandbox regul

196、ations in response to emerging technologies and business insights,incorporating comprehensive risk management strategies to address potential systemic impacts.Ensure transparency in sandbox operations and outcomes to build public trust,clearly communicating the objectives,activities of participating

197、 startups and the results of sandbox trials.Box 2.8.Regulatory sandbox:Lao Peoples Democratic Republic and Thailand In the Lao Peoples Democratic Republic,the collaboration between Prudential Life Assurance(Lao)Company Limited and the Department of State-Owned Enterprise Reform and Insurance(DSRI),M

198、inistry of Finance,through a regulatory sandbox,aims to innovate in the life insurance sector by testing new financial products and ideas in a controlled environment.This initiative not only focuses on building awareness and financial literacy among the Lao population but also on adapting global tre

199、nds to the local insurance market.In Thailand,regulatory sandboxes have been pivotal in fostering innovation,particularly in the fintech sector.The Bank of Thailand launched its regulatory sandbox in early 2017 to support startups and advance technological development in financial services.This sand

200、box environment offers a period of 612 months to test innovative products and services.Enterprises with successful ventures emerging from the sandbox can apply for formal operating licenses.The sandbox is not limited to startups;it also plays a crucial role in examining technologies that could have

201、widespread applications in conventional banking,such as biometric systems for electronic know your customer(KYC)procedures.The Bank of Thailand has spearheaded a specific regulatory sandbox project to assess a unified KYC and identity verification utility.This utility capitalizes on the National Dig

202、ital Identity Platform,which is overseen by the National Digital Identity Company Limited.The initiative involves a collaboration with 69 entities,encompassing Thai commercial banks,specialized financial institutions,securities companies,fund management firms,life and casualty insurance companies,el

203、ectronic payment services,the Stock Exchange of Thailand and Thailand Post Company.This project allows six commercial banks to register new customers for savings accounts using facial recognition and existing identity verification data,ensuring compliance with international standards on anti-money l

204、aundering and counter-terrorism financing.Sources:See www.prudential.la/corp/prudential-la/en/newsroom/prudential-laos-signs-mou-with-ministry-of-finance-on-regulatory-sandbox-to-build-life-insurance-awareness-in-lao-pdr/;Giovanni Puglisi,2019,Across ASEAN,regulatory sandboxes are managing risk in f

205、intech innovation.KrAsia,13 June.Available at https:/kr- 2.Support for the scaling up of startups 17 Box 2.9.Regulatory sandbox:United Kingdom The Financial Conduct Authority of the United Kingdom launched its regulatory sandbox in 2016 as part of Project Innovate,offering a controlled environment f

206、or firms to test innovative financial products and services,explore market attractiveness,develop consumer protection safeguards and potentially reduce time to market.Initially,under a cohort-based approach,applications were accepted during specific periods.However,in August 2021,the sandbox began t

207、o accept applications at any time,enabling firms to apply when it was most suitable for their development.Participants in the sandbox have access to a range of tools and regulatory expertise,including a tailored authorization process for new firms,informal guidance on regulatory implications and the

208、 possibility of receiving waivers or no enforcement action letters for certain rules.These provisions help businesses to navigate the regulatory landscape more effectively,especially for early-stage startups lacking the resources for full regulatory compliance.Additionally,the Financial Conduct Auth

209、ority provides individual guidance to firms on how existing rules apply to the products and services they are testing,and overly burdensome rules can be modified for the purpose of the test.The sandbox has been influential beyond the United Kingdom,inspiring similar initiatives in approximately 60 j

210、urisdictions worldwide across a range of regulated industries,including artificial intelligence and health care.Sources:Functional Conduct Authority,2022,Regulatory Sandbox.Available at www.fca.org.uk/firms/innovation/regulatory-sandbox;Financial Conduct Authority,2016,Financial Conduct Authoritys r

211、egulatory sandbox opens to applications.Available at www.fca.org.uk/news/press-releases/financial-conduct-authority%E2%80%99s-regulatory-sandbox-opens-applications;Pymnts,2022,Inside the UKs Regulatory Sandbox:How It Fosters FinTech Innovation,Drives Multisector Growth.20 July.Available at to region

212、al and global markets Although there is a rise in startup creation in CLTV,the challenge lies in effectively scaling these ventures.Early-stage startups face a significant gap in investment,with a notable scarcity of funds for unproven ideas.This difficulty is compounded by other factors in the regi

213、on,including underwhelming economic performance in recent years and limited opportunities to access global markets.For startups that have grown domestically but face hurdles in international markets,government support can be crucial.Agencies can assist these startups in regional and global expansion

214、 by organizing trade missions,offering diplomatic support and facilitating access to international networks.This support is particularly valuable for startups aiming for series B funding,where demonstrating potential for international growth can attract larger investments.Government-backed initiativ

215、es can provide startups with the necessary exposure,contacts and knowledge to navigate different market conditions,regulatory environments and cultural nuances,ultimately helping them to successfully scale globally.The assistance might manifest as targeted collaboration between public and private se

216、ctors,as seen in Thailand(box 2.10),or through direct support programmes like those implemented in the Republic of Korea(box 2.11).Alternatively,it can be effective to foster a community dedicated to empowering startups for global expansion,as demonstrated by the Thailand Innovation Club.Chapter 2.S

217、upport for the scaling up of startups 18 Box 2.10.Access to regional and global markets:Thailand The collaboration between the Digital Economy Promotion Agency(DEPA),Krungsri(Bank of Ayudhya)and Mitsubishi UFJ Financial Group exemplifies strategic partnership to boost the global expansion of Thai st

218、artups and attract foreign startups to Thailand.Key initiatives include promoting Thai startups globally,facilitating their presence in international exhibitions and conducting business matching and seminars.In 20212022,the partnership targeted investments in the agri-tech,ed-tech and fintech sector

219、s,identifying 26 promising digital startups.The effort aims to foster innovation and collaboration within the Association of Southeast Asian Nations(ASEAN)and Japan,thereby broadening the investment pool.Furthermore,this partnership supports Japanese startups to gain a foothold in Thailand,creating

220、mutual benefits for both nations startup ecosystems.Complementing internationalization efforts,the National Innovation Agency launched the Global Startup Hub initiative to position Thailand as a key entry point into Asian markets for global startups,focusing on strategic locations,such as Bangkok,Ch

221、iang Mai and the Eastern Economic Corridor.Sources:See 2.11.Access to regional and global markets:Republic of Korea and Singapore In the Republic of Korea,the Comprehensive Startup Korea Plan aims to establish the country as a global startup hub,targeting the creation of“unicorns”with valuations mor

222、e than USD 1 billion by 2027.Key objectives include nurturing five world-leading unicorns,elevating the startup ecosystem in Seoul to seventh globally,increasing venture investment to KRW 14.2 trillion(USD 10.6 billion)and boosting the share of technology startups among all local startups to 40 per

223、cent.Initiatives include setting up global startup centres,in partnership with major corporations,to provide tailored international market entry strategies,and launching the“Startup Korea Fund”with a projected KRW 2 trillion(USD 1.51 billion)by 2027 to aid the global expansion of technology startups

224、.The plan also emphasizes private sector-led venture investment and regulatory enhancements for corporate investments in startups.To foster foreign entrepreneurship,the Government is making changes to visa requirements for specialized personnel and introducing startup visas.The“K-tech college”progra

225、mme is being developed to connect international students with software education provided by domestic companies.Additionally,“Space-K”in Seoul is being established to allow global youth to freely communicate and exchange ideas.The Government of Singapore has been proactive in supporting the internat

226、ional expansion of startups.The iPACT programme offers funding for startups to position themselves as solution suppliers to larger corporates and gain market access.The market access incubation programme and market readiness assistance provide funding for early or growth-stage startups for overseas

227、expansion.Singapore has also adjusted its policies to provide a conducive regulatory environment for fintech innovations,including the implementation of regulatory sandboxes to test innovative solutions within controlled boundaries.Sources:Dae-Jung Park,2023,Korean Government Unveils Ambitious Initi

228、atives to Foster Global Startups and Unicorns by 2027.KoreaTechDesk.Available at Moore,2023,Korea plans USD 1.5 billion fund to support deep tech startups.Global Corporate Venturing.Available at https:/ and www.enterprisesg.gov.sg/financial-support/market-readiness-assistance-grant.Chapter 2.Support

229、 for the scaling up of startups 19 2.1.2.f.Research and development grants Providing grants or other types of funding for R&D is a key means through which Governments can support startups.This assistance enables startups to enhance their products or services,making them more competitive and appealin

230、g to series B investors,who typically look for companies with proven products and potential for growth.Such financial support for R&D can be crucial in enabling startups to innovate,improve their offerings and demonstrate their potential to investors,thus facilitating their progression to more advan

231、ced stages of funding and development.Governments often provide financial grants that startups can use for R&D.These grants usually come with fewer strings attached than other forms of funding,such as equity investments.For example,the Small Business Innovation Research programme in the United State

232、s offers grants to early-stage founders to bring innovative technologies to market.This is especially useful for deep technology companies with significant R&D spends and long times to market.Offering matching grants is another effective approach to foster the growth of startups engaged in R&D activ

233、ities.This method effectively supports innovation by providing startups with crucial financial resources that match their own investments in R&D.These grants can significantly enhance the attractiveness of startups to series B investors,especially those interested in technology development.By levera

234、ging private investments,matching grants not only inject additional funding into startups but also signal the credibility of the startup to potential investors and the Governments confidence in its potential.This approach can be particularly impactful in advancing the technological innovations that

235、startups are working on.R&D grants are widely adopted by Governments,including in Thailand(box 2.12),as well as in Hong Kong,China,and Japan(box 2.13).Box 2.12.Research and development grants:Thailand The National Innovation Agency is dedicated to fostering innovation by providing substantial financ

236、ial support,primarily targeting startups,smart SMEs,social enterprises and medium to large companies.The Agency offers grants covering up to 75 per cent of a projects value.Matching grants are a significant part of the Agencys support,encouraging the growth of innovation-based businesses by requirin

237、g them to fund a portion of their projects,thus promoting sustainability.These grants cater to several stages of business and innovation development:1.The Mechanism for Funding Open Innovation Projects offers a matching grant covering up to 75 per cent of project value,capped at THB 1,500,000(USD 42

238、,000),for one year.It supports the development and commercialization of prototypes,focusing on real-world testing,industrial production and market distribution.2.The Regional Market Validate mechanism,with similar financial terms,targets entrepreneurs with commercially viable innovations aiming to e

239、nter new markets or customer groups.3.The Matching Interest for Working Capital mechanism improves liquidity for market-ready businesses,subsidizing interest and fees up to 75 per cent,with the same cap and duration.4.The Good InnovationNo Interest mechanism aids business expansion and commercializa

240、tion by covering 100 per cent of interest value,up to THB 5,000,000(USD 140,000),over three years.To be eligible for funding,applicants must be legal entities in Thailand,with Thai nationals holding over 51 per cent of shares.Projects must be unique,not supported by other agencies and free from bank

241、ruptcy or legal issues.Funding is provided as retrospective reimbursement,demanding a minimum 25 per cent in-cash contribution from recipients,encouraging innovation in both economic and social sectors.Source:See https:/www.nia.or.th/service/financial-support.Chapter 2.Support for the scaling up of

242、startups 20 Box 2.13.Research and development grants:Hong Kong,China,and Japan In Hong Kong,China,the Innovation and Technology Commission administers the Innovation and Technology Fund(ITF),offering matching grants to spur private R&D investment.The enterprise support scheme provides dollar-for-dol

243、lar matching up to HKD 10 million per project for 24 months.The R&D cash rebate scheme offers a 40 per cent rebate on company contributions to eligible projects,including those funded by ITF or conducted in partnership with designated local public research institutes.The technology voucher programme

244、 further supports technology adoption in local enterprises with a 3:1 matching scheme,capped at HKD 600,000.In Japan,the innovation strategy includes the Moonshot Research and Development programme by the Japan Science and Technology Agency,targeting high-impact R&D for future societal challenges.Th

245、e COI-NEXT initiative promotes industry-academia-government collaboration through back casting R&D for societal advancements aligned with the Sustainable Development Goals.It defines a desirable future and then works backwards to identify initiatives to reach that future.Further,the competitive fund

246、ing programme,Adaptable and Seamless Technology Transfer Programme through Target-Driven R&D(A-STEP),supports industry-academia collaboration for commercial applications from basic research outputs.The Newly Extended Technology Transfer Programme(NexTEP)aids in commercialization by supporting large-

247、scale practical development based on university research,aiming for sustainable business growth.Additional programmes include START,which supports R&D and commercialization for creating startups,and SUCCESS,which invests in startups translating R&D funded by the Japan Science and Technology Agency i

248、nto practical applications.Grants-in-Aid for Scientific Research(KAKENHI)supports all scientific research fields,and Japan-United States joint research collaboration focuses on smart and connected communities,emphasizing the long-term sustainability and scalability of solutions.Sources:See www.itf.g

249、ov.hk/en/funding-programmes/index.html;www.jst.go.jp/EN/programs/funding.html and www.jst.go.jp/start/en/.2.1.2.g.Intellectual property protection The protection of intellectual property(IP)is essential for technological startups that often possess cutting-edge,proprietary knowledge.This protection

250、is not only crucial for safeguarding their innovations but also enhances their value,particularly in critical stages such as series A and B funding rounds.Governments recognize the importance of IP protection as a strategic business tool for enhancing the industrial competitiveness of startups.Conse

251、quently,policies and schemes have been developed to support startups in navigating the complex landscape of IP rights and patent registration,as shown in the case of revamping the legal framework in Viet Nam(box 2.14)and the all-encompassing approach in India(box 2.15).Box 2.14.Intellectual property

252、 protection and patents:Viet Nam The Government of Viet Nam is demonstrating a strong commitment to nurturing startups,including policy support that aims to enhance intellectual property(IP)rights.This support is multifaceted,including a crucial step to revamp the legal framework in line with the Ag

253、reement on Trade-Related Aspects of Intellectual Property Rights.Recognizing the significance of IP protection,Viet Nam is not only implementing these revised provisions but also actively promoting awareness about their importance for startups.Chapter 2.Support for the scaling up of startups 21 To c

254、reate a thriving environment for startup development,the Government has implemented comprehensive support strategies,including assistance for application procedures,technology transfer,utilization of technical facilities and participation in incubation programmes.Additionally,startups receive intens

255、ive training in product development,expert consulting in IP and guidance in adhering to standards,technical regulations and quality protocols.A landmark Initiative in this endeavour is Project 844 launched by the Government in 2016 as a direct intervention to cultivate a favourable ecosystem for inn

256、ovative startups in Viet Nam.It focuses on enhancing the legal system to better support innovative entrepreneurship,and it has established a national portal known as“Start-Innovation”.Moreover,the Government extends its support to the commercialization of scientific research and technological advanc

257、ements,emphasizing the exploitation and development of IP.This is complemented by investment support and interest compensation provided through credit institutions.Startups also benefit from broader support measures typical for SMEs,including access to credit,credit guarantee funds,tax and accountin

258、g services,legal advice,technology support and human resource development.Sources:VietnamNet Global,2022,Vietnam to use institutional leverage to boost innovative startup.25 January.Available at https:/vietnamnet.vn/en/vietnam-to-use-institutional-leverage-to-boost-innovative-startup-811391.html;Mar

259、k Barnes,2023,8 Regulations and Policies Supporting Startups in Vietnam.Vietnam Briefing,13 February.Available at www.vietnam- 2.15.Intellectual property protection and patents:India In India,the Startup India Campaign and the Scheme for Facilitating Startups Intellectual Property Protection(SIPP),l

260、aunched by the Department for Promotion of Industry and Internal Trade(DPIIT),aim to boost awareness and usage of IP protection among startups.These programmes provide significant benefits,such as access to premier IP services,support for an innovative culture and financial support for IP registrati

261、on.The 2016 Startup Action Plan includes a pillar on“Simplification and Handholding”,which includes legal support and faster,more affordable patent examinations.DPIIT introduced SIPP to reduce the financial burden of IP filing and streamline the registration process with help from a group of facilit

262、ators accredited by the Controller General of Patents,Designs and Trademarks.Since 2016,SIPP has expanded.In 2019 support was extended all Indian innovators associated with the World Intellectual Property Organization(WIPO)Technology and Innovation Support Center(TISC)programme.TISCs are crucial for

263、 IP creation,protection and management.In 2022,the scope of SIPP was broadened to cover not only startups but also individual innovators,creators and educational institutions,and its duration was extended to 2026.The aim is to enhance the global innovation footprint in India,particularly for interna

264、tional patent applications through WIPO.Eligible participants include DPIIT-recognized startups and those associated with TISCs,benefiting from a range of pro bono services from a diverse group of facilitators,including patent and trademark agents,legal advocates,government entities and TISCs.While

265、the Government covers facilitator fees,applicants bear certain statutory and international filing costs,reinforcing its commitment to strengthening the IP protection framework and international innovation reputation.Source:Kritika Narula and Ragini Kumar,2023,Safeguarding Innovation:Governments Focu

266、s on Startups Intellectual Property Protection.Invest India,25 May.Available at www.investindia.gov.in/team-india-blogs/safeguarding-innovation-governments-focus-startups-intellectual-property.Chapter 2.Support for the scaling up of startups 22 2.1.2.h.Entrepreneurial education and training Startups

267、 with innovative ideas often face challenges in progressing beyond their initial stages due to a lack of essential business knowledge and skills.To address this,government investment in programmes specifically for entrepreneurs is crucial.These programmes could focus on preparing startups for series

268、 A and B funding rounds,which are critical for securing significant investments needed for scaling up operations.Entrepreneurs can benefit from learning how to identify and approach potential investors,effectively communicate their value proposition and understand the dynamics of the investment land

269、scape.Training in crafting persuasive pitch decks is also vital,as these are key tools in showcasing their business idea,market potential and competitive edge to investors.Additionally,entrepreneurs must be equipped with negotiation skills so they can secure favourable terms in investment deals.Ment

270、orship from experienced industry professionals and networking opportunities play a significant role,offering real-world insights and connections.By providing such targeted support,the Government can help startups to transition from innovative concepts to sustainable businesses,fostering a thriving,i

271、nnovative economic environment.One notable CLTV example of such targeted support for startups is Khmer Enterprise of Cambodia(box 2.16).Box 2.16.Entrepreneurial education and training:Cambodia In mid-2019,the Ministry of Economy and Finance,Cambodia,established the Entrepreneurship Development Fund(

272、EDF),a public trust fund to bolster SMEs,startups and entities that nurture the entrepreneurial ecosystem.The goal was to stimulate entrepreneurship,innovation and enterprise growth by facilitating training and mentorship for startup founders,supporting R&D activities and creating an environment con

273、ducive to innovation and risk-taking.To effectively implement its policy goals,EDF formed Khmer Enterprise,an independent administrative entity,to manage four key programmes:capacity-building for startups and SMEs through training;networking to connect with mentors and investors;fostering an entrepr

274、eneurial culture of innovation;and providing financial support via matching grants and co-investments.Notably,Khmer Enterprise has allocated approximately USD 400,000 to 27 businesses and launched the“Angkor 50”programme with partners,including the investment firm,500 Startups,and Stanford Universit

275、y,to support local technology entrepreneurs in scaling up their operations.Khmer Enterprise was recently transitioned to the Ministry of Industry,Science,Technology and Innovation,and it continues to support startups and SMEs,offering grants between USD 5,000 and USD 20,000 to mitigate the impacts o

276、f the coronavirus disease(COVID-19).The Khmer Enterprise Assistance Package,which has run five rounds and awarded USD 815,000 to 90 grantees,is a key part of these efforts.Additionally,the accelerator programmes of the Techo Startup Center provide resources,training and networking opportunities,part

277、icularly in digital sectors.Sources:Thai Sothea,2023,Twenty-seven Startups and SMEs Receive$5,000 to$20,000 Grants.Kiripost,23 June.Available at https:/ Bank,2022,SME Bank and Khmer Enterprise Signed Memorandum of Understanding to Cooperatively Promote and Develop SMEs in Cambodia(21 December);See h

278、ttps:/techostartup.center/.Chapter 2.Support for the scaling up of startups 23 2.1.2.i.Innovation hubs Innovation hubs,also known as incubators and accelerators,are dynamic environments designed to support startups and entrepreneurial ventures.These hubs provide essential infrastructure and workspac

279、e,equipped with office amenities,such as high-speed Internet access and meeting rooms.Another key component is the access they provide to experienced mentors and industry professionals,offering startups invaluable guidance and advice.Additionally,these spaces facilitate networking opportunities,conn

280、ecting entrepreneurs with potential investors,industry experts and peers.Innovation hubs also play a crucial role in providing educational resources and support services necessary for the holistic development of startups.They often organize workshops,seminars and training sessions on business-relate

281、d topics,including marketing,finance,legal issues and technology trends.They offer support services,such as administrative assistance,legal and accounting help and IP guidance.For startups,innovation hubs foster support and a community that are instrumental in navigating the challenges of the busine

282、ss world and in achieving sustainable growth and success.Governments can create and support innovation hubs by establishing supportive policy frameworks and regulations that simplify business registration processes,offer tax incentives and the protection of IP rights.Financial support is crucial,and

283、 Governments can provide this through direct funding to innovation hubs,grants and subsidies to startups,tax breaks and government-backed venture capital funds.Such financial incentives are key to attracting private investments to these hubs.Innovation labs typically focus on R&D,technological advan

284、cements and fostering innovation in specific fields.They provide resources and equipment for experimentation and development of new technologies.In contrast,innovation hubs generally encompass a broader scope,including not only technological innovation but also entrepreneurial support,networking and

285、 business development services.Hubs are more focused on creating an ecosystem for startups and entrepreneurs,providing them with resources,mentorship and networking opportunities to grow their businesses.In Viet Nam,the emphasis of Viettel facilities is on technological development and digital trans

286、formation(box 2.17),aligning more with the concept of innovation labs.Other innovation hubs incorporate a broader framework of an innovation district and urban development,as in the case of True Digital Park in Thailand(box 2.18).Box 2.17.Innovation labs:Viet Nam The Viettel Military Industry and Te

287、lecoms Group has established two innovation labs,located in Hanoi and Ho Chi Minh City,Viet Nam.These labs are equipped with advanced Industry 4.0 technologies,highlighting Viettels commitment to nurturing new technology and fostering community connectivity.The labs are designed to accelerate the di

288、gital transformation in Viet Nam and serve as a collaborative space for information technology communities both domestically and internationally.Viettel provides free access to these facilities for information technology firms,scientists and students who have promising solutions.Chapter 2.Support fo

289、r the scaling up of startups 24 These innovation labs are notable for their cutting-edge technology,including 5G,Internet of things,cloud,big data and artificial intelligence equipment.They feature modern network infrastructure,such as super-high-speed and super-low latency 5G connectivity,narrowban

290、d Internet of things and LTE-M connectivity for devices and technologies from leading companies,such as Qualcomm,Ericsson and Intel.Recognized by the Global System for Mobile Communications Association,the Viettel Innovation Labs meet the highest international standards,offering connectivity infrast

291、ructure,development kit sets and an app development environment with servers and platforms.Source:Viet Nam News,2021,Viettel operates two innovation labs.Available at https:/vietnamnews.vn/economy/1018416/viettel-operates-two-innovation-labs.html.Box 2.18.Innovation hubs:Thailand True Digital Park i

292、n the Bangkok CyberTech District exemplifies the integration of innovation hubs within an innovation district,combined with a lifestyle-focused real estate development.This large-scale project aims to integrate technological and creative spaces into urban real estate developments,catering to both th

293、e professional needs of startups and the personal lives of urban dwellers.Covering over 230,000 square meters,it is one of the largest technology and startup hubs in South-East Asia.Its proximity to a rail transit station enhances its accessibility.The project is divided into two main areas:True Dig

294、ital Park East,opened in 2019,and True Digital Park West,introduced in 2022.True Digital Park serves as a hub where startups,entrepreneurs,technology companies,investors,accelerators,incubators,academies and government agencies converge.The complex integrates elements necessary for a thriving innova

295、tion district.It includes coworking spaces,technology labs and event venues,alongside residential and commercial areas.Green spaces and leisure facilities,such as a running track and shops,are also incorporated,supporting the work-live-play concept.This model is reflective of a global trend where ci

296、ties are transforming urban areas into dedicated zones for technological and creative industries,aiming to stimulate economic growth and innovation.Source:See procurement policies for startup growth This section explores how procurement policies can support startup growth,specifically how procuremen

297、t policies could enable startup to vie for government contracts,offering them a foundational market for their products or services.Such opportunities are crucial for startups,as they not only provide a platform to showcase their offerings but also help in building a credible track record.This is als

298、o beneficial when attracting Series A and B investors,as a proven history of government contract achievements can significantly enhance a startups appeal and investment potential.By participating in government procurement processes,startups gain valuable experience and exposure.Chapter 2.Support for

299、 the scaling up of startups 25 2.2.1.Key considerations when designing public procurement policies for startup growth Policymakers must consider a range of factors related to procurement policies in the context of startups(table 2.4).Table 2.4.Key considerations for public procurement policies targe

300、ting startup growth Impact of Impact of procurement procurement policies policies and and regulationsregulations The growth and success of startups and SMEs,especially in developing countries,are significantly influenced by procurement policies and regulations.The complexity of procurement processes

301、 poses challenges for small businesses due to limited resources and capabilities,with extensive paperwork,necessary certifications and compliance checks acting as major barriers.Terms of Terms of referencereference and and market entrymarket entry Often,the terms of reference formulated by governmen

302、t officials favour companies with prior experience,limiting opportunities for new entrants.In countries such as Thailand,anti-corruption laws requiring a minimum number of bidders for specific projects can be challenging for startups with fewer competitors.Policies ensuring a certain portion of proc

303、urement from smaller businesses can help level the playing field.Cash Cash flow flow challengeschallenges For startups and SMEs,cash flow is a critical issue.Policies ensuring timely payment for products or services are crucial for their survival and growth.In Thailand,bidding for government project

304、s often requires a deposit,which can tie up finances and adversely affect the financial health of startups.Innovation and Innovation and procurementprocurement Startups,typically at the forefront of innovation,can benefit from procurement policies that prioritize innovation.This benefits not only th

305、e startups but also the organizations procuring their services.Prioritizing local startups and SMEs in procurement policies can stimulate local economies,leading to job creation and community development.Scaling and Scaling and networking networking through through procurementprocurement Successfull

306、y handling procurement processes and fulfilling substantial contracts can assist startups and SMEs in scaling their operations and offer networking opportunities with larger companies and government bodies,potentially leading to long-term partnerships and collaborations.RiskRisk-sharing sharing in i

307、n procurement procurement policiespolicies Procurement policies that share risks between the procuring entity and the supplier are beneficial for startups,which typically lack the financial reserves to handle high-risk contracts.In summary,thoughtfully designed procurement policies can significantly

308、 drive the growth of startups and SMEs,while overly complex regulations can limit their potential.Balancing transparency and accountability in procurement with the needs of smaller businesses is key to supporting their growth and success.Chapter 2.Support for the scaling up of startups 26 2.2.2.Desi

309、gning public procurement policies to support startups Governments can modify procurement policies to bolster the growth of startups in a variety of ways.This section outlines a range of policy instruments designed to support startups.2.2.2.a.Simplified procurement processes Simplifying the procureme

310、nt process means making it easier for startups and SMEs to participate in government tenders.This can be achieved by launching online procurement portals that provide easy access to information,streamlined bidding processes with fewer bureaucratic hurdles and reduced administrative requirements.One

311、example is the TECHHUNT platform in Thailand(box 2.19).Simplified processes reduce the time and resources needed to bid for government contracts,making public procurement more accessible to smaller businesses.One approach to simplifying procurements processes is to establish technology buying framew

312、orks,which are structured agreements set up by government bodies or organizations to streamline the procurement of technology products and services.These frameworks pre-qualify suppliers and define the terms for procuring specific types of technology,thus simplifying the buying process for governmen

313、t agencies.These frameworks ensure suppliers meet certain standards,reducing the administrative burden on buyers and enabling quicker,more efficient procurement(box 2.20).In addition,splitting tenders into smaller components lowers the entry barriers,making it more feasible for startups to meet the

314、requirements and secure procurement contracts.Box 2.19.Simplified procurement processes:Thailand Effective since 6 September 2023,the Ministry of Finance has implemented regulations to promote government procurement from Thai digital entrepreneurs through the Thailand Digital Catalogue.This initiati

315、ve is geared towards enhancing the use of digital products and services,with the TECHHUNT platform(techhunt.depa.or.th)playing a pivotal role.As a centralized digital marketplace,TECHHUNT showcases digital offerings from Thai entrepreneurs,streamlining government procurement and public access to the

316、se innovations in line with the new regulations.The catalogue aims to address quality,pricing and risk concerns by including products that meet specific standards,such as ISO 229110 for digital service production,and have market validation.This initiative simplifies the procurement process by allowi

317、ng direct procurement without e-bidding if there is only one product,and a simplified selection process if there are multiple products,thus reducing bureaucratic hurdles and fostering innovation.Digital service providers must fulfil legal and operational requirements,such as being a legal entity in

318、Thailand and demonstrating involvement in digital product or service development.Required documentation includes shareholder details,value-added tax(VAT)registration and product quality certifications.Additionally,the TECHHUNT platform offers promotional incentives,such as tax benefits for businesse

319、s purchasing digital products from the catalogue,including a tax deduction of up to 200 per cent on software purchases.For example,a THB 100,000(USD 2,800)software investment can result in a THB Chapter 2.Support for the scaling up of startups 27 200,000(USD 5,600)corporate tax deduction,encouraging

320、 the adoption of digital technologies and supporting Thailands digital economy growth.These measures aim to increase transparency and quality in the digital market,facilitating easier government procurement and fostering digital sector development.Source:See 2.20.Simplified procurement processes:Uni

321、ted Kingdom Contracts Finder is an online portal provided by the Government of the United Kingdom that lists information about contracts and tenders.It is a key resource for businesses looking to find opportunities to work with the public sector.Pre-qualification questionnaires for contracts below a

322、 certain value were abolished to reduce the administrative burden on startups and SMEs.The abolition of pre-qualification questionnaires was aligned with the introduction of the European Single Procurement Document(ESPD),which provides a set of core exclusion and selection questions for potential su

323、ppliers.This self-declaration system is less cumbersome for suppliers,especially SMEs.The ESPD allows for a more efficient evaluation of suppliers qualifications without the need for excessive documentation at the initial stages of procurement.Sources:See www.gov.uk/find-tender;and https:/blog.tende

324、rsdirect.co.uk/2015/04/27/the-ban-on-pqqs-and-restrictions-for-use-of-supplier-questionnaires/.2.2.2.b.Market access and opportunity creation This approach involves creating dedicated opportunities for startups and SMEs in public procurement.It can include setting aside certain contracts exclusively

325、 for these businesses,providing preferential scoring for them in tender evaluations,or setting targets for their participation.These policies aim to level the playing field and ensure that smaller companies have a fair chance to compete against larger,more established firms.Examples include the proc

326、urement policy in Thailand that encourages government agencies to purchase from local suppliers(box 2.21)and cases that specifically target startups and SMEs in the Republic of Korea and the European Union(box 2.22).Box 2.21.Market access and opportunity creation:Thailand Thailand has implemented se

327、veral measures related to procurement policies to support SMEs.One measure is that government agencies are required to allocate at least 30 per cent of their budget for procurement from SMEs.This 2020 policy is designed to prioritize SMEs in government contracts,especially if their bids are within 1

328、0 per cent of the lowest bid.Additionally,these regulations encourage government agencies to purchase products from stores,cooperatives,or farmers institutions certified by the Ministry of Agriculture.Government projects must use a mandatory quota of domestically produced materials,such as 90 per ce

329、nt Thai steel for construction projects.If Thai contractors offer a bid price less than 3 per cent higher than that of a winning foreign bid,the government agency must consider selecting the Thai bid.Source:See 2.Support for the scaling up of startups 28 Box 2.22.Market access and opportunity creati

330、on:Republic of Korea and the European Union The Government of the Republic of Korea has set a regulation requiring at least 8 per cent of the total procurement budget to be spent on products or services from startups.This initiative is part of a KRW 27 trillion(USD 20 billion)public market exclusive

331、ly for startups.The Ministry of Startups and SMEs issued this decree to support the Startups and SMEs Promotion Law,aiming to provide startups with revenue,serve as a testing environment and aid their survival.The Government is also revising definitions and categories to better include different typ

332、es of startups in this initiative.The European Union Directive 2014/24/EU,established in February 2014,is a pivotal regulation that facilitates SME participation in public procurement.A key strategy within this directive is the division of larger contracts into smaller lots.This approach allows SMEs

333、,which may not have the capacity for larger projects,to bid for and manage portions of these projects.By breaking down contracts into smaller,more manageable segments,the directive makes it feasible for SMEs to participate in opportunities that would otherwise be inaccessible due to their size or resource limitations.Sources:See http:/data.europa.eu/eli/dir/2014/24/oj 2.2.2.c.Capacity-building and