Akito Tanaka shares his weekly reflections and recommendations Grab delivery riders parked in front of a noodle restaurant in Bangkok on May 13.
Akito Tanaka shares his weekly reflections and recommendations Grab delivery riders parked in front of a noodle restaurant in Bangkok on May 13. Grab is one of Southeast Asia's best known homegrown startups but its valuation has fallen in recent years. (Photo by Ken Kobayashi) Hello from Tokyo. As I've mentioned in previous editions of this newsletter, I covered some exciting startups as a Silicon Valley correspondent from 2006 to 2010, and I encountered young companies that would go on to become global tech giants. These included Tesla in its earliest days, when it could barely assemble a handful of electric vehicles in a garage, and Twitter, when it still had only a few dozen employees. In the years since, people across Asia have often asked me, "Why can't we replicate the Silicon Valley ecosystem here?" This week's ASEAN Money takes a closer look atthe challenges facing Southeast Asian startups. The region's startup scene was booming around 2021 (when I happened to be covering the tech industry from Singapore). As more of Southeast Asia's population got their hands on smartphones and superapps grew at breakneck speed, the region produced notable "unicorns," or startups valued at more than 100 billion, spawning the somewhat awkward term "hectocorn." The gap between Silicon Valley and Southeast Asia's startup ecosystems has widened considerably once again. So what really separates Silicon Valley from Asia and other startup hubs around the world? Asia has plenty of excellent educational institutions that -- like Stanford University and UC Berkeley in Silicon Valley -- attract talented young people with the potential to become entrepreneurs. The region has also produced startup success storiessuch as Grab, which built a business model that fended off Western smartphone app rivals. To me, the biggest difference between Silicon Valley and everywhere else is the size of the bet. Silicon Valley investors are constantly searching for technologies and businesses that can "change the world." They do so because they know backing a startup that can genuinely shape the modern world -- such as Tesla, which ignited the global EV trend and changed the landscape of the global auto industry -- can generate extraordinary returns. And as entrepreneurs pitch these investors again and again, they naturally learn to articulate bold and ambitious visions. "A big problem is a good problem" is a phrase you often hear in the Valley. If you are not tackling a big enough problem, raising money there is difficult. But I see no reason why world-changing startups cannot emerge from Asia. The region has young populations and fast-growing economies while also facing many of the world's most pressing social problems. Those challenges themselves represent opportunities for entrepreneurs. Silicon Valley venture capitalists are also increasingly looking for opportunities in Asia, withAndreessen Horowitz, for example, opening a new office in Tokyo. In the AI era, Asian tech companies have dramatically expanded their global presence, particularly in the semiconductor industry. China has also produceda growing number of AI companieswith global influence. Perhaps it is only a matter of time before a startup emerges from Asia that truly changes the world. 1. For decades, Hong Kong's private hospitals have purchased their medical devices and equipment from the catalogs of top American, European and Japanese companies like GE HealthCare, Siemens Healthineers, Philips and Olympus. ButChinese brands are increasingly challenging these established global names, extending the nation's push up the manufacturing value chain beyond sectors such as electric vehicles and robotics. 2. Japanese investors are gearing up asmajor U.S. stock exchanges plan to introduce 23-hour tradingfrom Dec. 6. Excitement is building among retail investors as this will allow them to trade AI-related stocks and other securities during the Japanese daytime. On the other hand, many institutional investors are taking a more cautious approach, assuming that liquidity in U.S. stocks will remain limited during daytime hours. 3. South Korea's government is planning a project worth more than $1 trillion to turn a small city in the deep southwest of the country intoa hub for semiconductor production. Our reporter visited the city of Gwangju to gauge the mood in the local business community and parse the prospects for official "mega projects" that also involve chipmakers Samsung Electronics and SK Hynix. Sign up for the weeklyEditor-in-chief's picks newsletter here