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Most metrics in the startup ecosystem put Silicon Valley at the top. It produced more “unicorns”, sucked up more investments, earned higher ratings, attracted the best talent, and was not too interrupted since the 1980s.
It is therefore surprising that research from King’s Business School in London claims that following innovation strategies from Japan and Korea can lead to greater success in the Southeast Asian technology scene.
Despite its advantage, Silicon Valley’s zero-sum approach – disruptive startups replacing challenges and existing people – is not the only model. This is different from open innovation strategies in countries such as Japan and South Korea, where large companies tend to work with startups. There, startups often act not as challengers to them, but as boosters of the competitiveness of large, established companies.
This collaboration with startups that inject “innovative DNA” while benefiting from conglomerate supply chains, distribution networks and customers, along with Robin Klinger Bidra, Associate Professor of Politics and Economics, and colleagues at KBS, could serve as a model for the early startup scene in Southeast Asia, according to the entrepreneurship of Ramon Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid Paid
“We believe that the Silicon Valley approach is somewhat outdated and closely tied to the unique economic situation in the United States of America in the late 20th century. Silicon Valley startups are currently a giant and business dynamism, with both growth and obstacles declining. “A more collaborative approach in Japan and Korea provides alternatives that allow large companies to stay competitive in rapidly changing markets, providing resources and networks that need to expand to startups.”
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This study also looked at China and Taiwan, but their startup models are more hybrid and complex. Open innovations are being developed more clearly in Japan and South Korea to benefit large and start-up companies.
In the context of Silicon Valley’s extraordinary ability to mobilize capital and resources, Klingra Vidra and Pardo make bold claims. Large companies are involved in Silicon Valley startups as corporate venture capital, accelerators, or judges on startup panels, but their objectives are not necessarily transparent. Pardo said: “The South Korean and Japanese governments recognize that they cannot overhaul the economic structure that has existed for decades. So, in a sense, they don’t pretend they want to challenge startups to the extent that they (large companies) essentially destroy them.”
Scholars also acknowledge the risks of mixing large companies with startups. “Of course there must be a robust legal framework to protect both parties. The overall potential benefits outweigh the potential risks,” adds Klingra Vidra.
Recent examples of East Asian collaborations include Toyota’s $44.4 million investment (via auxiliary weaving) in Japanese launch interstellar technology.
Tokyo is transparent about the role of companies in the country’s five-year startup development plan. “Open innovation promotion with companies is the third pillar of Japan’s startup development plan,” said Ryohei Gamada, who works with Japanese and overseas startups at Jethro, a Japanese external trade organisation.
In South Korea, the government’s “deep technological value” program focuses on late-stage start-up investments in sectors such as AI, biotech and green tech. Participants include Hyundai Motor and Samsung Electronics, among other things.
According to CB Insights, Japanese and Korean companies are the most active companies VCs, with five participating in the top 11 worldwide in the final quarter of 2024. Conor Moore, KPMG’s private business director, puts this into a “desire by certain countries to keep up with other ecosystems.” And overall, their investments represent some of the broader VC funds that could be more suitable for startups, as they have a shorter investment cycle.
Last year’s rankings for startup genomes in the global startup ecosystem, Tokyo and Seoul were the biggest movers in the top 10, reaching 10th and 9th respectively. Silicon Valley stayed at the top.
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The technology scene in Southeast Asia is growing rapidly. Indonesia has emerged as a major fintech hub, while Malaysia led Southeast Asia in 2024 IPO funding. In the Philippines, government support extends to the Emerging Venture Fund, which raised $245 million in 2024.
Klingra Vidra says he hopes more Southeast Asian governments will partner with larger companies and offer tax incentives for corporate investments in startups, similar to Japan’s J-Startup initiative and South Korea’s K-Startup Grand Challenge.
Tim Jackson, an active early stage emerging investor who has been running Walking Ventures Seed Fund in London since 2000, is skeptical about whether Southeast Asia can learn from Japan and South Korea. However, he believes that AI could change the launch dynamics of Asian favours. “AI allows businesses to build MVPs (minimum viable products) cheaper, faster, with fewer workers, reducing the need to approach Silicon Valley for their funds and talent. That could be a huge advantage for Asian startups,” he says.
