SEA needs to see the Silicon Valley model for what it is: flawed

Ramon Pacheco Pardo co-authored this article.

Despite what many believe, there’s more than one model for a startup ecosystem.

While the Silicon Valley model – where disruptive startups challenge and replace incumbent companies – has dominated global thinking about entrepreneurship, a different approach may make better sense for Southeast Asia’s more nascent startup scene.

Photo credit: Uladzik Kryhin / Shutterstock

Strategies used in Japan and South Korea, for instance, foster a more collaborative model of innovation.

In these two nations, governments recognize that while startups are crucial drivers of innovation, large firms play a vital role in bringing new technologies to market. Rather than pitting startups against established companies, policymakers in these countries have encouraged collaboration between the two groups.

This “David and Goliath” model of innovation – where small startups inject ideas and talent into large conglomerates – has helped both parties harness each other’s strengths to drive technological advances and economic growth.

While some Southeast Asian nations already do this, adopting a similar approach for the wider region could be transformative.

Silicon Valley flaws

The Silicon Valley model has long been seen as the gold standard for innovation. By and large, public policy has treated startups and large firms separately.

But as has been argued elsewhere, the collective US innovation system could benefit from policies to turbocharge the David and Goliath model instead.

See also: VC is on the ropes in SEA. Here’s how it can bounce back

The Silicon Valley approach is an outdated idea, tied closely to the unique economic conditions of the US in the latter half of the 20th century.

Now, Silicon Valley’s startups are giants, and business dynamism has declined.

The approach also doesn’t account for the diverse cultures, languages, and political regimes of places like Southeast Asia.

Getting a boost

Allies, not disruptors

Political push

Better together