Policies to Promote

Private Sector Engagement in

Science, Technology and Innovation
Workbook
 Chapter 0Acknowledgements

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 platform 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, resilient, 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 designations 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 frontiers or boundaries.

ii
Chapter 0Acknowledgements

Policies to Promote
Private Sector Engagement in
Science, Technology and Innovation
Workbook

iii
 Chapter 0Acknowledgements

United Nations Publication

Copyright © United Nations 2024
All rights reserved
ESCAP / 2-TR / 1

References to dollars ($) are to United States 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 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 availability or functioning of URLs.

The views expressed in this publication are those of the authors or case study contributors and do
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The opinions, figures and estimates set forth in this publication are the responsibility of the authors
and contributors 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 particular enterprise, commercial product or process is not a
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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 and the extent of reproduction.

iv
Chapter 0Acknowledgements

Acknowledgements

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 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 Pérez Cusó, Economic 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 People’s
Democratic Republic, Thailand and Viet Nam. It 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
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 provided 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
coordinating 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 People’s Democratic Republic
• Office of National Higher 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 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 prepared by Mr.
Titipong Mahattanasin.

v
 Chapter 0Abbreviations and acronyms

Abbreviations and acronyms

CLTV Cambodia, Lao People’s Democratic Republic, Thailand and Viet Nam
ESCAP United Nations Economic and Social Commission for Asia and the Pacific
IP intellectual property
R&D research and development
SMEs small and medium-size enterprises
STEM science, technology, engineering and mathematics
STI science, technology and innovation

vi
Chapter 0Table of Contents

Table of Contents

Acknowledgements .....................................................................................................................................................v

Abbreviations and acronyms......................................................................................................................................vi

Table of Contents ...................................................................................................................................................... vii

List of Boxes .............................................................................................................................................................. viii

List of Tables ............................................................................................................................................................... ix

1. Policies to promote private sector engagement in science, technology and innovation - An introduction ... 1

2. Support for the scaling up of startups............................................................................................................. 4

2.1. Support for startup growth beyond seed funding ........................................................................... 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. Public procurement policies for startup growth ............................................................................ 24
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. Reflection questions ..................................................................................................................... 32
2.4. Conclusions .................................................................................................................................. 33

3. Building human resources capacity through private sector engagement..................................................... 35

3.1. Private sector investment in developing STI human resources ...................................................... 35

3.1.1. Corporate strategies 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. Talent mobility programmes ......................................................................................................... 47
3.2.1. Key considerations for talent mobility policies ..................................................................... 48
3.2.2. Policy instruments for talent mobility .................................................................................... 49
3.3. Reflection questions ..................................................................................................................... 56
3.4. Conclusions .................................................................................................................................. 57

4. Strategic considerations................................................................................................................................ 59

4.1. An innovation ecosystem cannot be built by top-down policies alone .......................................... 59

4.2. Networks as an implementation strategy ...................................................................................... 60
4.3. Intermediaries as essential actors ................................................................................................. 62

vii
 Chapter 0List of Boxes

List of Boxes
Box 2.1: Tax incentives and credits: Viet Nam............................................................................................................. 9
Box 2.2: Tax incentives and credits: Singapore ........................................................................................................... 9
Box 2.3: Private sector support for Cambodian startups ........................................................................................... 11
Box 2.4. Government co-investment programmes: Thailand .................................................................................... 11
Box 2.5. Government co-investment programmes: United Kingdom ....................................................................... 12
Box 2.6. Public-private partnerships for investment funds: Thailand......................................................................... 14
Box 2.7. Public-private partnerships for investment funds: Republic of Korea .......................................................... 14
Box 2.8. Regulatory sandbox: Lao People’s Democratic Republic and Thailand ...................................................... 16
Box 2.9. Regulatory sandbox: United Kingdom ........................................................................................................ 17
Box 2.10. Access to regional and global markets: Thailand ...................................................................................... 18
Box 2.11. Access to regional and global markets: Republic of Korea and Singapore .............................................. 18
Box 2.12. Research and development grants: Thailand ............................................................................................ 19
Box 2.13. Research and development grants: Hong Kong, China, and Japan ......................................................... 20
Box 2.14. Intellectual property protection and patents: Viet Nam ............................................................................ 20
Box 2.15. Intellectual property protection and patents: India ................................................................................... 21
Box 2.16. Entrepreneurial education and training: Cambodia .................................................................................. 22
Box 2.17. Innovation labs: Viet Nam.......................................................................................................................... 23
Box 2.18. Innovation hubs: Thailand.......................................................................................................................... 24
Box 2.19. Simplified procurement processes: Thailand............................................................................................. 26
Box 2.20. Simplified procurement processes: United Kingdom ................................................................................ 27
Box 2.21. Market access and opportunity creation: Thailand.................................................................................... 27
Box 2.22. Market access and opportunity creation: Republic of Korea and the European Union ............................ 28
Box 2.23. Capacity-building to participate in public procurement: Denmark and the European Union ................... 28
Box 2.24. Policy and regulatory reforms in public procurement: Lao PDR, Thailand and Viet Nam ....................................29
Box 2.25. Policy and regulatory reforms in public procurement: United Kingdom ................................................... 30
Box 2.26. E-bidding and electronic procurement infrastructure: United Kingdom ................................................... 31
Box 3.1. Academia-industry collaboration: Cambodia and India .............................................................................. 38
Box 3.2. Corporate-founded universities specializing in STI: Thailand and Egypt .................................................... 39
Box 3.3. Skills and entrepreneurship development grants: Thailand ........................................................................ 42
Box 3.4. Skills and entrepreneurship development grants: Japan ............................................................................ 43
Box 3.5. Workforce development partnerships: Thailand ......................................................................................... 44
Box 3.6. Workforce development partnerships: Republic of Korea .......................................................................... 44
Box 3.7. Research and development collaboration incentives: Thailand .................................................................. 45
Box 3.8. Apprenticeship and Internship Support: Thailand ....................................................................................... 45
Box 3.9. Apprenticeship and internship support: Singapore..................................................................................... 46
Box 3.10. Research commercialization support: Thailand ......................................................................................... 47
Box 3.11. Research and innovation grants: Thailand ................................................................................................. 47
Box 3.12. Brain circulation: Viet Nam ........................................................................................................................ 51
Box 3.13. Brain circulation: Republic of Korea........................................................................................................... 51
Box 3.14. Research secondments: Thailand .............................................................................................................. 52
Box 3.15. Research secondments: Singapore............................................................................................................ 53
Box 3.16. Joint research projects and centres: Thailand ........................................................................................... 54
Box 3.17. Joint research projects and centres: Japan ............................................................................................... 54
Box 3.18. Research fellowships: Republic of Korea ................................................................................................... 55

viii
Chapter 0List of Tables

List of Tables

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 3.1. 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

ix
Chapter 1. Policies to promote private sector engagement in science, technology and innovation – An introduction

1. Policies to promote private sector

engagement in science, technology
and innovation – An introduction

The private sector is crucial in science, This chapter outlines this workbook's
technology and innovation (STI) activities and background and rationale, objectives and
is a major force shaping and strengthening STI scope, methodology and structure.
ecosystems. In developed economies and Background and rationale
emerging economies alike, private firms not
In 2022, the United Nations Economic and
only invest substantially in research and
Social Commission for Asia and the Pacific
development (R&D), but they also develop
(ESCAP) facilitated the co-creation of a
cutting-edge technologies, create new
comprehensive South-South and Triangular
business models and pioneer emerging
Collaboration Programme on STI among
sectors, such as digital health, renewable
CLTV.1 A pivotal element of this programme
energy and artificial intelligence. Private sector
was the recognition of the private sector's
efforts are also essential in building a nation’s
crucial contribution to STI for sustainable
STI capabilities, as they enhance the
growth and innovation. This workbook
knowledge and skills of the workforce for
provides key pointers for policymakers in the
advanced STI activities.
region and beyond seeking to further engage
But private firms in developing countries face the private sector in STI, particularly to
formidable challenges to invest in STI. They facilitate the growth of startups and to foster
have limited access to finance and to skilled human resource development.
STI personnel to pursue new ideas and
Objectives and scope
technologies. They also have to overcome
substantial legal and regulatory hurdles, such This workbook is a practical resource for
as complex bureaucracies and inadequate policymakers and STI professionals, offering
intellectual property (IP) protection. tools, insights and lessons learned that can
help in formulating and implementing
Drawing primarily upon experiences from
effective policy instruments to promote
Cambodia, the Lao People’s Democratic
private sector engagement in STI. It draws
Republic, Thailand and Viet Nam (CLTV), this
upon illustrative examples that are particularly
workbook aims to explore context-specific
relevant to the CLTV context while also
policies that can promote private sector
relevant to other developing economies.
engagement in STI in developing countries.
The goal is to enable the private sector to
expand its role in building a strong STI
ecosystem.

1
See www.unescap.org/projects/south-south-triangular-
collaboration-programme-science-technology-
innovation.

1

Chapter 1. Policies to promote private sector engagement in science, technology and innovation – An introduction
This workbook addresses two pivotal
challenges confronting policymakers:
• Scaling up startups: Building a conducive
ecosystem for startups is of paramount
concern for 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
private 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 the movement of
STI personnel, particularly between
academia and industry.
Methodology
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 stakeholder
consultations, involving primarily semi-
structured interviews with CLTV policymakers,
industry leaders and academics to identify
Chapter 1.
context-specific challenges, opportunities and
options relevant to the topics at hand.
Three expert-led webinars also informed the
development of this workbook.
Workbook 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
resources 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 the
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 of the
contents of this workbook.
2
Chapter 1.
Chapter 1. Policies to promote private sector engagement in science, technology and innovation – An introduction

Figure 1. Promoting private sector engagement in STI: An overview

3

2. Support for the scaling up of
startups
Startups in CLTV face not only the common
hurdles inherent to any new business but also
the unique obstacles and specific constraints of
the economic 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 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 provide 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 and 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
2.1. Support for startup growth beyond seed funding
Government support for startups may foster
inclusivity in entrepreneurship, ensure
equitable access to resources across different
regions and demographics, and purposefully
encourage startups that seek to address
specific societal and environmental challenges.
Chapter 2. Support for the scaling up of startups
favourable policy environment that encourages
entrepreneurial activity. Governments can
facilitate access 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 their 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 scaling 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 explores two avenues of government
support for scaling up startups: supporting
startup growth beyond seed funding; and
harnessing public procurement policies for
startup growth.
By aligning the innovative drive of the private
sector with the structural and regulatory
strengths of the public sector, a more robust
and effective ecosystem for startup growth can
be established.
4
Chapter 2. Support for the scaling up of startups

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 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 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 funding rounds where the
stakes are higher.
2. Access 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, simplifying 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 entry 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 development: Startups
often need guidance 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 infrastructure, 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 startups

Addressing the challenge of scaling up startups in CLTV and other developing countries relies 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 • Simplify business registration and licensing procedures to reduce bureaucratic

favourable hurdles
regulatory • Implement tax incentives for startups and potential investors
environment • Establish clear and stable legal frameworks for business operations, IP protection
and dispute resolution
Accessing finance • Facilitate access to capital through government-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

5
 Chapter 2. Support for the scaling up of startups

Building • Invest in high-quality internet and telecommunications infrastructure

infrastructure • Develop physical infrastructure such as technology parks, incubators and co-
working spaces
• Ensure reliable and affordable energy and transportation networks
Fostering • Enhance the quality of education in science, technology, engineering and
education and mathematics.
skills • Support vocational training and mentorship programmes tailored to
development entrepreneurial and technical skills
• Encourage partnerships between educational institutions and the private sector
to align skills with market needs
Promoting • Increase funding for R&D, especially in technology and innovation
research and • Encourage collaboration between universities, research institutions and startups
innovation • Offer incentives for R&D activities within startups
Developing • Support the creation of networks and clusters that connect startups with mentors
entrepreneurial and peers
ecosystems • Facilitate the sharing of knowledge and best practices through workshops and
networking events
• Encourage the formation of associations or organizations that represent the
interests of startups
Fostering • Foster partnerships with international organizations and other Governments to
international gain access to global markets
collaboration and • Help startups to navigate international trade regulations and standards
market access • Promote participation in international trade fairs and business matchmaking
events
Addressing social • Incentivize startups that are addressing key social and environmental issues
and • Integrate sustainability and social impact criteria into funding and support
environmental programmes
challenges
Monitoring and • Implement mechanisms to regularly assess the impact of policies and
evaluation programmes supporting startups
• Be flexible and willing to adapt policies based on feedback and changing market
dynamics
Supporting good • Establish robust governance frameworks and strengthen governance with
governance transparent regulations and accountable institutions, fostering a stable,
trustworthy environment essential for attracting startup investments
• Promote policy consistency and stability and ensure consistent, reliable
governmental policies to build investor confidence and support sustainable
entrepreneurial growth

By considering these key needs, government development. It is crucial that policies are
policymakers can create an environment that implemented with a long-term vision and are
nurtures startups, fosters innovation and adapted as the startup ecosystem evolves.
contributes to economic growth and

6
Chapter 2. Support for the scaling up of startups

2.1.2. Policy instruments to support the growth of startups

This section outlines a range of policy
instruments designed to 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 and credits are crucial
mechanisms for Governments to encourage
investment in startups.
Direct tax credits for investors: Investors
receive a reduction in their tax liability
proportional to the amount invested in
startups. This directly lowers the financial risk
for investors, making startup funding more
attractive.
Tax deductions for startup 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 impact the overall tax base
and whether they disproportionately benefit
wealthier investors.
Deferred tax payments and capital gains
exemptions: Investors may defer tax payments
or be exempt from capital gains tax, especially
for long-term holdings. This promotes long-
term investment in startups, crucial for their
stability. The policy's effectiveness depends
on the specified holding period and how it
aligns with startup growth trajectories.
R&D tax credits: Startups receive tax relief for
expenditures on R&D. This lowers the cost
barrier for innovation, but it raises questions
about the definition of qualifying R&D
activities and how to measure their direct
impact on startup success.
Sector-specific tax incentives: Investors
receive tailored tax benefits for investments in
high-potential yet high-risk sectors. 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 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
policymakers 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).

7

Table 2.2. Overview of tax incentives and credits
Benefits
Direct tax credits for investors
• Boosting investments in emerging STI fields,
critical for technological and scientific
advancements in developing countries
• Helping to 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
Tax deductions for startup investments
• Making investments in startups financially more
appealing, possibly leading to larger
investment amounts
• Stimulating investments across a broader range
of startups, not just in high-growth sectors
Deferred tax payments and capital gains exemptions
• Encouraging long-term investment, providing
startups with more stable and sustained
funding
• Potentially increasing the return on investment,
attracting more risk-averse investors
• Attracting foreign investors looking for
favourable tax regimes
R&D tax 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
Sector-specific tax incentives
• Driving investment towards 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
Chapter 2. Support for the scaling up of startups
Challenges
• Determining the appropriate size of tax credits
to 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 exploited by investors who prioritize tax
benefits over the viability of startups
• 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 disparities
• Monitoring and enforcing compliance, ensuring
only legitimate STI investments benefit
• Determining the optimal holding period for tax
benefits to ensure long-term commitment
without locking in funds excessively
• Balancing the future tax revenue implications
with immediate economic growth needs
• Developing countries may 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
• Managing the risk of neglecting other crucial
sectors not covered by the incentives, which
can lead to imbalanced development
• Continuously adapting as the country's STI
priorities and global technological trends
evolve.
8
Chapter 2. Support for the scaling up of startups

Box 2.1: Tax incentives and credits: Viet Nam

The Government of Viet Nam aims to attract high-tech startups and facilitate technology 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 in 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 significantly 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 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 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-briefing.com/news/vietnams-startup-ecosystem.html/; and Source of Asia, 2023, “Start-
up in Vietnam: A promising and favorable ecosystem”. Available at www.sourceofasia.com/start-up-in-vietnam-a-
promising-and-favorable-ecosystem/.

Box 2.2: Tax incentives and credits: Singapore

The Productivity and Innovation Credit scheme, 2011–2018, 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;
acquisition 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 taxable
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). This 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.

From 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).

Source: See www.iras.gov.sg/taxes/corporate-income-tax/specific-topics/productivity-innovation-credit-(pic)-

scheme.

9
 Chapter 2. Support for the scaling up of startups

2.1.2.b. Government co- in sectors aligned with national interests such

investment programmes
The private sector has invested in startups
through various investment channels,
including private 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, 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
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 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 steps 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 • Define the programme's primary objectives, such as promoting innovation,
objectives and generating employment, or backing specific sectors such as green technology or
target sectors 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
and initiatives for coherence and synergy.
Create a • Set the ratio for government-to-private sector investment, including a cap on
balanced co- government contribution to ensure a balanced risk-sharing mechanism.
investment • The structure should incentivize rather than deter private investments, avoiding
structure market distortion and over-reliance on government funds.
Develop criteria • Establish clear criteria that prioritize startups with significant growth potential and
for startup societal impact, and safeguard the process from political influence and bias.
selection • Ensure a fair and unbiased evaluation and selection process to maintain high
standards of transparency and accountability.
Enhance investor • Demonstrate the government's commitment to reducing investment risks and
confidence elucidate how its involvement bolsters a startup's credibility in the market.
• Engage with private investors to comprehend their needs and foster further
investment and collaboration.
Implement and • Initiate the programme with explicit guidelines and administrative frameworks,
monitor the continuously assessing its impact on startup support and economic development.
programme • Incorporate robust monitoring and evaluation mechanisms to navigate challenges,
adapting the programme based on feedback and evolving market conditions.
Complement • Guarantee the programme's supplementary nature to private investments, steering
private clear of competing with private sector endeavours.
investment • Ensure the programme can adapt to changing market dynamics and emerging
efforts sectors to maintain relevance and effectiveness.

10
Chapter 2. Support for the scaling up of startups

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 firms, 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 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, data 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 Smart 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 Axiata's
extensive partner network.
SmallWorld, a Cambodian incubator, targets early-stage 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 instance, 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 SmartScale, 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 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. Vandenberg, 2002, Cambodia’s Ecosystem for Technology Startups. Manila: Asian
Development Bank. Available at www.adb.org/sites/default/files/publication/804931/cambodia-ecosystem-
technology-startups.pdf. See www.cbinsights.com/investor/smart-axiata-digital-innovation-fund; and
www.cbinsights.com/company/smallworld-venture.

Box 2.4. Government co-investment programmes: Thailand

In Thailand, initiatives by the Digital Economy Promotion Agency (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 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, DEPA extends up to THB 5 million (USD 140,000).
This support targets startups with proven product-market fit, assisting them in overcoming the challenge

11
 Chapter 2. Support for the scaling up of startups

of securing series A funding through flexible repayment options, including low-interest loans or equity
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 profit 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 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 project 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 startups. 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 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://thethaiger.com/news/business/nia-reform-thailand-supports-startups-and-smes-market-entry; and
www.bangkokpost.com/business/general/2623939/ted-fund-sets-out-strategy-to-offer-more-support-to-startups.

Box 2.5. Government co-investment programmes: United Kingdom

The Future Fund in the United Kingdom was a pivotal initiative tailored 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 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 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 at least GBP
250,000 (USD 316,500) in equity investment from third-party investors in the past five years and match
the Government’s loan with private investor funding. This structure was designed to encourage private
investment, making it an attractive proposition for both startups and investors. The use 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 Innovate 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-interruption-loan-schemes/future-

fund/; and https://som.yale.edu/blog/governments-support-businesses-through-equity-investments.

12
Chapter 2. Support for the scaling up of startups
2.1.2.c. Public-private
partnerships for
investment funds
Governments may support startups by
collaborating with private sector 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 startups 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 market
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 associations,
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
investments 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 and additional investors.
Lastly, they play an advocacy role,
representing the startup ecosystem's needs to
policymakers, thereby fostering a more
supportive environment for startups.
13
Incorporating these intermediaries enhances
the effectiveness of public-private partnership
investment initiatives.
When crafting policies to foster public-private
partnerships in investment funds,
policymakers may consider the factors listed
below.
• Objective alignment and sector focus:
Clearly define fund objectives to ensure
alignment with broader economic,
innovation and sectoral priorities,
emphasizing strategic areas for national
development.
• Risk management: Develop risk mitigation
strategies to make these partnerships
appealing to private investors, potentially
including guarantee schemes or shared
risk models.
• Regulatory and incentive 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 selection: Institute transparent,
stringent selection processes to ensure
investments target startups with
substantial growth prospects and sound
business models.
• Intermediary roles: Clarify the involvement
of intermediary organizations in the vetting
process and in facilitating connections,
leveraging their expertise for the
initiative's success.
• Capacity-building and knowledge
exchange: 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 monitoring: Implement
comprehensive monitoring and evaluation
frameworks to assess the funds' impact,
adjusting strategies as necessary to
enhance effectiveness.
• Sustainability and future planning: Ensure
the partnership's design is sustainable,
with a long-term perspective, including
 Chapter 2. Support for the scaling up of startups

planning for the government's eventual • Stakeholder engagement: Actively involve

exit to allow for greater private sector
leadership.
• Transparency and accountability: Maintain
openness and accountability in fund
operations, with clear reporting on fund
utilization, decisions and outcomes.
all relevant parties, including startups,
investors and industry experts, in dialogue
and feedback, employing effective
communication to manage expectations
and highlight the initiative's benefits.

Box 2.6. Public-private 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 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 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 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 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: See www.bangkokpost.com/business/general/2235387.

Box 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 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 established 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, cybersecurity and networking, system
semiconductors, big data and artificial intelligence), showcasing a focus on cutting-edge and high-growth
industries.

Source: See www.koreatechdesk.com/Korean-government-unveils-ambitious-initiatives-to-foster-global-startups-

and-unicorns/.

14
Chapter 2. Support for the scaling up of startups
2.1.2.d. Regulatory support and
sandboxes
Stringent regulatory requirements can pose
significant 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 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 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 models, 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
bureaucratic 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
2
Hilary J. Allen, 2019, “Regulatory sandboxes”. George
Washington Law Review, vol. 87, No. 3, p. 579.
15
technological advancement. Regulatory
sandboxes are often adopted in the financial
sector, as in the Lao People’s Democratic
Republic and Thailand (box 2.8) and in the
United Kingdom (box 2.9).
Policymakers aiming to implement regulatory
sandboxes may wish to consider the following
recommendations.
Tailoring to local needs and building
regulatory expertise: Design sandboxes to
reflect the specific economic, technological
and regulatory contexts of the region,
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
training in new technologies and innovative
business models.
Objective definition, infrastructure and
consumer protection: Clearly articulate the
sandbox's goals, including the types of
innovations it will support, and ensure the
provision of essential 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 become a
means for companies to circumvent important
regulations.
Stakeholder engagement and international
collaboration: Foster collaboration with a wide
range of stakeholders, including industry
experts, incumbent firms and startups, to
refine sandbox policies and ensure they
 Chapter 2. Support for the scaling up of startups

address practical business needs. Additionally, Adaptability, risk management and

engage with international organizations and
other countries to share best practices and
potentially secure support to enhance
sandbox effectiveness. Address regulatory
issues that may emerge as startups expand
internationally, striving for policy
harmonization and international cooperation
to facilitate seamless cross-border operations.
transparency: Maintain the flexibility to update
sandbox regulations 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 startups
and the results of sandbox trials.

Box 2.8. Regulatory sandbox: Lao People’s Democratic Republic and Thailand

In the Lao People’s Democratic Republic, the collaboration between Prudential Life Assurance (Lao)
Company Limited and the Department of State-Owned Enterprise Reform and Insurance (DSRI), Ministry
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 trends 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 sandbox environment offers a period of 6–
12 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 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 Digital 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, electronic 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 laundering 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 fintech innovation. KrAsia, 13 June. Available at https://kr-
asia.com/across-asean-regulatory-sandboxes-are-managing-risk-in-fintech-innovation.

16
Chapter 2. Support for the scaling up of startups

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 for 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 to 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 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 Authority 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 jurisdictions 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
Authority’s regulatory 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 UK’s Regulatory
Sandbox: How It Fosters FinTech Innovation, Drives Multisector Growth. 20 July. Available at
www.pymnts.com/news/regulation/2022/inside-the-uks-regulatory-sandbox-how-it-fosters-fintech-innovation-
drives-multisector-growth/.

This support is particularly valuable for

2.1.2.e. Access to regional 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 region, 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 by organizing trade missions,
offering diplomatic support and facilitating
access to international networks.
startups aiming for series B funding, where
demonstrating potential for international
growth can attract larger investments.
Government-backed initiatives 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 sectors, 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.

17
 Chapter 2. Support for the scaling up of startups

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 startups 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 2021–2022, the partnership targeted investments in the agri-tech, ed-tech and fintech sectors,
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 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, Chiang Mai and the Eastern Economic Corridor.

Sources: See www.krungsri.com/en/newsandactivities/krungsri-banking-news/krungsri-mou-depa-encourage-thai-

startups; and www.bangkokpost.com/business/general/2194491/krungsri-pact-with-depa-eyes-startups.

Box 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 more 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 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. 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” programme
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 international 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 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 Initiatives to Foster Global Startups and
Unicorns by 2027. KoreaTechDesk. Available at www.koreatechdesk.com/korean-government-unveils-ambitious-
initiatives-to-foster-global-startups-and-unicorns/; Kim Moore, 2023, Korea plans USD 1.5 billion fund to support
deep tech startups. Global Corporate Venturing. Available at https://globalventuring.com/corporate/asia/korea-
plans-1-5bn-fund-to-support-deep-tech-startups/; See www.todayonline.com/singapore/s15m-ipact-scheme-seeks-
help-tech-start-ups-tap-mnc-expertise and www.enterprisesg.gov.sg/financial-support/market-readiness-
assistance-grant.

18
Chapter 2. Support for the scaling up of startups

This is especially useful for deep technology

2.1.2.f. Research and companies with significant R&D spends and long
development grants times to market.

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 appealing 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 advanced 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 States offers
grants to early-stage founders to bring
innovative technologies to market.
Offering matching grants is another effective
approach to foster the growth of startups
engaged in R&D activities. 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 leveraging private
investments, matching grants not only inject
additional funding into startups but also signal
the credibility of the startup to potential
investors and the Government's confidence in its
potential. This approach can be particularly
impactful in advancing the technological
innovations that 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 financial 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 project's value.
Matching grants are a significant part of the Agency’s support, encouraging the growth of innovation-based
businesses by requiring 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 42,000), 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 enter 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 Innovation…No Interest" mechanism aids business expansion and commercialization 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 bankruptcy 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.

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 Chapter 2. Support for the scaling up of startups

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-dollar 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 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. The 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 funding 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-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 into
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.gov.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 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. Consequently, 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 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 Agreement 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.

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Chapter 2. Support for the scaling up of startups

To create 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
intensive 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 innovative 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 advancements, 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 accounting 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; Mark Barnes, 2023, 8 Regulations and Policies Supporting Startups in Vietnam. Vietnam Briefing, 13
February. Available at www.vietnam-briefing.com/news/vietnam-startup-policy-initiative.html/.

Box 2.15. Intellectual property protection and patents: India

In India, the Startup India Campaign and the Scheme for Facilitating Startups Intellectual Property
Protection (SIPP), launched 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 registration. 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
facilitators 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 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 international 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 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: Government’s Focus 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.

21
 Chapter 2. Support for the scaling up of startups

Training in crafting persuasive pitch decks is

2.1.2.h. Entrepreneurial education
and training
Startups 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 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 landscape.
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.
Mentorship 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,
innovative 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 (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 conducive 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 entrepreneurial 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 University, 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 of 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, particularly 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://kiripost.com/stories/cambodia-twenty-seven-startups-and-smes-receive-5000-to-20000-grants;
SME Bank, 2022, SME Bank and Khmer Enterprise Signed Memorandum of Understanding to Cooperatively
Promote and Develop SMEs in Cambodia (21 December); See https://techostartup.center/.

22
Chapter 2. Support for the scaling up of startups

policy frameworks and regulations that

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 workspace,
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,
connecting 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-related 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 business world and in
achieving sustainable growth and success.
Governments can create and support
innovation hubs by establishing supportive
simplify business registration processes, offer
tax incentives and the protection of IP rights.
Financial support is crucial, and 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 advancements 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
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
transformation (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 Telecoms 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 Viettel’s commitment to nurturing new technology and fostering community connectivity.
The labs are designed to accelerate the digital 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.

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 Chapter 2. Support for the scaling up of startups

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, narrowband 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 infrastructure, 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 in 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 the 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 Digital 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 innovation 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 cities are transforming urban areas into
dedicated zones for technological and creative industries, aiming to stimulate economic growth and
innovation.

Source: See www.truedigitalpark.com/en/about/about-us.

2.2. Public procurement policies for startup growth

This section explores how procurement
policies can support startup growth,
specifically how procurement 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 also beneficial when
attracting Series A and B investors, as a proven
history of government contract achievements
can significantly enhance a startup’s appeal
and investment potential. By participating in
government procurement processes, startups
gain valuable experience and exposure.

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Chapter 2. Support for the scaling up of startups

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 targeting startup growth

Impact of The growth and success of startups and SMEs, especially in developing countries, are
procurement significantly influenced by procurement policies and regulations. The complexity of
policies and procurement processes poses challenges for small businesses due to limited resources
regulations and capabilities, with extensive paperwork, necessary certifications and compliance
checks acting as major barriers.

Terms of Often, the terms of reference formulated by government officials favour companies with
reference and prior experience, limiting opportunities for new entrants. In countries such as Thailand,
market entry 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
procurement from smaller businesses can help level the playing field.

Cash flow For startups and SMEs, cash flow is a critical issue. Policies ensuring timely payment for
challenges products or services are crucial for their survival and growth. In Thailand, bidding for
government projects often requires a deposit, which can tie up finances and adversely
affect the financial health of startups.

Innovation and Startups, typically at the forefront of innovation, can benefit from procurement policies
procurement that prioritize innovation. This benefits not only the 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 Successfully handling procurement processes and fulfilling substantial contracts can
networking assist startups and SMEs in scaling their operations and offer networking opportunities
through with larger companies and government bodies, potentially leading to long-term
procurement partnerships and collaborations.

Risk-sharing in Procurement policies that share risks between the procuring entity and the supplier are
procurement beneficial for startups, which typically lack the financial reserves to handle high-risk
policies contracts.

In summary, thoughtfully designed Balancing transparency and accountability in

procurement policies can significantly drive procurement with the needs of smaller
the growth of startups and SMEs, while overly businesses is key to supporting their growth
complex regulations can limit their potential. and success.

25
 Chapter 2. Support for the scaling up of startups

2.2.2. Designing 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 procurement 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 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
frameworks, 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 government
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
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
initiative 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 these 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 allowing 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
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 businesses
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

26
Chapter 2. Support for the scaling up of startups

200,000 (USD 5,600) corporate tax deduction, encouraging the adoption of digital technologies and
supporting Thailand's 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 www.bangkokpost.com/life/tech/2507584/des-launches-digital-purchase-scheme.

Box 2.20. Simplified procurement processes: United 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 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 suppliers. 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.tendersdirect.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 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 procurement 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 several 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 10 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 cent 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 www.nationthailand.com/in-focus/30393864.

27
 Chapter 2. Support for the scaling up of startups

Box 2.22. Market access and opportunity creation: 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 exclusively 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 types 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, 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 www.thepickool.com/korean-public-sector-must-procure-8-of-total-budget-for-startups-product/; and

http://data.europa.eu/eli/dir/2014/24/oj

2.2.2.c. Capacity-building and

support programmes
Government programmes can help to build
the capabilities of startups and SMEs so they
can effectively participate in government
procurement.
This includes training programmes to help
entrepreneurs to understand the procurement
process, technical assistance in preparing
bids, mentorship by experienced businesses
and support in business development. Such
initiatives help in enhancing the skills and
knowledge base of these companies, thereby
improving their chances of success in
government contracts. Examples from
Denmark and the European Union are
provided in box 2.23.

Box 2.23. Capacity-building to participate in public procurement: Denmark and the European Union

The GovTech Programme in Denmark serves as a pioneering model for public procurement processes
that significantly bolster the capacity and growth of startups. This initiative, focused on collaboration
between public authorities and technology companies, especially caters to the development of
innovative solutions tailored for the Ministry of Industry, Business and Financial Affairs.

The programme supports startup growth through a process outlined below.

• Challenge definition: The initial phase involves public bodies, such as the Danish Safety Authority
and Aarhus Municipality, identifying real-world challenges. This approach gives startups the
opportunity to align their innovations with the actual market.
• Open calls to technology providers: Inviting technology providers to propose solutions to these
challenges opens doors for startups to engage directly with potential government clients. This
exposure not only increases their visibility but also helps them understand the complexities and
requirements of government contracts.

28
Chapter 2. Support for the scaling up of startups

• Supplier selection: The selection process allows startups to compete on merit and innovation, not
just on size or past experience. This levels the playing field, giving newer, smaller companies a fair
chance to showcase their solutions.
• Proof of concept market engagement: Selected startups participate in a focused proof of concept
phase, involving workshops and presentations to government panels. This phase is crucial for
startups to demonstrate the feasibility and effectiveness of their solutions. It also provides them
with valuable insights into the procurement process, user needs and practical challenges in the
public sector.

Only a few startups are selected as suppliers and advance to the proof of concept stage. This competitive
environment drives startups to hone their innovations and business strategies.

The varied nature of the challenges, ranging from digital technology for electronic invoicing to automated
solutions for government operations, indicates the breadth of opportunities for startups. This diversity
allows startups to apply their expertise and innovate in niche areas.

By focusing on matching the best technological solutions with real public sector needs, the GovTech
Programme in Denmark not only facilitates the growth of startups but also fosters a symbiotic
relationship between the public and private sectors.

In the European Union, BRINC Training for SMEs is designed to help SMEs navigate the procurement
process, prepare bids and understand the opportunities available in this sector.

Sources: See www.public.io/case-study/govtech-program-denmark; and https://public-buyers-

community.ec.europa.eu/events/what-public-procurement-learn-how-navigate-within-public-procurement-brinc-
training-smes.

2.2.2.d. Policy and regulatory

reforms
To create a more favourable environment for
procurement. Such reforms may also focus on
startups and SMEs in some countries,
increasing transparency, reducing corruption
Governments may need to overhaul the whole
or ensuring fair competition. Examples from
policy and regulatory framework, including
the Lao People’s Democratic Republic,
legislative changes, new policy directives and
Thailand and Viet Nam are contained in box
adjustments in procurement regulations so
2.24 while an example from the United
that these enterprises may more easily enter
Kingdom is contained in box 2.25.
into and participate in government

Box 2.24. Policy and regulatory reforms in public procurement: Lao People’s Democratic Republic,
Thailand and Viet Nam

The Government of the Lao People’s Democratic Republic has enhanced its public procurement process,
notably with the introduction of procurement laws since the early 2000s supported by the Asian
Development Bank. This effort is part of broader economic and fiscal reforms, aiming to improve the
efficiency of public spending. The Public Procurement System Reform Strategy 2019–2025 focuses on
streamlining procurement procedures, aligned with the 2018–2025 budget reform and includes a review
of legal frameworks and international best practices. Moreover, amendments to the Law on Micro, Small

29
 Chapter 2. Support for the scaling up of startups

and Medium Enterprises in 2022 have been particularly aimed at enabling these enterprises access to
public procurement, to help them to meet the required standards for providing goods and services.

In Thailand, the Government has implemented measures level the playing field in public procurement.
The Department of the Comptroller-General has taken significant steps to prevent large firms from
masquerading as SMEs to win government contracts and ensuring that SMEs have a fair chance at
securing these opportunities. This includes stipulations regarding the annual income of entrepreneurs
bidding as SMEs.

The Bidding Law No. 22/2023/QH15, effective from 1 January 2024, was introduced in Viet Nam, to
enhance the participation of startups and SMEs in bidding processes. The law promotes a merit-based
evaluation system, it includes business households in tendering activities, and it encourages innovation
by fostering a competitive bidding environment. In Viet Nam, business households are small, often family-
operated businesses without formal incorporation. This shift is likely to level the playing field for smaller
businesses, including startups and SMEs. It also ensures the independence of contractors from project
management entities, enhancing the integrity of the tendering process, ensuring that it is not unduly
influenced by larger companies with pre-existing ties. Lastly, the law provides detailed provisions about
the tendering process, selection criteria and contract requirements, offering much-needed clarity to help
startups and SMEs to navigate complex public procurement processes.

Sources: See https://data.laos.opendevelopmentmekong.net/laws_record/reform-strategy-on-public-procurement-

system-reform; and https://kpmg.com/vn/en/home/insights/2023/09/technical-update-legal-update-september-
2023.html.

Box 2.25. Policy and regulatory reforms in public procurement: United Kingdom

The Procurement Act in the United Kingdom, set for implementation in October 2024, introduces
significant changes to public procurement that are expected to benefit startups and SMEs. Key features
include streamlined public sector procurement, aiding SMEs in accessing a share of the GBP 300 billion
public sector expenditure. The Act will also address SME challenges in procurement, such as easing
insurance requirements during bidding to lower upfront costs. It will include a public debarment list for
high-risk suppliers, safeguarding national security and providing a more stable environment for SMEs.

In addition, the Act will promote innovation and value in public contracts, offering flexibility for
negotiable prices and solutions, benefiting technology startups. Last but not least, the Act stipulates
prompt payment within 30 days in the public sector supply chain and enhances transparency in
emergency procurement.

Source: See https://procurementmag.com/articles/how-will-uk-procurement-act-help-smes.

30
Chapter 2. Support for the scaling up of startups

The expedited nature of e-bidding processes

2.2.2.e. E-bidding and electronic
procurement
infrastructure
E-bidding (i.e. digital bidding) infrastructure
may be a transformative opportunity for
startups and SMEs in securing government
contracts. This system is expected to enhance
transparency and mitigate corruption risks by
ensuring that all bids are visible and accessible
in a public domain, thereby fostering a fair and
competitive environment. Moreover, the
ubiquity of digital platforms means that
startups and SMEs can access tender
opportunities from any location, a feature that
democratizes the process and is especially
beneficial for businesses in remote areas.
The digitalization of the bidding process is
expected to significantly lower the entry
barriers for smaller firms. An e-bidding system
simplifies traditional tendering processes,
often characterized by extensive paperwork
and complex procedures that can be
particularly challenging for smaller enterprises.
Cost efficiency is another critical advantage of
e-bidding that is particularly pertinent for
startups operating under constrained financial
resources. These considerable savings
enhance the financial viability of participating
in government tenders.
is also noteworthy. Startups and SMEs often
lack the resources to engage in prolonged
bidding processes, and a faster turnaround
time can lead to quicker contract awards and
commencement of work. Additionally, real-
time information and updates provided by
digital platforms enable businesses to respond
promptly to opportunities and requirements.
The automatic storage of documents and
communications by digital bidding systems
ensures efficient record-keeping and
documentation. This aspect is crucial for
tracking bids and maintaining necessary
documentation for future reference.
Importantly, e-bidding promotes enhanced
competition by making the process more
accessible and transparent, encouraging more
businesses to participate.
This can lead to more competitive pricing and
innovative solutions for the Government.
Lastly, regular participation in e-bidding can
help startups and SMEs to understand the
intricacies of government contracts and build
capacity and experience, which is invaluable as
they begin competing for larger contracts.
One best practice of an e-bidding and e-
procurement platform is the Crown
Commercial Service in the United Kingdom
(box 2.26).

Box 2.26. E-bidding and electronic procurement infrastructure: United Kingdom

In the United Kingdom, the Crown Commercial Service (CCS) has been integrating digital and electronic
platforms into their procurement processes to assist startups and SMEs. This digital focus is a pivotal
element of the strategy to make government procurement more accessible and streamlined. Key among
these digital initiatives is the transformation of procurement processes. CCS has digitalized parts of the
procurement process for more efficient participation of SMEs in government contracts.
Another significant digital innovation is the adoption of dynamic purchasing systems that provide an
efficient, electronic route for SMEs to access and bid for government procurement opportunities. They
permit suppliers to join at any stage and are particularly beneficial for SMEs due to their electronic,
streamlined nature and self-certification capability.
To simplify the bidding process, CCS has introduced electronic templates and simplified bid packs to
streamline the documentation process, enabling SMEs to respond to procurement opportunities more
effectively and efficiently. Online platforms such as 'Contracts Finder' and 'Find a Tender' play a crucial

31
 Chapter 2. Support for the scaling up of startups

role. They enhance the visibility and accessibility of government tenders so that users can easily find and
apply for them. Moreover, CCS offers comprehensive digital guidance for SMEs on their website, which
includes information on becoming a supplier, navigating the procurement process and effectively utilizing
the available digital tools.
By leveraging technology, CCS is not only streamlining procurement processes but also supporting the
wider objective of building a more digitalized, efficient and inclusive public sector procurement system.

Source: See https://www.crowncommercial.gov.uk/news/ccs-publishes-its-first-sme-action-plan.

2.3. Reflection questions

Policymakers may want to consider the
following questions when designing policy
instruments to support the growth of startups.
Assessing market needs and startup
challenges: What are the unique challenges
and market needs of startups in your country,
particularly during the growth stages beyond
seed funding?
Evaluating existing policies: How effective are
current government policies and programmes
in supporting startup growth and bridging the
capital gap? What lessons can be learned from
these existing approaches?
Tailoring tax incentives and credits: Given the
economic and fiscal context of your country,
what specific types of tax incentives and
credits might be most effective in promoting
startup growth and attracting series A and B
funding?
Addressing regulatory hurdles: What are the
key regulatory hurdles faced by startups in
your country, and how can government
intervention help simplify these challenges?
Measuring impact and success: How will you
measure the success and impact of the policies
and programmes implemented to support
startup growth? What metrics will be used?
Engaging with stakeholders: How can you
ensure effective engagement with
stakeholders, including startups, investors and
industry experts, to shape and refine these
policies?
Leveraging international best practices: What
lessons can be learned from the policy
approaches of other countries, and how can
these be adapted to fit your country’s unique
context?
Ensuring sustainability: How can these policies
be designed to ensure long-term sustainability
and continued relevance in the evolving
startup ecosystem?
Promoting inclusivity: How can your policies
ensure that the benefits are distributed
equitably among startups across different
sectors and regions within your country?
Future-proofing policies: As technology and
market dynamics evolve rapidly, how can your
policies remain flexible and adaptable to
future changes and challenges?
When designing public procurement policies,
policymakers may want to consider the
following questions.
Evaluating procurement barriers: What
specific barriers do startups in your country
face when attempting to engage in
government procurement processes, and how
can these barriers be effectively reduced or
eliminated through policy changes?
Tailoring procurement policies: Considering
the unique challenges and needs of startups

32
Chapter 2. Support for the scaling up of startups

and SMEs in your country, how can startups and SMEs, encouraging their
procurement policies be adapted to support participation?
these entities more effectively, ensuring they
Leveraging technology for efficiency: In what
have equitable access to government
ways can digital platforms and e-procurement
contracts?
systems be utilized to facilitate the
Measuring policy impact: What metrics or participation of startups in government
indicators could be used to assess the procurement, ensuring efficiency and
effectiveness of revised procurement policies accessibility?
in supporting startup growth and participation
Creating a supportive ecosystem: Beyond
in government contracts?
procurement policies, what additional support
Fostering innovation through procurement: mechanisms (e.g. mentorship, training,
How can government procurement policies be financial incentives) could be implemented to
structured to prioritize and incentivize prepare startups to successfully bid for and
innovation, particularly in strategic sectors that execute government contracts?
are crucial for your country's overall economic
Encouraging collaborations: How can
and technological development?
procurement policies encourage
Streamlining the procurement process: What collaborations between startups and larger
specific steps can be taken to simplify the firms or between startups and academic
procurement process, making it more institutions, fostering innovation and capacity-
accessible and less cumbersome for startups building?
and SMEs to participate in government
Monitoring and continuous improvement:
tenders?
What mechanisms can be put in place to
Ensuring transparency and fairness: How can continuously monitor, review and improve
transparency and fairness in the procurement procurement policies to ensure they remain
process be enhanced to build trust among relevant and effectively support startup
growth?

2.4. Conclusions
Governments play a crucial role in fostering B investment rounds that are more substantial.
the growth of startups by implementing a These measures not only provide financial aid
variety of measures, ranging from direct but also create a nurturing environment for
financial support to revising public startups.
procurement policies. By adopting innovative
Public procurement policies are a vital area
policy tools and mechanisms, Governments
where Governments can significantly impact
can effectively support startups in transitioning
startup growth. Through these policies,
from seed funding to more advanced stages
Governments can open up new avenues for
of financing. Innovative approaches, such as
startups to generate revenue, enhance their
offering tax incentives to investors,
credibility and gain valuable market exposure.
establishing government co-investment
In addition to simplifying the procurement
programmes and providing regulatory
process to make it easier for startups to
support, are essential in bridging the gap
participate, Governments can establish
between early funding stages and series A and
specific measures (e.g., setting aside contracts

33
 Chapter 2. Support for the scaling up of startups

for startups, providing preferential scoring in conducive environment for startups and SMEs
tender evaluations and offering financial to thrive in government procurement
incentives such as grants and subsidies) to scenarios.
level the playing field and give startups a
These policies and instruments can create a
chance to compete with larger, established
supportive ecosystem for startups and
companies. Training startups to understand
encourage their growth beyond the seed-
and navigate the procurement process,
funding stage. Overall, a holistic approach that
offering mentorship and assisting in business
combines financial assistance, regulatory
development can significantly improve their
support, capacity-building and equitable
chances of securing government contracts.
procurement policies is essential for
Furthermore, policy and regulatory reforms
Governments to effectively foster startup
that increase transparency, reduce corruption
growth.
and ensure fair competition create a more

34
Chapter 3. Building human resources capacity through private sector engagement
3. Building human resources capacity
through private sector engagement
The role of the private sector, particularly large
private corporations and state enterprises, is
vital in augmenting STI human resources in
developing countries. While acknowledging
the multifaceted nature of STI capacity-
building, which includes infrastructure
development, R&D partnerships and IP rights,
this workbook narrows the focus to human
resource development.
The first section of this chapter highlights ways
in which the private sector may invest in
developing STI human resources both within
organizations and externally with educational
3.1. Private sector investment in developing STI
human resources
Investment in STI human resources is an
indispensable factor in developing an
innovative economy and solving societal
challenges. Skilled professionals in STI fields
are the cornerstones of any R&D initiative.
Their expertise leads to scientific discoveries,
technological advancements and the
development of innovative solutions to
complex problems.
With direct insight into industry-specific
needs, private companies tailor human
resource development initiatives to meet
these requirements, ensuring workforce
relevance. Particularly for multinational
corporations, global operations bring diverse
perspectives and advanced skills into the STI
human capital pool, enhancing the global
competitiveness of the workforce.
Furthermore, the private sector is pivotal in
commercializing scientific and technological
research, creating demand for professionals
35
and research institutions. It offers key
considerations for developing policy
frameworks, followed by examples of policy
instruments that support private sector
investment in building STI human resources.
The second section is on talent mobility and
programmes that aim to maintain a balance
between keeping research expertise within
academic institutions and drawing high-calibre
talent into the private sector, thereby
bolstering human resources capacities in STI.
The chapter ends with reflection questions and
conclusions.
skilled in bridging research and market
applications. Lastly, dynamic and outcome-
oriented collaborations in the private sector
often lead to more effective training
programmes and knowledge exchange,
reinforcing their unique and vital role in
developing STI human capital.
By contrast, in most developing countries,
private sector investment in R&D tends to be
lower compared to public sector investment.
Typically, only a few large companies, which
have better access to capital, can afford
significant R&D investment. This investment is
crucial for technological progress and often
requires specialized human resources.
However, investing in STI is risky and requires
a long-term commitment that companies in
these countries are often hesitant to make.
Nonetheless, investment of the private sector
in STI human resources, while aimed at
 Chapter 3. Building human resources capacity through private sector engagement
enhancing competitiveness, yields extensive
economic benefits that extend far beyond
individual companies. For example, when a
technology firm invests in advanced training
for its engineers, it not only boosts its own
innovation capabilities but also contributes to
the country's broader technological
advancement. This leads to increased
productivity, innovation and economic
growth. Moreover, such investments create
high-quality jobs, with the additional spending
power of these employees stimulating further
economic activity.
These private sector investments also have a
ripple effect across industries and the national,
3.1.1. Corporate strategies for building STI workforce
The private sector, particularly large
corporations, deploys a multitude of strategies
and programmes to develop a workforce that
is highly skilled and specialized in STI. The
following are some examples of these
approaches.
Training and development programmes:
Companies often offer comprehensive training
and development programmes that provide
employees with the knowledge and skills
necessary to excel in their roles. These
programmes can cover technical skills,
leadership and management capabilities.
Technical skills development: Firms often offer
technical training to employees to enhance
their proficiency in specific areas such as
advanced manufacturing techniques, data
analytics, or software development.
Mentorship and coaching: Firms can
implement mentorship and coaching
programmes where experienced employees
guide and support newer ones. This can help
in transferring institutional knowledge and
fostering career development.
Continuing education: Firms can encourage
employees to pursue further education, such
regional and global markets. Knowledge and
skills acquired in one firm often transfer to
others as employees move, spreading
advanced technological expertise. This
enhances overall industry competitiveness.
Furthermore, countries recognized for their
skilled workforce in specific sectors, such as
the Republic of Korea and its electronics
workforce, attract significant foreign
investment, boosting the national economy.
Collaborations between private firms and
public research institutions, especially in areas
such as pharmaceuticals, result in societal
benefits, including technological
breakthroughs.
as certifications, diplomas, or degrees, in
relevant fields. Firms could offer financial
support or time off for education.
Cross-training: Firms can encourage
employees to diversify their skill sets by
participating in cross-training programmes
within the firm, allowing them to gain
experience across departments or roles.
Leadership development: Firms can identify
high-potential employees and invest in
leadership development programmes to
groom them for future leadership roles within
the organization.
Tuition reimbursement: Firms can reimburse
tuition costs. For instance, several large
domestic firms in Thailand already offer tuition
reimbursement programmes for employees
pursuing relevant degrees or certifications
outside of work hours.
Knowledge sharing platforms: Firms can also
develop and implement knowledge sharing
platforms and tools that allow employees to
collaborate, share information and learn from
one another, particularly utilizing digital
platforms and tools to promote the
exchanges.
36
Chapter 3. Building human resources capacity through private sector engagement
Collaboration with educational institutions:
Companies often form partnerships with
universities and technical institutions to
enhance their curricula, support research
projects and offer students practical industry
experience. Some examples from Cambodia
and India are highlighted in box 3.1.
STI-oriented universities established by
conglomerates: A few companies have
created new educational entities that align
with their corporate objectives and
philosophies, as detailed in box 3.2.
In-house research opportunities: Firms can
provide incentives and create a conducive
environment for employees to engage in
research projects related to the firm's industry
or technological advancements. This can
include providing time and resources for
research. Examples include PTT Innovation
Institute and SCG Innovation Hub from
Thailand and Viettel Innovation Labs in Viet
Nam (discussed above in box 2.17).
Side project programmes: Several innovative
firms allow employees to spend time exploring
creative solutions, applying their knowledge
to real-world problems or pursuing innovative
ideas that interest them. This culture allows
employees to explore new technologies, form
interest groups around new ideas, or find
innovative ways to run processes, while still
ensuring their regular responsibilities are met.
Many globally innovative companies use
internal competitions to foster innovative
culture. For instance, 3M allows employees to
spend up to 15 per cent of their time on
projects of their choice, often leading to
internal competitions and showcases of
innovative ideas. 3 Google is famous for
encouraging employees to dedicate a portion
of their workweek to personal projects that
3
See www.3m.co.uk/3M/en_GB/careers/culture/15-
percent-culture/.
4
See https://builtin.com/software-engineering-
perspectives/20-percent-time.
37
might benefit the company, effectively
creating a space for internal innovation.4
Internal innovation competitions: Leading
corporations foster innovative culture and
human resources internally by organizing
competitions and challenges that engage
employees across all levels and departments,
encouraging them to propose, develop and
collaborate on novel ideas and solutions
relevant to the company's strategic goals.
These initiatives, exemplified by Cisco's
Innovate Everywhere Challenge, not only
provide a platform for creativity and problem-
solving but the best ideas may receive
substantial support and incentives, such as
funding, mentorship and the opportunity to
work exclusively on developing the proposed
innovations. This approach not only
accelerates innovation within the firm but also
cultivates a culture of intrapreneurship within
the organization, thereby driving growth,
adaptation and competitive advantage in
rapidly changing markets.5
Internship and apprenticeship programmes:
Enterprises also create internship and
apprenticeship opportunities for students and
aspiring professionals. These programmes
serve as a talent pipeline for the company and
help individuals gain hands-on experience. For
example, major Thai corporations are
embracing “intrapreneurship”, fostering an
environment where employees assume
entrepreneurial roles, exhibiting traits such as
self-motivation, proactivity and a drive to
implement innovative products or services.
Examples of intrapreneurship initiatives from
petroleum and energy conglomerates in
Thailand include the Artificial Intelligence and
Robotics Ventures (ARV) from PTT Exploration
and Production Public Company Limited and
Winnonie from Bangchak.
5
Cheers to five years of Innovate Everywhere
Challenge. Cisco Newsroom. 12 September 2019.
https://newsroom.cisco.com/c/r/newsroom/en/us/a/y20
19/m09/five-years-with-innovate-everywhere-
challenge.html.
 Chapter 3. Building human resources capacity through private sector engagement

Employee resource groups: Some companies for innovation involves more than just skill and
establish employee resource groups that focus knowledge enhancement. It necessitates a
on specific fields or interests. These groups transformation of corporate culture to foster
serve as communities of practice and can an innovative mindset, especially in terms of
facilitate peer learning and networking. employee attitudes, recruitment strategies
and leadership roles in driving this change.
Performance-based incentives: Performance-
SCG in Thailand exemplifies this by shifting
based incentives and bonuses are often used
from cost leadership to a focus on high-value
to reward employees for their contributions to
products and services, requiring a change in
innovation, research and the development of
employee mindset from simply following
STI capabilities. For example, in Thailand, the
orders to being innovative. SCG hired
company SCG views investment in R&D as a
researchers and PhDs to influence the broader
vital aspect of its business expansion and long-
workforce, investing in labs and facilities for
term viability, and it has refocused its priorities
innovation and implementing cultural
toward STI. It has incorporated R&D
initiatives to encourage out-of-the-box
expenditure into its key performance
thinking. Leadership also adapted, promoting
indicators and employee performance
a facilitator model to spur employee creativity
reviews.
and independence.
Global talent exchange programmes: Firms
By implementing these strategies and
can provide opportunities for employees to
initiatives, large domestic firms contribute
participate in global talent exchange
significantly to human resource development,
programmes, where they can work with other
foster a culture of continuous learning and
branches or subsidiaries of the company
innovation and help to build a workforce with
around the world.
strong STI capabilities.
Corporate commitment for cultural
transformation: Developing human resources

Box 3.1. Academia-industry collaboration: Cambodia and India

In Cambodia, the SmartStart Unipreneur Learning Platform (ULP), developed by Smart Axiata, Impact
Hub Phnom Penh and 10 local universities, exemplifies private sector engagement in education. This
programme merges online and in-person learning with a focus on global startup methodologies and the
local context, aimed at enhancing entrepreneurial skills among Cambodian students. Supported by the
Capacity Building and Research Development Fund, the platform is part of a larger effort to blend
industry experience with academia, preparing students for the digital economy and cultivating
entrepreneurial leadership. Since its launch, the platform has attracted approximately 750 students,
highlighting the impact of collaborative models on educational enhancement and industry alignment.
In India, the 'Samsung Innovation Campus' programme, implemented across eight campuses, aims to
upskill 3,000 youths in cutting-edge technologies such as artificial intelligence, the Internet of things, big
data, coding and programming. This initiative includes intensive classroom training, capstone projects
and soft skills development to improve youth employability. The programme is offered in collaboration
with the Electronics Sector Skills Council of India (ESSCI) and other educational entities, contributing to
curriculum enhancement, research sponsorship and practical industry exposure for students, aligning
education with future workforce needs and fostering technological innovation.

Source: See https://news.samsung.com/in/samsung-innovation-campus-program-commences-ai-iot-big-data-and-

coding-reaffirms-samsungs-commitment-to-powering.

38
Chapter 3. Building human resources capacity through private sector engagement

Box 3.2. Corporate-founded universities specializing in STI: Thailand and Egypt

Several major companies around the world have significantly contributed to the establishment of new
universities, focusing on STI. This trend represents a strategic investment in higher education, aimed at
fostering talent and innovation in areas critical for technological and scientific progress.
A notable example in Thailand is PTT Group, a state-owned energy and petrochemical leader, which
founded the Vidyasirimedhi Institute of Science and Technology (VISTEC) in 2015. As a private,
postgraduate university in Wangchan Valley, Rayong, VISTEC concentrates on interdisciplinary fields such
as energy and environment, advanced materials, biotechnology and digital technology. The aim is to
generate significant research and encourage an innovative culture in Thailand and globally.
Substantial funding for VISTEC was part of the corporate social responsibility initiatives of PTT Group,
with an investment of THB 5,240 million (USD 153 million). The collaboration between VISTEC and PTT
Group involves joint research in relevant business areas, such as energy and petrochemicals. VISTEC also
serves as a talent resource for PTT Group, offering students and researchers industry training. This
partnership fosters innovation and facilitates technology transfer, aligning with Thailand's national
agenda to enhance its science and technology competencies.
In Egypt, Heliopolis University was established by the SEKEM group. As a private sector venture, it
reflects a significant commitment to higher education, particularly in sustainable and ecological
development. Founded in 2009, the university has 3,000 students across five faculties, showcases how
private enterprises can transform education. Heliopolis University integrates the principles of innovation,
creativity and social responsibility into its curriculum.
The focus on sustainable development is reflected in its comprehensive staff training and development
of research and community service centres, including an entrepreneurship centre promoting social
impact. This centre has successfully incubated about 200 green startups, supporting them technically and
financially. The university's collaboration with international agencies enhances its research and education
capabilities.

Sources: See www.nature.com/articles/d42473-019-00348-5; and https://futureoffood.org/insights/sekem/.

The success of corporate strategies and programmes aimed at building human resources with strong
capabilities in STI hinges on ensuring these efforts are strategic, collaborative and inclusive (table
3.1).

Table 3.1. Factors for successful corporate strategies to build STI human resources
Leadership The commitment of senior management to fostering an STI-centric culture is crucial.
commitment and Leadership must not only endorse these programmes but also actively participate in
support and advocate for continuous learning, innovation and skill development.

Clear strategic The initiatives must align with the company's strategic goals and objectives. This
alignment ensures that the skills and knowledge being developed are directly relevant to core
business areas and the future direction.

Customized Training and development programmes should be tailored to meet the diverse needs
learning pathways of employees, taking into account different learning styles, career stages and
professional goals. Customization increases engagement and the effectiveness of the
learning experience.

39
 Chapter 3. Building human resources capacity through private sector engagement

Continuous Regular assessment of the effectiveness of training and development programmes is

evaluation and essential. This includes evaluating their impact on employee performance and the
adaptation company's innovation output and adapting these programmes based on feedback and
changing industry demands

Integration with Linking the outcomes of STI initiatives to performance management systems, including
performance recognition and rewards, can significantly enhance motivation and participation.
management Employees are more likely to engage in learning and innovation when they see a direct
correlation to career advancement and rewards.

Collaborative Building partnerships with educational institutions, industry bodies and other
ecosystem organizations can enrich the learning ecosystem. These collaborations can provide
access to new research, thought leadership and practical experiences that are not
available in-house.

Supportive culture Fostering a company culture that values curiosity, experimentation and continuous
for innovation and improvement is vital. This includes providing safe spaces for failure, encouraging out-
learning of-the-box thinking and recognizing innovative ideas and efforts.

Access to resources Providing employees with the necessary tools, resources and time to engage in
and tools learning, research and innovation projects is critical. This includes access to advanced
technologies, research facilities and platforms for knowledge sharing and collaboration.

Diversity and Ensuring diversity in teams and leadership roles can enhance innovation and creativity.
inclusion Diverse perspectives contribute to a richer pool of ideas, solutions and approaches to
problem-solving.

Long-term Viewing STI human resource development as a long-term investment rather than a cost.
investment This perspective helps in allocating adequate resources and patience to see the
perspective tangible impacts of these initiatives on the company's growth and innovation
capabilities.

By focusing on these key success factors, corporations can effectively develop their STI human
resources, thereby enhancing their competitiveness and capacity for innovation in the rapidly
evolving global marketplace.

3.1.2. Key considerations for policies engaging the private sector to

build STI human resources
Given the societal benefits of having firms
invest in STI human resources, governments
could and should design and implement
policies that encourage firms to invest directly
in developing their human capital in STI.
Another indirect approach is to offer tax
incentives for R&D activities. These incentives,
such as R&D tax credits or deductions, could
do more than just alleviate the financial burden
of R&D; they could indirectly foster the
development of human resources in STI fields.
By reducing the costs associated with R&D,
these incentives enable firms to allocate more
resources towards hiring, training and
retaining skilled professionals who can drive
innovation.
This creates a more conducive environment for
firms to invest not only in technology and
research but also in the people who are
integral to these processes. The enhanced

40
Chapter 3. Building human resources capacity through private sector engagement

focus on R&D necessitates a workforce skilled
in STI, leading to a direct investment in human
capital development as firms seek to employ
and nurture people who contribute to
innovative projects.
Naturally, this premise relies on the
assumption that the savings are allocated
towards STI activities, rather than other
endeavours. To ensure this, Governments
could impose specific conditions on grants
and other forms of support, mandating that
companies utilize these financial savings to
enhance their STI human resources and
capabilities. This approach would help
guarantee that the funds are indeed used to
foster the growth and advancement of human
capital in science and technology. To that end,
Governments could also require firms to
report on their workforce development
initiatives, promoting transparency and
accountability.
When designing policies to support the
private sector in building STI human resources
in CLTV and other developing countries,
policymakers should consider several factors
as described in table 3.2.

Table 3.2. Key considerations for policies to support the private sector in building STI human
resources
Focus on local Policies should be designed to address the specific challenges and leverage
challenges and unique opportunities in the country. This includes focusing on industries and
opportunities technologies that can drive sustainable development and address local needs.

Basic education and skill Emphasize improving basic education quality, particularly in rural and
development underserved areas, and focus on skill development in science, technology,
engineering and mathematics. Vocational training and technical education
should be prioritized to build a skilled workforce.

Facilitating public- Encourage collaboration between private entities and public institutions, such as
private partnerships universities and local research centres, to ensure that education and training
programmes are relevant and meet the needs of the local economy.

Incentives for local and Offer incentives, such as tax benefits, subsidies, or simplified regulatory
foreign investment processes, to both local and international companies to invest in STI human
resources.

Developing a Create a regulatory environment that encourages investment and

supportive regulatory entrepreneurship in STI sectors, while protecting IP and ensuring ethical
framework practices.

Effective monitoring Implement robust mechanisms to monitor and evaluate STI human resource
and evaluation development policies to ensure they are effective, and make adjustments as
mechanisms necessary.

Leveraging global Engage with global trends and international collaboration to access new
trends and collaboration technologies, best practices and funding opportunities. Participation in
international STI networks can be beneficial.

Ensuring job market Align education and training programmes with the current and future needs of
alignment the job market, particularly focusing on sectors that have the potential for growth
and can drive economic development.

Emphasis on local R&D Promote R&D that addresses local issues and challenges, and support local
startups and enterprises engaged in innovation relevant to the country's needs.

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Promoting diversity and Ensure that STI opportunities are accessible to all, including women, minorities
accessibility and people from underprivileged backgrounds, to tap into the full potential of
the population.

By focusing on these areas, Governments can create policies that not only support the private sector
in developing STI human resources but also ensure that these efforts contribute significantly to
sustainable economic growth and development.

3.1.3. Policy instruments to support the private sector in building STI

human resources
This section contains examples of government policy instruments that can support the private sector
in building STI human resources.

3.1.3.a. Skills and

entrepreneurship
development grants
Governments can offer grants or subsidies to
support firms in establishing and maintaining
comprehensive employee training and
development programmes related to STI and
entrepreneurship. This support can help to
offset the costs of skills development
initiatives. Incentives, such as tax breaks or
grants, may be given to firms that invest in the
adoption of advanced technologies that
necessitate employee training and
development. Governments may support
lifelong learning by offering incentives to
employees and employers who participate in
education, training and mentorship
programmes. These incentives could be part
of a skill development fund, as in Thailand (box
3.3), or they could be direct tax breaks or
educational subsidies and grants, as in Japan
(box 3.4).

Box 3.3. Skills and entrepreneurship development grants: Thailand

The Skills Development Fund, established in Thailand under the Skill Development Promotion Act of 2002
and its amendment in 2014, is a key component of the nation's workforce development strategy. This
fund is integral to efforts to enhance human capital, especially in the context of a rapidly evolving global
economy and the challenges posed by an aging population.
Driven by a “train or pay” model, the fund mandates companies with more than 100 employees to either
provide skill development programmes for at least 50 per cent of their workforce or contribute to the
Skills Development Fund. This approach incentivizes training within organizations and generates
resources to support broader skill development initiatives across industries and sectors. The scope
includes pre-employment training, labour skill enhancement and training for occupational change,
catering to a wide array of occupational fields.
Privileges and benefits for training providers include tax exemptions, assistance in training and curriculum
development, and consultation services. For training providers operating at labour skill training centres,

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additional benefits include exemptions from import duty and VAT for training-related equipment and the
ability to deduct certain utility expenses for training purposes.
The inclusive approach of the Skills Development Fund is crucial. For instance, the collaboration between
the International Organization for Migration and the Department of Skills Development of the Ministry
of Labour demonstrates the commitment to inclusive training. These programmes aim to facilitate skill
development for migrant workers, recognizing their vital role in the Thai economy and ensuring their
access to training and reskilling opportunities, especially in the context of post-pandemic recovery.
The Skills Development Fund does not explicitly target STI activities in its core mandate. While it plays a
crucial role in workforce development, its primary focus is not tailored to STI sectors.

Source: See https://unevoc.unesco.org/countryprofiles/docs/UNESCO_Funding-of-Training_Thailand.pdf.

Box 3.4. Skills and entrepreneurship development grants: Japan

The Government of Japan has implemented a range of initiatives to support firms in cultivating STI capital
through employee training and development programmes. The Japan Science and Technology Agency
has a notable human resource development programme for STI professionals, which provides grants to
foster collaboration between industry and academia, enabling firms to enhance the skills of their
workforce in STI fields. Additionally, public-private partnerships in R&D human resource development
and the Society 5.0 initiative offer incentives and subsidies to encourage employee upskilling in emerging
technologies. These efforts contribute to national competitiveness in the global STI landscape by
ensuring a highly skilled workforce is capable of driving innovation and addressing societal challenges.
Furthermore, the Government supports space-related endeavours through grants and subsidies,
particularly in collaboration with the Japan Aerospace Exploration Agency. These initiatives enable large
corporations to invest in employee training and development in the aerospace and space technology
sectors, enhancing STI capabilities in space exploration and satellite technology projects. Overall, this
proactive approach to STI human capital development exemplifies the commitment of the Government
to support technological advancement and innovation.

Sources: See www.jst.go.jp/pf/platform/index.html; and https://global.jaxa.jp/activity/pr/jaxas/no077/08.html.

3.1.3.b. Workforce development

partnerships
Governments can promote collaboration in the Republic of Korea (box 3.6). These
between corporations and educational collaborations aim to create tailored training
institutions through workforce development programmes and curricula that closely match
partnerships, as in Thailand (box 3.5). the dynamic requirements of the industry.
Governments may foster partnerships among
companies, such as semiconductor companies

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 Chapter 3. Building human resources capacity through private sector engagement

Box 3.5. Workforce development partnerships: Thailand

The Higher Education for Industry Consortium in Thailand, initiated at Chulalongkorn University in 2018,
is designed to align academic programmes with the evolving requirements of industries. Funded partially
by the Programme Management Unit for Human Resources and Institutional Development, Research and
Innovation, this consortium facilitates a hands-on educational approach where students engage in
practical research assignments, mentored by industry experts. It fosters a multidisciplinary skill set and
encourages cooperative endeavours among universities and the corporate sector, making the
educational experience more relevant and applicable to real-world industry challenges.

Source: See https://www.hifi.sc.chula.ac.th/hi-fi-story/.

Box 3.6. Workforce development partnerships: Republic of Korea

The SEMI Korea Workforce Development Council, consisting of 16 companies, addresses the talent
shortage in the semiconductor industry in the Republic of Korea. Focused on building a robust talent
pipeline, the council orchestrates nearly 20 annual programmes to enhance the skills of college students
and junior engineers. In 2023, these initiatives attracted 8,200 participants, featuring specialized
programmes on diversity, equity and inclusion aimed at connecting the supply chain with skilled workers
through mentoring and practical training.
In addition, the Semiconductor Process Technology Hands-on Tutorial is highly sought after by university
students interested in semiconductor manufacturing careers. The programme offers practical experience
with semiconductor equipment, enhancing students' understanding of the industry. Most participants
(81 per cent), successfully start careers in the semiconductor sector after the programme.
The campus outreach programme, attended by 1,700 students, also offers a hybrid five-day session
where industry professionals from 15 companies share insights on semiconductor careers. The first three
days, conducted online, allowed widespread student participation across the country. The concluding
two days at COEX, Seoul, facilitated in-person mentoring, with companies guiding students they consider
for future employment. This programme bridges the gap between academic learning and industry
expectations.

Source: See www.semi.org/en/blogs/semi-news/semi-korea-2023-rich-set-of-workforce-programmes-cultivates-

talent-for-domestic-chipmakers.

3.1.3.c. Research and

development collaboration
incentives
Governments can encourage firms to
collaborate with academic institutions and
smaller companies by providing financial
incentives or grants for collaborative R&D
projects. This synergistic approach where
academic research enhances industry
practices and vice versa, leads to mutual
benefits and a stronger overall STI ecosystem.
Moreover, these collaborations underscore
the importance of public-private-academia
partnerships in driving innovation, addressing
complex challenges and preparing the
workforce for future demands. Examples of
collaboration between firms and educational
institutions in Thailand (box 3.7) reflect a
broader trend in many other countries.

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Box 3.7. Research and development collaboration incentives: Thailand

In Thailand, the strategic collaboration between firms and educational institutions, such as universities
and research institutes, plays a pivotal role in enhancing STI human resources and capabilities. This
partnership is exemplified through consortiums and programmes, such as the CCUS Consortium, SHA
Consortium and Future Food Consortium, comprising universities, research institutions, companies and
occasionally government agencies. Consortiums aim to tackle specific STI challenges in areas such as
carbon capture (CCUS), health and aging (SHA) and sustainable food production. By sharing expertise,
resources and facilities, these consortiums foster a collaborative environment that promotes innovative
R&D solutions, merging academic research with industry expertise to boost STI capacities across sectors.
The GENX programme, spearheaded by the Office of the Permanent Secretary, Ministry of Higher
Education, Science, Research and Innovation, focuses on developing in-demand industry skills, such as
coding and digital competencies. It encompasses comprehensive talent management, including
recruitment, training and career support, ensuring individuals are equipped with relevant skills and
receive continuous support in their professional development.

Sources: See www.pttplc.com/th/Media/News/Content-30346.aspx; and www.nxpo.or.th/th/8877/.

3.1.3.d. Apprenticeship and

internship support
Governments can sponsor an apprenticeship
and internship programme, as in the case of
the Founder Apprentice programme in
Thailand (box 3.8), or they can provide
financial incentives and wage subsidies to
businesses that provide apprenticeships and
internships, as in the Global Ready Talent
Programme in Singapore (box 3.9). Such
measures would make it more economically
feasible for companies to participate in
workforce development activities.

Box 3.8. Apprenticeship and Internship Support: Thailand

The Founder Apprentice programme, sponsored by the National Innovation Agency, is specifically
designed for young entrepreneurs aged 18–25, including students and recent graduates. The programme
offers an opportunity to work closely with more than 30 leading startup companies, fostering practical
skills and innovative thinking. It includes an immersive 11-week course named "STEAM4INNOVATOR",
which aims to transform participants' approach to innovation and entrepreneurship.
This initiative not only emphasizes hands-on experience but also nurtures networking by connecting
participants with founders, apprentices and alumni. The application process involves submitting a resume
and a video presentation of an innovative idea, ensuring that the participants are passionate and have a
vision for their entrepreneurial journey. The programme seeks to develop the entrepreneurial mindset
and skills of young individuals, preparing them for successful careers in the business world.

Source: See https://academy.nia.or.th/site/steam4innovators/.

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Box 3.9. Apprenticeship and internship support: Singapore

The Global Ready Talent Programme in Singapore is strategically crafted to assist enterprises in
cultivating and attracting local talent. This initiative encompasses the facilitation of internships for
students hailing from Institutes of Technical Education (ITE), polytechnics and universities. Financial aid
is extended to SMEs, covering a substantial 70 per cent of the monthly stipend for interns. The
Programme provides a minimum monthly stipend of SGD 800 (USD 600) for ITE and polytechnic students
and SGD 1,000 (USD 750) for university students.
Companies are expected to provide crucial support for interns, such as assigning a dedicated mentor or
supervisor for guidance throughout the internship. Internship structures should be well-defined, with a
clear job scope. In the context of overseas internships, companies are encouraged to ensure a minimum
duration of two continuous weeks in the international market. Alternatively, hybrid internships provide
flexibility by allowing a combination of local and physical overseas experience.
Enterprise Singapore in collaboration with the Institutes of Higher Learning financially supports the
monthly subsistence allowance and lump sum travel allowance for overseas internships. To be eligible,
companies must be incorporated in Singapore with a minimum of 30 per cent local shareholding.
Additionally, qualifying companies should demonstrate financial stability, robust human resources
processes and a commitment to talent development. For those offering overseas internships, existing
international operations, a positive business outlook and strong growth plans are crucial eligibility
criteria.

Source: See www.beglobalready.gov.sg/Internship.

3.1.3.e. Research
commercialization support
Research commercialization policies, while not
directly aimed at STI human resource
development, play a pivotal role in enhancing
the capabilities of STI personnel. These
policies instil an entrepreneurial spirit in the
research community by assigning ownership
and control of IP to researchers. This paradigm
shift leads to more market-oriented research
activities, effectively narrowing the gap
between theoretical research and its practical
applications. As a result, researchers gain skills
that are valuable and relevant to real-world
business and industry, thereby broadening
their professional competence.
In addition to fostering an entrepreneurial
mindset, these policies promote synergies
between academic institutions and the
industrial sector. By providing essential
resources for the commercialization of
research and offering training in areas such as
IP management and business strategy, they
create a more comprehensive and practical
learning environment. This approach not only
cultivates fertile ground for innovation within
academic circles but also plays a crucial role in
attracting and retaining talented individuals. A
key element of this approach is a legal
framework that allows research organizations
to own and manage their research results (box
3.10).

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Box 3.10. Research commercialization support: Thailand

The Thailand Research and Innovation Utilization Promotion (TRIUP) Act, also known as the Thai Bayh-
Dole Act, which came into effect on 7 May 2022, significantly impacts STI talent development in Thailand.
It empowers universities and research institutes to own and manage IP resulting from government-
funded research. This change represents a substantial shift from the previous system, where IP was often
retained by the funding agencies.

Source: See www.tilleke.com/insights/the-thai-bayh-dole-act-a-new-dawn-for-government-funded-research-in-

thailand/.

3.1.3.f. Research and innovation

grants
Capacity-building is often required as part of
grants offered to firms that invest in STI
initiatives, particularly those that have a
significant or strategic impact on workforce
development. In terms of translational
research, a case from a research funding
agency in Thailand is contained in box 3.11.

Box 3.11. Research and innovation grants: Thailand

The Programme Management Unit for National Competitiveness Enhancement (PMU-C) in Thailand, as a
research funding agency, is dedicated to leveraging technology and innovation for the advancement of
Thai industry competitiveness. The primary goal is to close the divide between research and
commercialization. The unit places a strong emphasis on facilitating translational research collaboratively
conducted by scientists and industry experts. This approach ensures that the technologies that are
developed align with industry requirements and specifications, and have practical applicability. PMU-C
allocates funding for infrastructure initiatives, including pilot plants, and for initiatives to scale up
laboratory processes to industrial levels. Capacity-building activities are required as a funding condition.

Source: See https://pmuc.or.th/en/about-2/.

3.2. Talent mobility programmes

In STI, talent mobility refers to the movement In certain contexts, talent mobility
of skilled professionals across different programmes target flows between academia
sectors, geographic locations, or and industry. Such programmes are designed
organizations. This concept emphasizes the to facilitate the movement of individuals,
flow of knowledge and skills, which can foster particularly researchers, scientists and
innovation and development. Talent mobility professionals, between the academic and
is critical in addressing skills gaps, promoting industrial sectors. The aim is to bridge the gap
knowledge exchange and enhancing between academia and industry, promote
collaboration in STI sectors. It is thus an collaboration and foster the exchange of
important aspect of global competitiveness knowledge, expertise and innovation.
and innovation, as well as STI policies.

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 Chapter 3. Building human resources capacity through private sector engagement

Talent mobility programmes encourage the
transfer of academic knowledge, cutting-edge
research findings and scientific expertise into
practical applications in industry, allowing
companies to stay at the forefront of
technological advancements.
These programmes may assist in skill
development by providing opportunities for
individuals to acquire real-world skills,
industry-specific knowledge and practical
experience that can enhance their academic or
professional careers. Participants acquire new
skills and knowledge that make them more
versatile and adaptable, increasing their
employability.
In addition, these programmes also promote
collaboration between universities, research
institutions and private companies, fostering a
culture of interdisciplinary cooperation.
Collaborative projects often lead to the
development of innovative products,
processes, or solutions that can benefit both
academia and industry. Individuals involved in
talent mobility programmes can build diverse
professional networks and gain experience
that enhances their career prospects.
Participants from academia often include
professors, researchers and students from
universities and research institutions, and they
participate in these programmes to gain
industry experience and insights. Participants
from industry are private sector employees,
including scientists, engineers and managers,
and they participate in these programmes to
stay updated on the latest research.
In summary, talent mobility programmes
between academia and industry facilitate
collaboration, knowledge transfer and skill
development. They foster innovation, enhance
career opportunities and contribute to the
growth of STI capabilities.

3.2.1. Key considerations for talent mobility policies

Developing policies that promote talent mobility between academia and industry requires a
multifaceted approach that addresses both systemic and specific challenges and key considerations
contained in table 3.3.

Table 3.3. Key considerations for talent mobility policies

Research • Enhancing research infrastructure in universities to facilitate cutting-edge R&D that
infrastructure is relevant to industry needs
and funding • Increasing funding for collaborative research projects between academia and
industry, including grants, tax incentives and public-private partnerships
Regulatory • Establishing clear and fair IP regulations that encourage collaboration between
environment academia and industry while protecting the interests of all parties
• Adapting labour laws to support flexible work arrangements, allowing researchers
and professionals to move between academia and industry without losing
employment benefits or job security
Education and • Aligning higher education curricula with industry needs, focusing on practical skills,
training entrepreneurship and innovation
• Promoting continuous education and upskilling for professionals in both academia
and industry to keep pace with technological advancements
Collaboration • Creating platforms and forums for regular interaction between academia and
and networking industry to discuss research needs, project collaborations and knowledge exchange
• Supporting technology incubators and accelerators within or associated with
academic institutions to foster startups and spin-offs from academic research

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Talent • Developing clear career pathways that allow for the seamless transition of talent
development between academia and industry, including dual appointments and industry
and retention sabbaticals for academics
• Recognizing and rewarding academics who contribute to industry innovation and
professionals who contribute to academic advancements
Cultural shift • Promoting entrepreneurial culture within academic institutions to motivate
researchers to pursue practical applications of their work
• Reducing any existing stigma associated with moving between academia and
industry
International • Facilitating participation in international research networks and partnerships
collaboration • Establishing international talent mobility programmes to allow researchers and
industry professionals to gain global experience and bring back new ideas and skills
Monitoring and • Regularly assessing the impact of talent mobility policies and programmes
evaluation • Implementing mechanisms to gather feedback from academia and industry on the
challenges and opportunities in talent mobility to refine policies and initiatives

By considering these factors, policymakers can develop more effective STI policies that not only
promote talent mobility between academia and industry but also contribute to the overall innovation
ecosystem and economic development.

3.2.2. Policy instruments for talent mobility

The following section outlines specific aspects
of policy instruments that CLTV and other
developing countries should consider in
developing talent mobility programmes. The
first part explores the issues of brain drain and
brain circulation and policy options that
Governments have adopted to address them.
This is followed by discussion on types of
talent mobility programmes that aim to foster
the movement of talent between academia
and industry, including research secondments,
internships and work-study programmes, and
joint research centres, to name a few.

3.2.2.a. Promotion of brain

circulation and
international talent
mobility
A frequent challenge in STI endeavours in foreign workers. This strategy aids in
developing countries is the scarcity of skilled transferring knowledge and enhancing the skill
professionals in specific sectors. A key factor set of the local workforce.
contributing to this situation is “brain drain”, a
Recent trends indicate a shift from trying to
phenomenon of highly skilled individuals
counteract brain drain to promoting “brain
relocating abroad to pursue better career
circulation”. Brain drain was initially perceived
opportunities and higher living standards. In
as a detrimental loss, especially for developing
response, some Governments have initiated
countries, but the emigration of skilled
international talent mobility programmes,
professionals can contribute to a broader,
enabling large companies to recruit skilled

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dynamic global talent exchange process,
thanks to increased globalization and mobility.
Brain circulation values the advantages of
strategic exchanges that contributes to the
transfer of advanced technologies, innovative
methodologies and global business networks,
which are crucial for STI growth. Working
abroad equips individuals with new skills,
knowledge and connections that are beneficial
when they return home.
Governments are now adapting policies to
encourage expatriates to return, participate in
remote collaborations, or engage in short-
term projects. These reforms aim to improve
working conditions, provide research
incentives and promote international
partnerships. The Governments of India and
China are exemplary in this respect, having
developed specific initiatives and institutions
to leverage their overseas talent.
Furthermore, brain circulation aligns with the
evolving demands of the global economy,
which is increasingly reliant on knowledge and
innovation. To remain competitive, countries
must be integrated into global knowledge
networks, and brain circulation offers an
effective means for such integration. Brain
circulation reframes the departure of talent
from a loss to an opportunity for creating a
more cooperative and globally connected STI
ecosystems. This change in perspective
denotes a deeper understanding of global
talent mobility, focusing on mutual
advantages, extensive networking and the
strategic involvement of the diaspora in
national development efforts. This shift is
reflected in recent policies of the
Governments of Viet Nam (box 3.12) and the
Republic of Korea (box 3.13).
To effectively foster brain circulation and
enhance global talent exchange, the following
specific policy measures can be proposed:
Bilateral agreements: Establish bilateral
agreements and partnerships with other
countries to facilitate the mutual exchange of
professionals, researchers and academics.
Flexible immigration policies: Implement
flexible immigration policies, offering special
visas or permits for skilled professionals to
participate in short-term projects or
collaborations.
International collaborative R&D: Encourage
and fund international collaborative research
and development projects to build global
research networks and share knowledge and
resources.
Dual appointments: Offer dual appointments
or sabbatical opportunities in both domestic
and foreign institutions, allowing professionals
to contribute to multiple countries.
Alumni and diaspora networks: Maintain
robust networks of alumni and diaspora
communities to facilitate ongoing
connections, mentorships and collaboration
opportunities with nationals abroad.
Continuous education: Provide continuous
education and professional development
opportunities, including access to online
courses and international conferences.
Cultural and social integration: Implement
cultural and social integration programmes to
assist returnees in adapting to their home
country, including support for families and
community engagement.
Recognition of international experience:
Recognize and utilize international experience
in the domestic job market to ensure the
effective application of skills and knowledge
gained abroad.
Incentives for returnees: Offer incentives such
as tax benefits, housing allowances, or startup
funding to encourage returnees and
expatriates to contribute to the domestic
economy.
These measures collectively aim to create a
dynamic environment that promotes global
integration and innovation, benefiting both
the home country and the international
community.
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Box 3.12. Brain circulation: Viet Nam

To reverse brain drain and attract overseas Vietnamese (Viet Kieu) back to Viet Nam, the Government
has implemented several strategies. Decisions and decrees provide incentives for expatriates with high
qualifications. These include financial rewards, support for housing in city centres, administrative
assistance for legal matters and appointments to key positions for those with doctoral degrees or
academic titles. In 2004, a resolution was passed recognizing the Viet Kieu as an inseparable part of the
Vietnamese community. Additionally, visa requirements were relaxed in 2007, making it easier for Viet
Kieu and their families to return, even if they hold dual nationality. The Government introduced visa
exemptions for overseas Vietnamese expatriates, allowing them to stay in Viet Nam for up to 90 days.
Since July 1, 2009, they have the option to retain their Vietnamese citizenship, allowing for quasi-dual
citizenship in countries that permit it. The Government also treats Viet Kieu as domestic investors and
real estate buyers, exempting them from certain taxes and import duties. These measures aim to
leverage the skills, experience and business contacts of the Viet Kieu to boost the Vietnamese economy,
particularly in sectors such as technology startups, where they have been instrumental.

The Government of Viet Nam continues to encourage more Viet Kieu to return as part of its Industry 4.0
strategy. Plans for a mini-Silicon Valley hub in Hanoi are underway, which could attract even more talent.
The Viet Kieu are increasingly recognized as significant drivers of the economic boom in Viet Nam,
contributing greatly to the country's evolving market and technology landscape.

Source: ASEAN Today, 2019, A brain drain in reverse: Vietnam’s economy thrives as top talents return. Available at
www.aseantoday.com/2019/03/a-brain-drain-in-reverse-vietnams-economy-thrives-as-top-talents-return/.

Box 3.13. Brain circulation: Republic of Korea

The Republic of Korea has implemented targeted strategies to attract and retain international talent and
establish itself as a global hub for innovation and research. A cornerstone of these efforts is the World
Class University Project initiated in 2008, aimed at attracting top-tier international researchers to bolster
the nation's academic and research stature.
Domestic institutions have attracted 'boomerang' researchers—those who pursue postdoctoral research
abroad and then return to the country. These individuals often bring with them experiences and
connections from international networks, leading to more opportunities for international collaboration
and impactful research.
Central to the brain circulation strategy in the Republic of Korea is the active role of the Government in
funding global research collaboration and providing attractive incentives for returning professionals,
including competitive remuneration, substantial research grants and access to advanced facilities. These
incentives, coupled with significant R&D investments, have led to the creation of innovation hubs and
technology parks that attract both domestic and international talent.
Flexible immigration policies simplify visa issuance and offer residency options for highly skilled
professionals, enhancing the country's appeal as a destination for global talent. The commitment to
fostering international academic exchange is evident in its numerous scholarship and exchange
programmes for foreign students and researchers. The Government has prioritized cultural integration,
offering comprehensive support to help expatriates and returnees adapt, thus enriching the academic
and professional ecosystem.

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Furthermore, extensive diaspora networks play a crucial role in national development, promoting
knowledge transfer and investment. The provision of dual career opportunities enables professionals to
maintain global engagements while contributing locally, epitomizing the sustainable model of brain
circulation.

Sources: Springer Nature Group, 2020, South Korea becomes global leader in innovation through investment in
research, systemic reform and talent mobility. Available at
https://group.springernature.com/gp/group/media/press-releases/south-korea-becomes-global-leader-in-
innovation-through-investme/18016118; Chris Woolston, 2020, South Korean institutions lure global talent. Nature
Index, 27 May. Available at www.nature.com/articles/d41586-020-01467-6; Gi-Wook Shin and Rennie Moon, 2018,
From Brain Drain to Brain Circulation and Linkage. Shorenstein Asia-Pacific Research Center Working Paper,
Stanford University. Available at https://aparc.fsi.stanford.edu/publication/brain-drain-brain-circulation-and-linkage.

3.2.2.b. Research secondments

Government policies and programmes can
also encourage researchers from academia to
spend time working in an industrial setting,
conducting research or providing their
expertise to address specific industry
challenges.
The talent mobility programme of the
Government of Thailand provides incentives
to support such experience (box 3.14).
Meanwhile, university-industry partnerships
could also include research secondments, as in
the case of the National University of
Singapore (box 3.15).

Box 3.14. Research secondments: Thailand

The talent mobility programme in Thailand was launched to catalyse innovation and economic growth by
connecting academic research with the private sector. This was crucial for the transition from an
agriculture-dominated, export-oriented economy to one fuelled by high-tech innovation and skilled
labour. The programme enables university experts and researchers to temporarily join private companies,
thereby injecting advanced knowledge and research skills into the private sector.

Originating from the need to escape the middle-income trap and foster an innovation-led economy, this
programme sought to boost R&D investment and to balance the R&D personnel distribution between
public institutions and the private sector (72 per cent and 28 per cent, respectively, in 2014).

The programme's implementation involves establishing regulations within universities and research
institutes, setting up ‘clearing houses’ to link industry with academia and creating skill enhancement
training programmes. It is financially backed by government bodies such as the National Science
Technology and Innovation Policy Office and the Higher Education Commission (NXPO), providing
research funds and compensation. The programme has evolved from experimental phases to wider
university networks and collaborative funding.

The programme has expanded to include financial incentives, training and policy support to promote
talent and knowledge exchange. University clearing houses are pivotal in coordinating these efforts and
ensuring mutual benefits for academia and the private sector. Its success lies in its adaptability to
changing industrial needs and regional variations.

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Nevertheless, there were challenges to implementing the programme, such as regulatory barriers and
cultural differences between academia and industry. Effective collaboration frameworks had to be
created.

The initiative has now expanded to Association of Southeast Asian Nations (ASEAN), as the region
pursues STI-based economic development and regional integration. The ASEAN Talent Mobility
Programme, in collaboration with Thailand’s NXPO and the Programme Management Unit for Brain
Power, aims to synchronize resources across ASEAN countries for human resource development in
innovative sectors. Strategic challenges include competition for scarce talent, linguistic diversity and
resource constraints.

Source: Poolsak Koseeyaporn et al., 2017, An empirical study of policy implementation of Thailand talent mobility
programme. STI Policy and Management Journal, vol. 2, No. 2, pp. 95–110.

Box 3.15. Research secondments: Singapore

The National University of Singapore (NUS) has been proactive in establishing partnerships with the
biotech industry to foster a vibrant environment for research and innovation. These collaborations are
instrumental in allowing researchers to apply their expertise in practical settings, particularly in fields
such as drug discovery, biomedical engineering and genomics.
One key initiative is the Singapore Consortium for Synthetic Biology (SINERGY), supported by the
National Research Foundation. SINERGY aims to promote use-inspired research and technology
translation in synthetic biology. This includes manpower training and technology awareness to bridge
the gap between academia, industry and government agencies. The consortium leverages ongoing
research projects, seeking translational research opportunities, and offers a platform for skills training
and research collaboration between industry and academia. Renowned experts in synthetic biology are
recruited to work directly with companies in the consortium.
The entrepreneurial arm of NUS, known as NUS Enterprise, plays a crucial role in facilitating industry
collaborations. It has been involved in initiatives and partnerships with a range of industries, including
biotechnology. These initiatives aim to nurture talent, create opportunities for idea exchange and
accelerate ventures, thereby contributing to a dynamic innovation ecosystem.

Sources: See www.nrf.gov.sg/; and www.dbs.nus.edu.sg/about-us/an-overview/.

3.2.2.c. Joint research projects

and centres
Governments can promote collaborative
research projects that involve both academia
and industry partners in solving complex
problems or developing new technologies as
well as joint research centres for academia and
industry. Such research collaboration could be
located at an STI park as in Thailand (box 3.16)
or at university research centres as in Japan
(box 3.17).

53
 Chapter 3. Building human resources capacity through private sector engagement

Box 3.16. Joint research projects and centres: Thailand

Noticeable strides have been made in Thailand in fostering collaboration between academia, industry
and Government in STI. This effort is centred around the Thailand Science Park and the National Science
and Technology Development Agency (NSTDA).

The Thailand Science Park is a critical hub for collaboration where private sector companies, government
agencies and leading universities come together for joint research projects, as well as research
outsourcing and technology transfer initiatives. NSTDA plays a crucial role in encouraging R&D
collaboration and knowledge sharing between government resources and the private sector. The park
houses four national R&D centres equipped with state-of-the-art laboratories and equipment. This park
is not just a physical space but a network of expertise and resources, facilitating activities such as research
outsourcing and technology transfer. By providing shared physical space, it enables these diverse entities
to share knowledge, resources and expertise, leading to innovative solutions and advancements.

The NSTDA plays an instrumental role in this ecosystem. It serves as a bridge between government
resources and private sector ambitions, particularly in areas of R&D. It encourages not just collaboration
but also knowledge sharing, ensuring that the insights and advancements made in government labs are
accessible to private enterprises and academic researchers.

The Government has also established regional science parks in strategic locations. These are affiliated
with prominent universities in different parts of Thailand, ensuring a wide geographical reach.
Specifically, regional science parks are connected with Chiang Mai University in the north, Khon Kaen
University in the north-east and Prince of Songkla University in the south. The aim is to decentralize R&D
activities while tapping into local expertise and resources, further enhancing the collaborative
environment.

Source: Tinnakorn Phongthiya et al., 2022. Innovation intermediaries for university-industry R&D collaboration:
evidence from science parks in Thailand. The Journal of Technology Transfer, vol. 47, No. 6, pp. 1885–1920.

Box 3.17. Joint research projects and centres: Japan

Japan has several notable examples of joint research centres between academia and industry across
fields of study and technological development. For example, the Department of Regulation of
Neurocognitive Disorders at the Kyoto University Graduate School of Medicine has partnered with
United States bio ventures, such as Cyn-K and VLP Therapeutics. This collaboration focuses on
developing vaccines targeting pathogenesis proteins associated with neurocognitive disorders, such as
Alzheimer’s and Parkinson’s diseases.

The Hokkaido University Frontier Research Center for Advanced Material and Life Science aims to
enhance industry-academia collaboration. It focuses on creating new industries through technological
innovation, particularly in life sciences and advanced materials. The centre includes an academia-industry
collaboration unit, a global collaboration unit and an advanced facility collaboration unit. Notably, they
have partnered with the Nitto Denko corporation to establish a laboratory at the university, promoting
large-scale joint research projects.

The National Agriculture and Food Research Organization (NARO) actively pursues collaborations across
industry, academia and government sectors, especially in agriculture and food industries. These
collaborations include joint research with universities and private companies, focusing on the

54
Chapter 3. Building human resources capacity through private sector engagement

development of advanced technology and promoting practical applications and commercialization of

research findings.

The Osaka University Photonics Center fosters industry-academia-government collaboration. It

emphasizes the development of photonics-based technologies and interdisciplinary research areas. The
centre is committed to educational programmes aimed at developing human resources for next-
generation industries. The university set up a joint research chair using funds provided by an outside
company or other institution. Research Alliance Laboratories provide a common place where enterprises
and university researchers can utilize mutual research information, technologies, human resources and
facilities.

Sources: See https://life.sci.hokudai.ac.jp/en/fa/well-developed-industry-academia-collaboration;

www.naro.go.jp/english/research-programs/industry-academia-government/index.html; and www.eng.osaka-
u.ac.jp/en/research/research/.

3.2.2.d. Research fellowships

Governments can support research fellowship
programmes that fund researchers to spend
time in industry or academia. This can include
lecturer exchange programmes in which
academics or practitioners temporarily switch
roles and become guest lecturers in industry
or university settings. The Republic of Korea
provides a variety of fellowships that reflect
this approach (box 3.18).

Box 3.18. Research fellowships: Republic of Korea

The Government of the Republic of Korea supports research fellowship programmes that facilitate
collaboration between industry and academia. The Brain Pool Fellowship, managed by the National
Research Foundation in conjunction with the Ministry of Science and ICT, aims to enhance R&D in the
Republic of Korea by inviting outstanding overseas scientists to join domestic research institutions. This
initiative supports joint research activities across R&D fields, contributing to the internationalization of
the domestic research environment, securing new growth engines, nurturing new researchers and
establishing global networks. The programme offers both short-term (6–12 months) and long-term (up
to three years) research opportunities. The programme is open to all fields in science and technology,
with a preference for 12 national strategic technology fields, including semiconductor and display,
secondary cells, leading-edge mobility and artificial intelligence.
Similarly, the Korea Research Fellowship includes opportunities for outstanding postdoctoral
researchers, both foreign nationals and Korean nationals residing overseas, to engage in research at host
institutions in the country. This includes corporate research institutes affiliated with the Korea Industrial
Technology Association, offering a unique chance for researchers who have obtained their doctoral
degrees within the past five years to contribute to corporate R&D efforts. The programme encompasses
government-supported research institutes, national and public research institutes, universities and
university-affiliated research institutes, as well as nonprofit research institutes.

Source: See https://kusco.org/project/koreas-invitation-programs-for-outstanding-overseas-researchers-2/.

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 Chapter 3. Building human resources capacity through private sector engagement

3.3. Reflection questions

The following reflection questions can help models from other countries be adapted and
policymakers to design comprehensive and integrated into local policy frameworks to
effective policy instruments that not only enhance the effectiveness of STI human
promote private-sector investment in building resource development initiatives?
STI human resources and talent mobility
Entrepreneurship and innovation culture:
between academia and industry but also
What initiatives can be introduced to cultivate
contribute to the broader goals of innovation,
an entrepreneurship and innovation culture
competitiveness and overall economic
within firms, encouraging them to invest in
development.
their employees’ the continuous learning and
Alignment with national priorities: How can development?
your policy instruments be designed to align
Long-term sustainability: Considering the
with national STI priorities and goals, ensuring
long-term sustainability of policies, how can
that they contribute to the broader objectives
continuous funding and support mechanisms
of sustainable development and economic
be ensured, particularly in the face of
growth?
economic fluctuations and changing
Inclusivity and diversity: In what ways can government priorities?
policies ensure inclusivity and diversity in STI
Role of SMEs: Given the significant role of
human resource development, particularly
SMEs in the economy, what specific policy
focusing on gender equality, inclusion of
measures can be tailored to support SMEs in
minority groups and equitable access for
developing STI human resources, considering
individuals from underserved regions?
their limited resources compared to larger
Public-private collaboration: What strategies corporations?
can be implemented to foster more effective
Integration with broader economic policies:
collaborations between the private sector and
How can STI human resource development
public institutions to ensure that education
policies be integrated with broader economic
and training programmes are closely aligned
and industrial policies to ensure a cohesive
with the evolving needs of industry?
approach to building a resilient and innovative
Adaptation to technological changes: As economy?
technology evolves rapidly, how can policies
In addition, policymakers may consider the
remain adaptable to ensure that workforce
following questions when designing talent
skills are up to date with the latest STI
mobility programmes.
advancements, thereby maintaining the
relevance and competitiveness of the Alignment with national STI priorities: How do
workforce? the proposed programmes align with national
STI priorities and objectives? Are there specific
Measurement of success: What metrics should
sectors that should be targeted due to their
be established to measure the success and
strategic importance to the country's
impact of policies aimed at supporting the
economic and technological advancement?
private sector in STI human resource
development? Infrastructure and support systems: What type
of infrastructure and support systems (e.g.,
Leveraging international best practices: How
research facilities, funding mechanisms) are
can international best practices and successful
necessary to facilitate effective talent mobility

56
Chapter 3. Building human resources capacity through private sector engagement
between academia and industry? How can
these be developed or enhanced?
Incentives for participation: What incentives
can be provided to encourage participation
from both academia and industry? This could
include financial incentives, career
advancement opportunities, recognition
programmes and support for entrepreneurial
ventures.
Regulatory and legal frameworks: Are there
existing regulatory or legal barriers that could
hinder talent mobility? How can these be
addressed to ensure that IP is protected and
labour laws support flexible work
arrangements?
Skill development and knowledge transfer:
How can talent mobility programmes be
designed to maximize skill development and
knowledge transfer? What mechanisms can be
put in place to ensure that the knowledge and
skills acquired through these programmes are
effectively disseminated and utilized?
Collaboration and networking: How can the
programmes facilitate and encourage
collaboration and networking among
participants? What platforms or forums can be
established to promote regular interaction and
3.4. Conclusions
The engagement of the private sector in
developing STI human resources is pivotal in
developing countries. Large corporations play
a crucial role in building a skilled workforce,
particularly in STI fields. They do this by
creating training programmes and fostering
talent exchange between academia and
industry, ensuring industry-relevant skills and
knowledge development.
Partnerships between firms and educational
institutions are essential to co-create
knowledge and enhance STI capacities. These
57
exchange of ideas between academia and
industry?
International collaboration: In what ways can
international collaboration be incorporated
into talent mobility programmes to expose
participants to best practices and advanced
technologies? How can these international
experiences be leveraged to enhance the local
ecosystem?
Monitoring and evaluation: What metrics and
indicators should be used to evaluate the
success and impact of talent mobility
programmes? How can feedback from
participants and stakeholders be
systematically collected and used to
continuously improve the programmes?
Cultural and social integration: How can
policies ensure that talent mobility
programmes address cultural and social
integration, particularly for international
participants or those moving between
significantly different work environments?
Sustainability and long-term impact: What
strategies can be implemented to ensure that
these programmes continue to deliver
benefits over the long term and adapt to
changing technological and economic
landscapes?
collaborations offer practical training and can
align academic research with market needs,
but challenges include cultural differences and
reaching agreement on objectives.
However, there are limitation in overreliance
on large corporations for STI capacity-building
in developing countries. Corporations often
focus on R&D that aligns with their immediate
business interests, potentially neglecting
broader scientific areas vital for long-term
innovation. This approach can also result in
homogenous research methods and a focus
 Chapter 3. Building human resources capacity through private sector engagement

on IP protection, limiting knowledge sharing
and collaboration. Additionally, corporate risk
aversion may underinvest in speculative or
long-term research projects. Therefore, a
balanced approach involving public and
private sectors, academia and civil society is
crucial for a robust and diverse STI ecosystem,
driving sustainable and equitable growth and
innovation in developing countries.

58
Chapter 4. Strategic considerations
4. Strategic considerations
This concluding chapter contains a discussion
of three broad considerations when designing
national-level strategies to build a robust and
dynamic STI ecosystem and engage the
private sector. First, top-down policies alone
cannot build innovation ecosystems. Second,
4.1. An innovation ecosystem cannot be built by top-
down policies alone
A robust national innovation system cannot be
created just by establishing a solid policy
framework based on best practices from more
mature ecosystems in developed economies.
It cannot be assumed that once the right
policies are in place, the components of an
innovation ecosystem, such as research
institutions, businesses and investors, will align
themselves accordingly, leading to a
flourishing environment for innovation.
Building effective innovation ecosystems often
requires that policymakers adopt a more
hands-on and context-specific implementation
approach, particularly in terms of building
engagement and eventually partnerships with
key stakeholders, particularly the private
sector. Merely establishing policies based on
strategic and long-term goals is not sufficient;
there is a need for active involvement and
continuous dialogue with those directly
engaged in innovation activities. This means
adjusting strategies and policy measures in an
agile and responsive manner to the evolving
needs and challenges of the ecosystem.
Another fundamental element of a thriving STI
ecosystem is trust, as it is an indispensable
element of any partnership, particularly in
uncertain and risky endeavours such as R&D
and startups. Trust is indispensable in
fostering a collaborative environment, as trust
59
networks are key to STI policy design,
planning and implementation. Third,
intermediary organizations have a critical role.
These considerations are particularly relevant
when seeking to scale up startups and
investments in STI human resources.
enables partners from different fields and
sectors to work together effectively. Without
trust, open communication and the sharing of
ideas, resources and expertise would not be
possible. Innovation necessarily involves
taking risks, and trust in partners' expertise
and integrity enables individuals and
organizations to take these risks.
The process of building trust naturally
develops from shared experiences, mutual
respect and consistent display of reliability and
integrity. Imposing trust from the top down
can be counterproductive, as it does not allow
for essential personal connections and organic
growth that true trust needs, and it can come
across as obligatory.
Therefore, building a robust and responsive
STI ecosystem is not just a bureaucratic
process but a dynamic one that requires
constant adaptation, fine-tuning and
relationships of trust among partners.
Policymakers need to be flexible, willing to
learn from ecosystem participants and ready
to modify policies as new insights and
circumstances arise. Agile policy development
is crucial for nurturing a thriving innovation
environment where businesses, researchers
and investors can effectively collaborate and
drive forward new ideas and technologies.
Chapter 4. Strategic considerations
4.2. Networks as an implementation strategy
Networks are becoming a crucial strategy for
STI policy design, planning and
implementation within CLTV and other
developing countries. These networks,
comprising diverse stakeholders, such as
government agencies, private firms, non-
profits and industry and community groups,
navigate the complexities of modern
governance more effectively than traditional
hierarchical models. They bring unique
resources, expertise and perspectives,
enabling action and enriching policy design
and implementation processes.
Networks facilitate collaboration and
partnership, essential for policies requiring
cross-sectoral cooperation or spanning
multiple government levels. They also
integrate resources and expertise from various
sectors. Their adaptability is key in dynamic
sectors such as STI, allowing for rapid resource
reallocation, strategy adjustments and
innovation in response to changing scenarios.
Networks can also improve communication
and information sharing, leading to more
informed decision-making and effective
execution. They can encourage local
involvement, aligning policies with local needs
and conditions and effectively bridging
administrative and jurisdictional gaps.
However, STI policymakers in CLTV and other
developing countries often use network-based
approaches informally and without a
systematic process, generally stopping at
policy design and formulation stages.
Integrating networks into STI policy
development and implementation requires
designing every aspect of the network with
intention—from governance structures to
communication strategies. A comprehensive,
Chapter 1.
systematic approach encompasses several key
steps:
1. Clearly defining policy goals and
objectives, pinpointing challenges where
network collaboration is most effective and
ensuring alignment with national goals to
enhance the strategic focus of network
activities.
2. Identifying potential network members
through a stakeholder analysis that
ascertain potential roles, responsibilities,
influence and resources, while fostering
trust and open-mindedness among all
stakeholders.
3. Establishing a collaboration framework
where roles, responsibilities and
governance structures – including
leadership roles and decision-making
processes – are clearly defined, leveraging
both hierarchical respect for authority and
horizontal dynamics to encourage
collaboration.
4. Building trust and relationships is achieved
through dialogue, meetings and open
communication norms, emphasizing the
importance of being clear about objectives
and limitations while remaining open to
collaboration.
5. Developing a strategic plan and then an
operational plan – detailing actions,
timelines and resource allocations as well
as coordination mechanisms, while being
adaptable and responsive to new insights
and operational challenges – and aligning
the plans with policy goals and leveraging
network strengths.
6. Sustaining engagement among network
members through regular meetings and
60
Chapter 1.
updates. Insights and outcomes from the
network should inform policy revisions.
Throughout this process, it is essential to
address conflicts of interest, ensure
transparency, foster inclusivity and be
mindful of power dynamics for successful
network implementation as an STI policy
strategy.
7. Utilizing neutral platforms for multi-
stakeholder engagement to facilitate
collaboration on global challenges with a
regional focus, providing a trusted space
for dialogue and partnership.
8. Acting as a mediator to facilitate
understanding and negotiation between
multiple parties within a network,
enhancing mutual understanding and
cooperation without direct confrontation
and balancing diverse stakeholder
interests in policy communication.
9. Recognizing the different paces of
collaboration, accommodating the varying
speeds at which different stakeholders
operate and aligning these to enhance
collaboration efficiency.
10. Continuous monitoring and evaluation to
assess the impact of the network on
achieving policy goals to adapt strategies
to new challenges and opportunities,
including the iterative improvement of
tools and methodologies based on
evidence and learning from diverse fields.
Despite its advantages, network-oriented
implementation faces challenges, such as
potential conflicts of interest, coordination
difficulties, underrepresentation of weaker
61
Chapter 4. Strategic considerations
groups and the management of diverse
groups. While networks and relationships
could be utilized to gain access and build trust
among stakeholders, successful
implementation still requires a well-defined
plan and strategy. The success of networks in
policymaking depends on the type of policy,
stakeholder involvement and quality of inter-
organizational relationships, making it a
dynamic but intricate component of STI
policymaking in the context of developing
countries today.
Thoughtful communication is paramount in
building and maintaining networks. Mutual
listening and reciprocal engagement are
fundamental to building trust, ensuring that all
voices are heard and considered in the
decision-making process. This fosters a
collaborative environment where trust is
established and partnerships are
strengthened, ultimately leading to more
successful network outcomes.
Effective leadership within sector groups and
government endorsement are critical for the
success of business networks. The
Government's role in providing legitimacy and
facilitating connections between the private
sector and academia is indispensable. The
Government must act swiftly to appoint
knowledgeable and empowered individuals
who can bridge the gap between fast-moving
business initiatives and the more deliberate
pace of government processes. This involves
not only recognizing the importance of
networks but also actively supporting their
development through policies and frameworks
that encourage cross-sector collaboration.
Chapter 4. Strategic considerations
4.3. Intermediaries as essential actors
Intermediary organizations play a variety of
roles in STI policy design, planning and
implementation, particularly as policymakers
embrace network approaches. Regarding
startup and STI human resource development,
there are at least three types of intermediary
organizations:
1. Government intermediaries: These
organizations are government-affiliated or
sponsored, and they play a role in
promoting and facilitating
development of startups and STI human
resources. Examples include DEPA and
PMUs in Thailand. In addition to their roles
in policy advocacy and formulation and in
providing research funding and resources
for STI, these government agencies
increasingly provide consulting,
investment and other supporting services,
as well as facilitating STI networks.
2. Business associations/chambers: These
are non-profit, membership-based
organizations representing the interests of
businesses in a specific sector. For
example, Thai Startup is an association
focused on the startup ecosystem in
Thailand, while LAO ICT promotes the Lao
information and communications
technology sector. These organizations
often offer networking opportunities,
industry insights, advocacy and resources
to their members.
3. Privately run incubators and ecosystem
builders: These entities support early-
stage startups and entrepreneurs. They
provide a range of services, such as
mentoring, office space, capital and
networking opportunities. Incubators may
focus on building a broader
entrepreneurial ecosystem by connecting
startups with investors, industry experts
and potential customers.
Chapter 1.
Each of these categories of intermediaries
plays a unique and crucial role in fostering
innovation and entrepreneurship. Government
intermediaries often provide the regulatory
support and broad-scale initiatives,
associations/chambers represent and
advocate for industry members, while private
incubators and ecosystem builders offer
direct, hands-on support to startups and
entrepreneurs. Intermediaries, which in
essence are networks with varying types of
the
organization and degrees of
institutionalization, foster STI ecosystems at
the local, national and regional levels.
Intermediaries play a critical role in promoting
startups, providing access to essential
resources and funding, connecting them with
investors and guiding them in securing
investments and grants. They also play a
significant role in advocacy, representing a
collective voice to influence policies and
regulations that benefit startups. Additionally,
some of them offer skill development and
training programmes for startups and can
assist in market access and commercialization.
Some intermediaries may offer incubation and
acceleration services.
In terms of information and knowledge
sharing, intermediary organizations facilitate
the dissemination and exchange of best
practices and innovations within the
community. They provide valuable insights
and connections for international expansion,
helping startups understand and enter global
markets. Therefore, intermediaries are
essential for fostering a vibrant, sustainable
and collaborative STI ecosystem.
Several intermediaries are already active in
building STI ecosystems in CLTV. Startup
associations are active players, including
Startup Vietnam Foundation, Thai Startup
Association, Cambodian Association of
62
Chapter 1.
Finance and Technology, Lao National
Chamber of Commerce and Industry, to name
but a few.
Although intermediaries are crucial in
facilitating innovation among organizations,
they encounter significant challenges as they
compete for limited resources, especially in
developing countries. Rivalry can lead to a
scarcity of resources, especially impacting
smaller or newer intermediaries. In their quest
for resources, intermediaries may prioritize
quantity over quality, which could dilute the
effectiveness of their services. Additionally,
some intermediaries may focus on immediate
results over long-term innovation goals. For
example, an intermediary may provide broad
training instead of training tailored to a
startup’s unique and complex needs. Tailored
training is especially crucial for startups
working with new technologies and business
models.
Another key issue is that these intermediaries
often act as lobby groups, advocating for
policies or resources that benefit their
interests. Lobbying can increase competition
among intermediaries, as each tries to
influence decision-makers in their favour,
63
Chapter 4. Strategic considerations
potentially at the expense of others. This can
create conflicts of interest, as intermediaries
may have other ambitions than the long-term
goal of building a robust STI ecosystem.
Competition between intermediaries may
result in a homogenization of services, limiting
specialized support for certain fields and
creating barriers for new intermediaries
attempting to enter the market. Moreover, it
could inhibit collaboration between
intermediaries, yet collaboration is
advantageous for the whole ecosystem. Thus,
balancing competition with collaboration and
aligning services with the genuine needs of the
industry are critical for the effectiveness of
these intermediaries.
When Governments aim to achieve specific
policy objectives, they may turn to
intermediaries. Government interactions can
vary based on the kind of intermediaries
involved. For instance, how the Government
supports university incubators and
accelerators could differ from its approach to
backing private sector membership and
business support organizations. The main goal
is to find the right mix of competition and
cooperation among intermediaries.