Backing start-ups key for S'pore's innovation push, despite higher risks: HSBC chief

Ensuring they have adequate banking support at all stages is critical, he says

- Sheila Chiang Business Correspondent

Startups are key drivers of innovation, and ensuring they have adequate banking and financing support from early stage to scale-up is critical for any economy.

For Singapore to cement its position as a global innovation hub, it is especially crucial for banks to play their part in supporting the companies that will shape the future economy, even though lending to startups carries higher risks than lending to mature firms.

These are the views of HSBC group chief executive Georges Elhedery, who spoke to The Straits Times during a recent trip to Singapore.

The Republic, a global innovation hub, plays an important role in HSBC’s global strategy, and as the bank expands in the Asia-Pacific region.

"There are great innovation startups in Singapore. There’s a venture capital appetite in Singapore. Being able to leverage and bring all our expertise to bear in this ecosystem is paramount, and that’s another major development area for us."

Speaking to ST at the HSBC office at Marina Bay Financial Centre, Mr Elhedery said that much of the gross domestic product growth in major economies, including the US, is now driven by innovation, technology and artificial intelligence (AI).

For example, while advanced technology represents only 4 per cent of the US’ GDP, it accounts for 92 per cent of GDP growth, he said.

“This trend is mirrored in Singapore, making our participation in the innovation ecosystem critical for building the businesses of the future. Their (startup) contributions are going to be critical for the growth of economies, and it’s going to be no different for Singapore.”

Singapore’s performance in global benchmarks further illustrates this trend.