By: Tony Lai
Photos: Cheong Kam Ka
Opening a café or a boutique seems to be a common aspiration for youth entrepreneurship in the city, but the territory’s start-up scene is actually more vibrant than the imagination of many as several case studies from the Macau Young Entrepreneur Incubation Centre reveal.
With the Centre listed as one of the national co-working spaces in recent times it is expected more investors across the region – and even overseas – will pay attention to the potential Macau start-ups and give them a boost.
The Centre was first established by the Macau Economic Services in 2015, but in order to provide more comprehensive support for young entrepreneurs it has been run by government-controlled Parafuturo de Macau Investment and Development Ltd. (PFM) since October 2017.
One of the main changes for the Centre with PFM at the helm is that it now opens around the clock, said Centre CEO Carlos Lam Ka Vai.
“In this way, we can better help those young entrepreneurs still in the beginning stage of their businesses and always striving hard for success,” he said at the Centre, which is located on a floor of high-end residential development The Carat in NAPE.
Number of approved projects as members of Centre
Besides offering its members office space, the Centre provides comprehensive facilities and professional services, which include legal and accounting consultancy, entrepreneurship training and consultancy, meetings with industry experts, road shows and capital matching sessions.
Mr. Lam emphasises that the Centre also organises visits facilitating exchanges between young local and overseas entrepreneurs; for instance, the Centre invited 17 of its members to the Web Summit, one of the largest technology conferences to recently wrap up in Lisbon, Portugal.
“We met different start-ups and leaders in the industry from around the globe [at the Summit],” he said. “We’ve also visited over 10 start-ups in Lisbon so that our members could be inspired by their experiences.”
“One of the members, who works on developing an online retail platform, told us that he has learned a lot from [his] Portuguese counterparts [on this trip] which could be applied to Macau,” Lam continued. “He will start a new business next year and expects to enhance revenue by at least MOP5 million [US$625,000].”
Overall Entrepreneurship Activity rate of Macau in 2018
According to information provided by the Centre, it has received 145 membership applications, with 110 applications approved, of which nearly one-half derive from the technology field, followed by commerce and trade and culture, which account for 14 per cent and 13 per cent, respectively, of total approved applications.
Some of its members have already gained traction and reputation on the regional and even international stage. One of its members is a nanometal technology company which focuses on the development and application of nano silver fibres. The fibre, a transparent but conductive material that generates light when connected to electricity sources, can be applied to many areas, including smart electricity appliances, traffic lights, soft-touch control panels, clothing, solar energy panels, and others.
This project won the inaugural Parafuturo de Macao Innovation and Entrepreneurship Competition organised by PFM and the Centre in May of this year. It was then recommended to participate in the The Create@Alibaba Cloud Startup Contest (CACSC), a global entrepreneur contest organised by an affiliate of Chinese e-commerce giant Alibaba Group in November, from which the company emerged the winner.
“A Macau project defeating over 3,000 other projects in this competition proves that Macau start-ups have a lot of potential,” observed Mr. Lam.
He pointed out that local start-ups face various challenges at different stages of their business development, requiring different types of support from policies to resources to personnel.
“Many of our members said the lack of start-up capital and human resources are some of the problems plaguing young local entrepreneurs,” said the Centre CEO. “The situation is in particular true for high-tech projects, which face a high threshold for entry and long development period, requiring different types of software and hardware support like financing during the transformation of their research results into products.”
“A Macau project defeating over 3,000 other projects in [an international entrepreneurship competition] proves that Macau start-ups have a lot of potential,” said Centre CEO Carlos Lam Ka Vai
The Centre will work on more in the future to provide support for potential start-up projects such as taxation benefits and incentives for inventions, to “help keep entrepreneurs afloat in the research and development cycle, thus nurturing new business and new economic [engines],” said Mr. Lam.
National co-working space
Local young start-ups might indeed have more opportunities in the future – because the Centre has recently been listed as one of the national co-working spaces by the Ministry of Science and Technology, the first venue in Macau and Hong Kong to be enlisted under this initiative.
“This is the recognition for the software and hardware of the Centre,” he said.
The national co-working space is an initiative that surfaced on the Mainland in 2015 when Beijing laid down policies to encourage individuals to pursue entrepreneurship and innovation. Figures show various provinces and cities on the Mainland launched more than 300 new policies and measure for co-working spaces last year, helping start-ups acquire government subsidies of as much as RMB3.15 billion (US$453.34 million). Co-working spaces on the Mainland also helped start-ups attract investments of RMB67 billion from private investors last year.
“Once the Centre has become one of the national co-working spaces this will help attract more national and overseas investment funds coming to Macau and investment in quality Macau projects,” said Mr. Lam.
This recognition also encourages the Centre to improve its services and facilities, he added: “In order to become one of the national co-working spaces, the Centre has to provide all-round services [for its members] and has to meet the demanding requirements, such as . . . the number of members, the number of start-up events to be held annually, etc.,” he explained.
He believes recognition will also help start-ups from Portuguese-speaking countries use Macau as a platform to enter the Mainland market.
Speaking of co-operation with the Lusophone world, Mr. Lam said PFM had inked a co-operation agreement with famous Portuguese start-up incubation platform Beta-i in June, setting up a Macau interactive zone in Lisbon. The zone seeks to better help young Macau and Mainland Chinese entrepreneurs interested in exploring the Lusophone market, and vice versa.
“We expect to set up another Macau interactive zone in Brazil next year,” the CEO noted. “As more Macau zones are established, we could create a co-operation and exchange platform for entrepreneurs from the Mainland, Portuguese-speaking countries, and Macau to explore the markets [of the three sides].”
The Centre has also set up another Macau interactive zone with an incubation platform in Zhongshan in Guangdong Province, which now has over 20 members, facilitating exchanges between Macau and the Mainland. During the reign of PFM of about a year the Centre has signed nearly 20 co-operation agreements with national and overseas incubation spaces, funds, and higher education institutions, including Beta-i, he added.
“The Centre overall provides a wide range of services for young entrepreneurs . . . helping them to participate in the development of the Guangdong-Hong Kong-Macau Greater Bay Area and explore the Lusophone market . . . [and] nurturing their growth,” he concluded.
Macau still lags regional markets
A local survey shows that the local start-up landscape is still behind the curve vis-a-vis other regional markets with more vibrant scenes.
The 2018 annual survey – co-developed by Macau SMEs Service Platform, eRS e-Research Lab, and the Faculty of Business Administration at the University of Macau – reveals that 11.3 per cent of interviewees are interested in start-ups, 5.4 per cent of whom are new start-ups or those which will soon start their own businesses.
Compared with these groups, 4.8 per cent have their own businesses dated before May 2014, while a majority of them, or 78.5 per cent, said they have no interest in entrepreneurship. The survey polled 800 Macau residents aged 18 or above for this survey with a margin of error of plus or minus 3.54 per cent.
The Overall Entrepreneurship Activity rate of Macau – comprising those who have had their own business, new start-ups and upcoming start-ups over the total – was 10.2 per cent in 2018, lower than the 13.1 per cent of 2017.
The index was also lower than other regional markets during the same period; for instance, trailing Mainland China (16.9 per cent), Taiwan (20.7 per cent), and South Korea (24.5 per cent), the survey found.
The survey also pinpoints that new local start-ups and upcoming start-ups spend on average MOP311,000 (US$38,875) and MOP367,000 in start-up capital. The main source of financing for new start-ups was their own savings, while friends and others were the main source for upcoming start-ups, revealed the survey.
Of the new start-ups, 26.3 per cent said they had already broken even, and that the average break-even time was about 17.8 months. In addition, new start-ups had prepared 4.5 months on average before starting their own business, with human resources and financing two of the biggest challenges they faced.