The buzzing South East Asian hub of Bangkok is currently ranked the top city for digital nomads to live and work in by Nomadlist.com, ahead of Barcelona and Berlin.
Faster internet, cheaper flights and the changing nature of work are driving thousands of people to leave their jobs and move to exotic locations to work independently - as digital nomads. Many are coming to Thailand.
In recent years authorities there have attempted to address the growing problem of digital freelancers and entrepreneurs that work illegally, by tightening requirements for education visas or by introducing stricter measures to prevent border runs.
In a new move in August the Thai cabinet endorsed a smart visa for skilled professionals and investors (including start-ups) valid for up to four years in fields deemed helpful to advancing Thailand’s high-tech development.
The measure follows the introduction in 2014 by Estonia of its e-Residents Visa, which allows those based in other countries to register a company in Estonia and continue operating outside of the Baltic state, while taking advantage of the country’s EU status to enter the European market.
A once-off fee of €100 ($118) is levied for the visa. By early this month over 27,000 such visas had been issued to people from 143 countries. About 40% of applicants apply for the visa to set up and run a location-independent business. The remainder are base in Estonia (Tallinn, the capital is ranked 119 by Nomadlist).
Affordable stay, fast internet
In measuring a city's attractiveness for digital nomads, Nomadlist.com's ranking considers a range of indicators. These include everything from a city's quality of life to whether the city is female friendly. Crucial is affordability and internet speed.
For example Bangkok has at an average cost of $1,232 a month for foreigners who stay in affordable accommodation and with an internet speeds of 40 mbps.
To lure foreign entrepreneurs to freelancers it also helps for a city to have a good nightlife and to offer plenty of fun attractions. Bangkok, Berlin and Barcelona all do that.
Bangkok is also an easy place to start a business. It takes just five days in Thailand to do so, according to the World Bank's latest Doing Business rankings. This is faster than Germany's average of 11 days or Spain's 13 days.
While most cities in Africa and South America are ranked lower down, Taghazout in Morocco is at ninth place and Cape Town at 46. Panama City (33) is the top Latin American one, while Buenos Aires is at 64 and São Paulo at 118.
Make them stay, set up
It's not clear what the benefits are for a city to attract more digital nomads. On the one hand because most stay only a short while, few pay tax directly to their host countries (but contribute via tax levied on the goods and services they buy).
Yet there's always the chance that a good number of digital nomads will stay on. Allowing them easier access to visas may entice more to stay on and even set up a business.
If these firms are then able to bring new knowledge and ideas while creating jobs and contributing tax revenue, then authorities should be doing more to attract such people to their cities and ensuring that a good number stay.
For instance Chile in April launched a tech visa (see this post). Its capital Santiago may host one of the world's top government accelerators (Start-Up Chile) and is only little bit more expensive than Bangkok (at $1,326) - yet it is at 405 spot in Nomad List's rankings.
It remains to be seen whether the new visa will make the city more attractive for what are often effectively travellers looking to combine work with a good time. Making one the continent's blandest capital's more fun might help more than just introducing special visas.
Best overall digital nomad cities according to Nomad List (with nomad cost)
1. Bangkok, Thailand ($1,232)
2. Barcelona, Spain ($2,154)
3. Berlin, Germany ($1,989)
4. Chiang Mai, Thailand ($907)
5. Canggu, Indonesia ($1,109)
6. Dallas, US ($2,190)
7.Budapest, Hungary ($1,343)
8. Miami, US ($2,902)
9. Taghazout, Morocco ($973)
10.Kuala Lumpur ($1,041)
Timm is a South African who writes on small business in emerging economies. Follow Small Business Insight on Twitter at @Smallbinsight and on Facebook.
Seven years after its launch, 53% of the 1,600 start-ups that have passed through Start-Up Chile are still in operation today, and have created about 15,000 jobs.
The figures were presented this week by Start-Up Chile executive director Rocio Fonseca (pictured above) during the inauguration of the programme’s new offices in Santiago, Chile.
Launched in 2010, the programme provides grants to start-ups from around the world that base themselves in Chile. The Chilean government usually reserves about half of the places for participants for locals (on the last round – the 18th, 42% were Chilean).
At the launch of the new offices, Fonseca pointed out that since the programme’s launch in September 2010, about a third of the surviving graduates have elected to remain in Chile.
This is a similar level to results presented by Start-Up Chile last year (see this post and this link ).
In all 21% of participants are women, which the programme attributes to its S-Factory initiative aimed at female entrepreneurs and launched in 2015.
Fonseca said about 5,000 highly skilled jobs had been created by graduate firms in Chile, while a further 10,000 had been created in the rest of the world. It works out to an average of about 17 jobs per graduate company – quite a sizeable number for a start-up.
The Chilean government has so far spent $53 million on the programme. Participants have been able to raise a further $1 billion once they graduate from the programme – of which about $200m has been kept in firms domiciled Chile itself.
Start-Up Chile claims six countries have replicated the programme, while a further 50 have developed similar initiatives. The programme is in talks with Thailand, Russia, South Korea and Japan to share its experience with these countries.
More countries should look to Start-Up Chile and the success the programme has had in encouraging innovative start-ups to take root.
Timm is a South African who writes on small business. Click here to sign up for the monthly Small Business Insight newsletter.
If cities are to grow start-ups they must become more globally connected, says a new report.
Data from the 2017 Global Startup Ecosystem report released by Startup Genome earlier this month reveals that cities in emerging economies must do more to attract immigrants and seek out foreign customers.
Where 46% of start-ups are founded by immigrants in Silicon Valley, just 4% of immigrants found new firms in São Paulo and Lagos.
Shanghai also does well when it comes to foreign customers, outperforming Silicon Valley - with 32% of customers originating outside the country, against 30% in the latter. The remainder of the emerging cities bar Bangalore (at 24%) fall below the average of 23%.
Reaching foreign customers, say the report’s authors, allows start-ups to identify problems and solutions that are relevant to broad parts of the world.
“Additionally, productivity and innovation increases as start-ups go global – any given economy, companies with more exposure to foreign markets are the 'frontier' firms that drive growth.”
The authors say establishing more relationships between founders and executives in other parts of the world brings in more ideas and more innovation, resulting in faster startup growth and more vibrant ecosystems.
Those cities with the highest shares of customers elsewhere, are a mix of top-performing ecosystems and smaller places (where a small local market forces them to look outside) .
The Israeli city of Tel Aviv ranks first, where one-third of startups sell to customers outside of the immediate region. The authors points out that because of its small economy and thanks to their global community, Israeli start-ups have successfully executed go-global strategies for years.
They note too that city size guarantees nothing. “Large metropolises that are otherwise well-connected within the global economy aren’t necessarily plugged into global start-up networks.”
But how do foreign founders looking to set-up start-ups in South Africa fare?
A recent parliamentary reply by the Minister of Home Affairs Malusi Gigaba (pictured above) that his department did not approve a single application new business application between January and December last year suggests things are worse than they seem.
Most concerning is the numbers – just 148 applications for business visa renewals and 48 new business visa applications were made over this period. They seem very low.
If South Africa and other emerging economies want to pump up start-up activity they should do more to relax visa requirements and promote more connections between foreign entrepreneurs and investors and local start-ups (see also this earlier post).
Timm is a South African who writes on small business. Follow Small Business Insight on Twitter at @Smallbinsight.
*Update: Malusi Gigaba was moved to minister of finance from March 31.
Amiena Hartley (31) runs two hair salons. But eight years ago, after completing a six-month entrepreneurship programme, she wasn’t sure what she wanted to do.
"I had no experience in hair. I wasn’t even sure I wanted to be a hairdresser," she says.
Instead of starting a business right after graduating from the Raymond Ackerman Academy of Entrepreneurial Development in Cape Town, she opted to first gain experience in the sector while doing a three-year hair-care course.
In 2015, after undergoing a year-long incubation programme run by the academy, she used her own funds to buy a salon where she had been working and formed her Hair Corp brand. Last year she tapped a R50,000 ($4,000) grant from the National Youth Development Agency to buy a second salon.
Few become entrepreneurs
Hartley is one of relatively few young people who have ventured into business in SA. The 2015/2016 Global Entrepreneurship Monitor report for SA shows 10.9% of adults aged 25-34 (and 6.3% of those aged 18-24) were involved in starting a business in 2015, against the Africa average of 15% and 24%.
Only between 10% and 20% of young people who attend entrepreneurship programmes now run a business. Of the 296 graduates who have passed through the Allan Gray Orbis Foundation’s bursary programme since its inception in 2005, just 44 (15%) have become entrepreneurs.
Fredell Jacobs, head of impact assurance at the foundation, says for some participants the social circumstances that sometimes come with family obligations, and the risk of no income if the business fails to take off, can act as disincentives.
Employment equity and the resulting growth in demand for black talent at corporates also play a role in why so few of the participants — many of whom are black — start a business.
But he says the foundation takes a long-term approach. Young people are encouraged to get work experience and build up capital and contacts before venturing into business. The cultivation of an entrepreneurial mind-set is the key.
At Cape Town-based Tsiba college, which runs a three-year entrepreneurship programme, only about 10% of the 1,000 young graduates since the programme began in 2005 are today running businesses.
While the R55,000/year tuition cost for each student is largely covered by donor funding, Tsiba head of international partnerships Peter Kraan says donors don’t see this as wasted money.
Raymond Ackerman Academy director Elli Yannikaris believes the need to build confidence in one’s ability to launch an enterprise is key to understanding why just 18% of the 550 alumni who have passed through the academy’s six-month programme since 2005 have started a business.
Efforts to get more learners at schools interested in entrepreneurship have not proved easy.
The Small Enterprise Development Agency (Seda) has run a schools entrepreneurship programme and competition with the department of basic education since 2006.
Since 2011 a total of 295 teachers and 21,143 learners from 180 schools have passed through the programme.
Seda spokesman Boy Ndala says, however, that teachers often view the programme as additional work.
New graduate training
Seda is also seeking to help graduates start their own businesses through an 18-month programme at selected technical and vocational education and training colleges.
The programme involves four rapid incubators and theoretical training through 10 centres for entrepreneurship.
More than 800 graduates have been assisted and the agency has helped to set up more than 40 businesses, creating 80-plus jobs. Ndala says it is too early to assess the impact of the programme: the incubators were launched only last year.
Start-up culture needed
Changing mind-sets is not easy, says Primestars Marketing managing director Martin Sweet (pictured above with Small business minister Lindiwe Zulu). Four years ago he initiated the "Step Up 2 a Start Up" programme.
The initiative uses cinemas and a competition to get disadvantaged youth interested in addressing problems in their communities.
Last year 16,000 learners from grades nine to 12 (in more than 300 schools) took part, while 500 went on to enter the business idea competition where there was R1.6m in prize money.
Sweet says the programme, using R4m raised last year from sponsors, has helped make learners curious and adept at problem-solving. However, he adds that it’s difficult to create an entrepreneurial culture where none exists.
This story originally appeared in The Financial Mail (go here for the original version). Follow Small Business Insight on Twitter at @Smallbinsight.
Stephen Timm is a