After writing about Web3 over the past few weeks, I needed a break. This week, I wanted to look at Laos, the only landlocked country in Southeast Asia. More specifically, I was curious why Laos, amid flourishing tech scenes unfolding in other Southeast Asian countries, isn’t pumping out startups and why the Laos startup ecosystem has yet to catch the attention of institutional investors.
Note: I’m aware that countries like Cambodia and Myanmar aren’t exactly havens for startups, and while they face similar issues, this article is dedicated to the country named after its people — Laos.
First and foremost, let’s look at the challenges Laos faces—research by Emerging Markets Consulting shows that private sector development in Laos is often impeded by three main obstacles: government policies, lack of resources, and skill gaps in the population.
These are deep-rooted issues but not impossible to solve. Countries like Indonesia, Vietnam, Thailand, and Malaysia have all dealt with similar issues as Laos at one point or another, and as a result, have flourished in the tech sector, giving the world Grab (Malaysia), Axie Infinity (Vietnam), Tokopedia (Indonesia), and Flash Express (Thailand). Though many of these companies have international users, the ability to establish themselves on home turf, despite the challenges, is worth commending.
Startups are an important part of a country’s economy, and while neighboring countries have shown great interest in and provided policy support for startups, Laos seems to be the exception. Its government currently lacks legislation that supports the establishment and administration of startups, and provides little government incentive and support.
To be fair, Laos is focused on other national concerns, and allocating funds for startups—which often come with a high risk of failure—clearly isn’t a priority. So, where does that leave Laos?
It’s at a crossroads. It can continue as it has been—lagging far behind other countries in Southeast Asia, or it can take the initiative to provide a policy strategy and action plans to support the Lao startup community. Sure, it’s a risk, but startups can bring potential benefits to a country’s development, attracting new talents and helping boost its economy.
Laos could also introduce specific measures to support and promote startups, including tax incentives, or allocate part of its national budget to promote the use of new technology and train new local talents. It could also introduce a regulatory framework to govern online businesses and e-commerce, and at the very least, express an interest in promoting local startups so Lao entrepreneurs feel empowered to help the country in which they operate.
The Laos startup ecosystem, while not flourishing, isn’t all doom and gloom. In August 2021, Forbes Asia Magazine announced the Forbes Asia 100 to Watch list, which included LOCALAOS, the first and leading ride-hailing service in Laos, and also the first Lao startup to be listed on Forbes Asia 100 to Watch. It’s a promising start, and congrats to LOCALAOS, but more needs to be done at the national level if Laos hopes to get a piece of Southeast Asia’s digital economy, which is expected to reach USD 363 billion by 2025. Come on, Laos, show your startups some love.
All opinions expressed in this piece are the writer’s own and do not represent the views of KrASIA. Questions, concerns, or fun facts can be sent to [email protected].