In recent years, the world has seen consecutive innovations and breakthroughs. Investing in research and development (R&D) has resulted in technological advancements that have improved the way individuals live and contribute to enhancing the operational efficiency of businesses.
As industry leaders continuously develop technologies, few start-ups have taken the initiative to delve beyond traditional technologies and focus on exceptional innovations that require an in-depth study. One of these groundbreaking innovations is known as deep tech.
Dive Into Deep Tech
Deep tech is often based on scientific discoveries and advanced engineering studies, which translate theoretical potential into applications in the real world. This technology breaks away from mainstream or consumer-focused technology by navigating through extensive R&D cycles for more profound and impactful discoveries, such as quantum computing, synthetic biology, and advanced biomimetic materials.
The problem-oriented focus of deep technology— characterized by a collaborative ecosystem that includes academia, public institutions, venture capital, and other funding groups— is what distinguishes it from the traditional form of technology. The strategy is not one-dimensional; it involves the integration of many technologies. Studies show that 96% of deep tech ventures globally use at least two technologies during their operations.
Investment in Deep Tech
The growth of Asia's deep technology ecosystem can be attributed to the rise in venture capital and investments. Governments in the region are recognizing the importance of promoting innovation and have introduced rules and financial initiatives to assist entrepreneurs in the deep tech industry. For instance, China has been leading this effort by investing in start-ups. The Chinese government has heavily invested in R&D, fostering an environment that is favorable for the advancement of disruptive technology.
Singapore has also emerged as a hub for developing technologies. The government's commitment to research and innovation, along with its business-friendly nature, has attracted new enterprises and investors, resulting in a flourishing ecosystem where ideas are able to blossom and evolve into solutions that can be implemented.
Reports by DealStreetAsia showed that Singapore represents 86% of all deep tech deals in Southeast Asia between January 2020 and June 2023. Health technology accounted for 25% of deep technology agreements and more than 50% of the total investment value. The survey highlighted that 90% of deep tech agreements occur at the early stage, suggesting the sector is still in its early stages within the overall tech industry.
In 2023, DealStreetAsia reported that Southeast Asian start-ups experienced fluctuating funding, which highlights an increasing interest in deep tech businesses in the region, especially in the healthcare and biotechnology sectors. In July, four deals worth a total of USD 1.78 billion were finalized. However, financing fell in August to USD 486 million (the third-lowest). The region regained its funding in September, surpassing the USD 600 million mark. Finally, a total of USD 200 million was invested in the region’s start-ups in October.
This also shows that Southeast Asia is quickly becoming a key player in the global deep tech sector, despite facing challenges such as lack of skilled personnel, high development costs, and market penetration issues.
Impacts of Deep Tech
The potential of deep tech extends beyond technological breakthroughs; it is also being considered to play an essential role in addressing difficulties and directly contributing to Sustainable Development Goals (SDGs). The UNDP Singapore Global Centre for Technology, Innovation, and Sustainable Development is starting a series to investigate the possibilities of utilizing advanced technology to accomplish the SDGs.
Deep tech is considered to be a possible accelerator in addressing the issues of achieving the 2030 goals worldwide. It can provide new solutions and different viewpoints to long-standing development issues, presenting innovative infrastructures and technologies that, if used efficiently, might accelerate progress towards SDGs.
In the 2023 SDG report, 48% of the SDG targets are not on track, and 37% have not shown any improvement. The UNDP Global Centre Singapore said that advanced technology shows potential in tackling issues like excessive land use and water shortage. Additionally, cellular agriculture and superabsorbent hydrogels are innovative solutions that can reduce resource use and address water scarcity in dry environments.
Deep tech not only addresses specific issues but also cultivates complete ecosystems, showcasing the vast potential of this technology. This technological advancement attracts and supports a diverse range of skilled individuals, particularly in STEM.
Asia’s investment in deep tech may be essential for effectively addressing global issues like healthcare crises, climate change, and resource management. The progress in the region has the potential to provide solutions that benefit not just the local communities but also the global population.
