
A new study by Milieu Insight, commissioned by global CRM firm HubSpot, highlights that a significant majority (98%) of startups in Southeast Asia and India view artificial intelligence (AI) as crucial to their future strategies. This belief is especially strong in India (73%) and Indonesia (63%), where a high percentage of respondents strongly agree on AI's importance.
The study outlines how AI is reshaping the startup landscape by automating repetitive tasks and creating new roles requiring advanced skills. Around 32% of startups surveyed believe AI accelerates product time-to-market, while 30% think it helps deliver products faster. Another 30% see AI as a way to compete more effectively against larger companies.
Laurence Butler, Global Senior Director of HubSpot for Startups, emphasized AI's significant economic potential, comparing it to the advent of the internet. He noted that AI helps startups identify business gaps, anticipate customer needs, and enhance personalized customer experiences.
Despite the advantages, technological advancements bring challenges, particularly in hiring skilled talent. The hardest roles to fill are AI and machine learning engineers (35%), data analytics experts (33%), product managers (33%), and industry-specific specialists (33%). Software engineers are also in high demand (32%).
For market-facing positions, hiring is most difficult for marketing (46%), customer success (40%), and sales and business development (38%) roles. Cost and experience are primary issues in the talent pool, with additional challenges in soft skills and expectations regarding remote/hybrid work.
Country-specific challenges vary:
In Singapore, the key issues are a lack of diversity (41%) and specialized technical skills (37%), along with high costs (37%).
In India, challenges include limited startup experience (49%), misaligned expectations for remote/hybrid work (49%), general talent shortage (48%), lack of soft skills (47%), and high turnover rates (41%), with cost being a significant factor (50%).
Indonesia shares many of India's trends but faces less severe issues with soft skills, remote/hybrid work expectations, and turnover rates.
To address these challenges, startups need to rethink their talent strategies, which could involve upskilling and reskilling employees through government programs like Singapore’s SkillsFuture, leveraging remote work for a broader talent pool, and fostering a culture of diversity and continuous learning.
Despite global economic challenges and a decline in private funding to a six-year low, the startup ecosystem in Southeast Asia and India remains resilient. About 53% of startups found it easier to grow their businesses over the past year. Startups are now emphasizing the importance of profitability, with 98% agreeing that a clear path to profitability has become more critical. While geographical expansion is challenging for 23% of startups, customer acquisition and retention have improved.
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