Second Minister S Iswaran's Reply to Parliament Question on Government Productivity Schemes

Question

Ms Foo Mee Har: To ask the Minister for Trade and Industry (a) how successful have Government productivity schemes been in encouraging companies to innovate and invest in research and development; and (b) what more can be done to help companies starting on the innovation journey to qualify for Government support.

Oral Answer by Mr S Iswaran, Second Minister for Trade and Industry

1. There are various Government schemes to support our companies’ innovation journey. SPRING offers the Innovation and Capability Voucher scheme (ICV) which provides support to SMEs for consultancy services and the implementation of integrated productivity solutions. Since 2012, SPRING has awarded around $65 million to SMEs through 13,000 ICVs.

2. Another example is A*STAR’s Technology Adoption Programme (TAP), which was launched in July 2013. Under TAP, teams of advisors link SMEs with providers of technological solutions, or work with public research institutions to develop innovative solutions for adoption. So far, A*STAR has engaged more than 4,000 companies, and more than 1,200 companies have implemented technology solutions under the support of TAP.

3. For companies that are pursuing more advanced innovation projects, assistance is also available from SPRING’s Capability Development Grant (CDG), which co-funds up to 70 per cent of qualifying costs. The CDG covers a broad range of productivity improvement areas such as enhancements to workflow processes and technology innovations. In 2014, SPRING assisted more than 1,000 companies under CDG, and provided over $100 million in funding support.

4. In addition, the Productivity and Innovation Credit (PIC) scheme provides tax deductions and cash payouts to help defray the cost of a broad range of investments along the innovation value chain, from simple purchases of IT and automation equipment to more complex R&D projects to acquire new knowledge and create novel products. In Year of Assessment 2014, 54,000 companies made PIC claims.

5. To develop Singapore’s innovation capabilities, SPRING set up seven Centres of Innovation (COIs) in our public research institutes and polytechnics. These cover specific industry sectors, in Electronics, Environment and Water Technology, Marine and Offshore Technology, Food Innovation, Supply Chain Management, Precision Engineering, and Materials. The COIs provide technical consultation and facilities to support our companies in developing and prototyping innovative products.

6. The results from these efforts have been encouraging. In the 2014 SME Development Survey conducted by the DP Information Group, 75 per cent of the SMEs reported that they were planning to implement innovation in their companies. R&D investments by local SMEs have also increased. In 2012, local SMEs spent nearly $550 million on R&D activities. This is a 70 per cent increase in R&D expenditure compared to 10 years ago, when local SMEs spent around $320 million¹.

[1] From National Survey of R&D 2012 and 2002.