Speech by MOS Teo Ser Luck at the APAC Innovation Summit at Convention Hall, L1, Hong Kong Convention and Exhibition Centre – “Strengthening the Innovation Value Chain”

Dr Cao Jianlin, Vice Minister, Ministry of Science and Technology, China

Mr C Y Leung, Chief Executive of the Hong Kong Special Administrative Region

Mrs Fanny Law, Chairperson, Hong Kong Science and Technology Parks Corporation

Distinguished Guests

Ladies and Gentlemen

Good Morning.

Introduction

It is a pleasure to join you this morning to talk about Singapore’s journey in becoming an innovative and entrepreneurial economy.

Singapore’s Innovation and Entrepreneurship Landscape

Singapore is a small and open economy. To compete globally and achieve long-term, profitable growth, our companies recognise the need to keep up with rapid technological advances, to embrace an innovative mindset, and to continuously improve on the products and services for their customers.

We have done reasonably well in pushing our economy toward greater innovation and entrepreneurship. Singapore was ranked the most innovative country in Asia and the seventh most innovative country in the world, according to the Global Innovation Index released in July this year. This Index looks at the innovation performance of 144 economies. We were pleased that Singapore has made much improvement, moving up from the eighth position in 2013 .

We also have a thriving entrepreneurial environment in Singapore. The number of employing start-ups increased from 24,000 in 2005, to 42,000 in 2013. According to the Global Entrepreneurship Monitor, total early-stage entrepreneurial (TEA) activity in Singapore, which represents the percentage of working-age population about to start or who have recently started a new business, has grown from 4.9% in 2006 to 10.7% in 2013. This is the third highest TEA rate among the 26 economies studied, after the United States and Canada.

The advancements in innovation and entrepreneurship have been due in part to the Singapore Government’s commitment and efforts in pushing for strong innovation and facilitating the growth of the entrepreneurship value chain. I will share about our efforts in promoting research innovation in Singapore.

Promoting Research Innovation in Singapore

In 1991, when we launched the first National Technology Plan, the Singapore Government committed S$760 million to R&D, and we have never looked back. In 2011, we launched our Research, Innovation and Enterprise Masterplan (RIE2015), and the Singapore Government committed to invest S$16.1 billion over 5 years to further support research and innovation activities. This investment stands at close to 1% of Singapore’s GDP.

One of the key priorities of our Masterplan (RIE2015) is to strengthen linkages and promote closer collaborations between public and private sector R&D, and commercialise research into new and better products and services. We have seen very encouraging results from these efforts. Average R&D spending by firms undertaking R&D has grown by 50 per cent, from $4 million in 2002 to $6 million in 2012 .  Over the same period, sales revenue from the commercialisation of products and services attributed to R&D performed in Singapore grew by almost 90 per cent.

We have a specialised agency (A*STAR) to look after mission-oriented research focussed on economic outcomes. Our public research institutes under A*STAR directly partner industry and global research leaders such as Applied Materials, Rolls-Royce, Nestle and Procter and Gamble to enhance the competitiveness of our industry sectors. For instance, in 2012, Applied Materials and A*STAR’s Institute of Microelectronics established a Centre of Excellence in Advanced Packaging at a combined investment of over US$100 million to drive advanced 3D chip packaging research so as to position Singapore as a global leader in semiconductor R&D.

Singaporean companies have also benefitted greatly from various government initiatives that help raise their innovative capacity and productivity. For example, to support companies in innovation, we have Centres of Innovation (COIs) in Singapore. Operated by research institutes and polytechnics, each COI focuses on a specific industry sector, providing laboratory facilities, consultancy, training courses, and testing services to businesses engaged in innovation. This facilitates the process of developing innovative products, particularly for smaller companies that may not have dedicated research capabilities.

To encourage greater use of technologies, we also have the Technology Adoption Programme, where a team of experienced intermediaries from A*STAR will be seconded to help companies adopt technology solutions to increase their productivity. If solutions are not currently available, the intermediaries will work with public institutions to identify and translate novel technologies into adoption ready solutions.

Since its launch, the Technology Adoption Programme has achieved more than 4,000 company engagements and helped local companies implement more than 900 technology adoptions. We expect that these technology adoptions will increase productivity by an average of 20%.

Creating an Environment Conducive to Entrepreneurship and Innovation

Start-ups are an important route to commercialisation for many new technologies, and we have also taken care to address their specific needs.

First, we have ensured that there are financing options available for innovative new companies. For very early stage start-ups with innovative ideas, the government provides grants for proof of concept or proof of value projects. For later stage start-ups, we have worked to catalyse the availability of private sector investment through co-investment with the private sector, as well as tax incentives for venture capital investment.

A company that has benefited from such government assistance is T-Ware. T-Ware received early stage funding from the government for the development of a therapy management garment. Known as the T-Jacket, the garment helps to calm children suffering from autism or other sensory disorders, by using haptics technology developed at the National University of Singapore (NUS) to apply pressure selectively on the wearer. Test users in Singapore responded positively to the T-Jacket. With additional help from NUS, T-Ware received external venture investment and began selling to international markets. This year, T-Ware won the first prize at the 2014 Asian Entrepreneurship Award in Japan, beating 16 other companies from the region.

Second, the government supports the entrepreneurship landscape by facilitating the formation of clusters and communities. Some of you may have heard of the Block 71 at Ayer Rajah Crescent. This is a special concept that we started in 2011 where we set aside an area for start-ups. The compact 7-storey block today houses 23 incubators, 250 start-ups and 1,000 entrepreneurs from the info-communications and media cluster, with the resulting community providing support, mentorship and business connections that are necessary for a start-up to succeed. Block 71 has drawn global attention to our entrepreneurial culture, and earlier this year, it was covered in the Economist magazine, where it was described as “the world’s most tightly packed entrepreneurial ecosystem”.

Next year, we will be opening two more blocks adjacent to Block 71 to create a comprehensive start-up launchpad called

LaunchPad@one-North

. The two new blocks will provide more space for promising start-ups and incubators. This is expected to double the size of the community located at one-North to 500 start-ups and 2,000 people.

We hope that the LaunchPad will be attractive to international players as well, and will provide a springboard for them to reach out to Asia’s growing market. Singapore is a highly connected city-state, and several start-ups have successfully reached out to international markets from here.

Third, we have worked to nurture a culture of innovation and entrepreneurship. In 2003, the government set up the Action Community for Entrepreneurship (ACE) to champion the development of the eco-system, identify and address gaps in the start-up landscape, and encourage the development of an entrepreneurial mindset among Singaporeans. Over the years, ACE has supported business plan competitions, workshops and industry specific outreach to create a vibrant entrepreneurial community, and reaches more than 7,000 people annually through such activities.

This year, ACE was restructured into a private-sector led body, giving it a freer hand to chart its own course. We took this move in recognition of the maturity of the entrepreneurship landscape, and believe that giving the community greater ownership of its direction will help to accelerate the growth of entrepreneurship in Singapore.

Conclusion

In summary, the Singapore Government has put significant effort into developing R&D capabilities, as well as a vibrant entrepreneurial landscape. We have come done reasonably well, but there remains a lot to be done.

Going forward, research and innovation will remain a cornerstone of our economic strategy, to grow Singapore into Asia’s innovation capital. We will continue our efforts to grow a spectrum of industry-relevant research capabilities within our public research institutions, and build a vibrant entrepreneurial environment. In doing so, we hope to create a dynamic and innovative economy that will creates economic growth and good jobs for our people.

Thank you.