View from Singapore
Singapore is making substantial efforts to develop its R&D base, but must overcome cultural issues before it can flourish as an innovation-led economy
Singapore, a nation of 4.4m people, has grown rapidly over the past 40 years into a thriving economy with a GDP per head equal to that of leading West European countries. Its early development was driven by its port, petrochemicals processing and electronics assembly activities. The economy still depends on exports, so it suffered between 2001 and 2003, when global recession, the dotcom crash and an outbreak of Severe Acute Respiratory Syndrome curbed tourism and consumer spending. As a result, the government is trying to develop the R&D base, to diversify the economy and move it up the value chain.
Singapore had 86.7 researchers, scientists or engineers per 10 000 population in 2004. Total R&D expenditure was 2.25% of GDP, or about €2bn, of which the private sector provided about two thirds. The government attributes €7.5bn of sales revenues in 2004 to products and processes that stem from local R&D.
Financial incentives, fiscal stimuli and training schemes are now being offered to increase R&D investment. Grants for investments in innovation, start-ups, and patent applications, are available to both internal and external investors.
The R&D base is being broadened through investment in biomedical sciences, which is also meant to attract top talent. Scientists are being offered first-class laboratories, top-notch equipment, and money to pursue work that's not fundable, or too controversial, back home. Singapore has already spent more than €1bn on therapeutic cloning, drug discovery, cancer research and other areas. The strategy appears to be working: a third of the 4000 science PhDs working there are foreigners.
Singapore is becoming a regional biomedical centre, having attracted companies such as GlaxoSmithKline, Schering-Plough and Rhone Poulenc. Pharmaceutical concerns such as Pfizer, Wyeth-Ayerst and Merck have facilities in the Tuas Biomedical Park. The government has also created a biomedical sciences research campus, called Biopolis.
In 2000, Singapore had about 50 000 students in higher education. It wants to triple this number over the next 10 to 15 years, by attracting more international students and schools. There are three key local universities: National University of Singapore (NUS), Nanyang Technological University (NTU) and Singapore Management University (SMU). NUS and NTU have transformed themselves over the past 10 years into significant research and teaching institutions. SMU was established in 2000, is growing fast and has a reputation of being open to business. Singapore has also attracted subsidiaries or campuses from world-class foreign universities such as INSEAD, Johns Hopkins Medical School, Georgia Tech and the Chicago Graduate Business School.
An effective IP policy, matching that of Western industrialised nations, has been developed to protect investors. Singapore has signed the main IP conventions and treaties, and was ranked top in Asia for IP protection in 2002, 2003 and 2004 by The World Economic Forum.
Risk capital is also available, through a local venture-capital industry of around 150 firms that has more than €8bn under management. The government has signed bilateral and free-trade agreements, as well as double taxation treaties, to ease regional commerce.
Singapore is working hard to boost its R&D base, but has issues to overcome before it can become an innovation-led economy. Technical expertise, design capabilities and risk capital are scarce. The local market is small, and the sophisticated markets and users that stimulate innovation are far away, both geographically and culturally. Many Asian organisations are averse to innovation, with hierarchical cultures, little tolerance for creative thinking and weak management. Finally, although the government is creating a strong IP protection regime, the population has yet to fully appreciate the value of a brand or the concept of IP rights.
Arnoud De Meyer
Deputy Dean, INSEAD, France
Arnoud.DE.MEYER@insead.edu
doi:eiq-2006-007-0005
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