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Singapore needs to narrow gap in innovation: DPM Tharman
SINGAPORE and other advanced economies must narrow the widening gap in innovation, as firms at the frontier of knowledge, productivity and new products are charging ahead of the rest of the economy.
Deputy Prime Minister Tharman Shanmugaratnam made this point on Monday as he opened the Singapore-France Innovation Forum 2017. The forum was held in conjunction with French President Francois Hollande's visit to Singapore, marking the first state visit to Singapore by France.
Mr Tharman said Singapore and France face several similar economic challenges. The aim of both governments is to accelerate innovation and productivity growth, as the basis for a broad-based increase in citizens' living standards.
"Firms near the frontier - and French firms are very good examples of this internationally - continue to be highly productive and innovative. But the much larger mass of firms, which are not near the frontiers, have seen little or no productivity growth," said Mr Tharman, who is also the coordinating minister for economic and social policies.
"Put another way, almost everywhere in the developed world, we have seen a weakening in the pace with which new ideas, new innovations are spread, from the frontier to the rest of our economies. These growing gaps in productivity have also been an important driver of wage inequalities in most developed countries."
Mr Tharman pointed out that even in R&D, some recent studies show that while the leading firms continue to get strong returns from R&D, most companies are not doing well in getting value from their R&D investments.
"Our own national strategies aim to grow innovation in all its dimensions - in other words, to strengthen innovation at the frontiers of knowledge as well as to spread new ideas more quickly through the rest of our economies," he said.
Ties between Singapore and France are expected to get a boost when the European Union-Singapore Free Trade Agreement (EUSFTA) comes into force.
As the first FTA concluded between the EU and an Asean member state, the EUSFTA is also a building block towards an eventual EU-Asean FTA, said Mr Tharman.
"At a time when the world continues to face heightened uncertainty, and as technological disruptions threaten to upend a whole range of industries, it is tempting for nations to question the value of remaining open to the world," said Mr Tharman. "This is not an option for Singapore."