A*Star surpasses 5-year targets; industry R&D spend exceeds S$1.6b

Singapore

THE Agency for Science, Technology and Research (A*Star) on Monday unveiled an impressive report card for RIE2015 (research, innovation and enterprise 2015), the five-year plan to boost innovation which ended on March 31, 2016.

A*Star, the nodal agency for research and development (R&D) in Singapore, had been involved in 8,965 industry projects over the five-year period, almost six times that of the previous five-year tranche and significantly more than the initial RIE2015 target of 1,726. This has resulted in more than S$1.6 billion in industry R&D spending. The original target for spending was S$830 million.

The A*Star statistics reaffirm the fact that Singapore is an attractive R&D destination for overseas companies. Out of the 8,965 projects, 55 per cent were with multinational corporations (MNCs) and they represented 90 per cent of the S$1.6 billion R&D spend. Top global companies such as Applied Materials, P&G, Rolls-Royce, Nestle and Halliburton are collaborating with A*Star on cutting-edge R&D in Singapore, the agency said.

A*Star also signed 1,030 licensing agreements over the past five years and out of these 70 per cent were signed with local small and medium enterprises (SMEs).

Prime Minister Lee Hsien Loong had announced early this year an allocation of S$19 billion for RIE2020. For RIE2015, the government had allocated S$16.1 billion.

Giving an overview of the R&D landscape in Singapore, A*Star chairman Lim Chuan Poh said that the agency recognised that Singapore's future rests in strengthening local companies for greater growth. "A*Star has developed a range of capability-building initiatives to help equip them and sharpen their competitive edge. For every 100 industry projects, 45 are conducted with local enterprises, of which 80 per cent are with SMEs."

He added that Singapore's R&D capabilities remain an attractive value proposition for MNCs and "we continue to partner multinationals such as P&G and Rolls-Royce to anchor high-value investments, create good jobs and thereby stimulate the growth of various industry sectors.

"Despite slowing global economic growth and economic shocks, industry projects with MNCs continued to grow throughout RIE2015, leading to a total of 4,921 projects."

In 2014, the expenditure on R&D by MNCs was S$3.56 billion which grew at a compound annual growth rate (CAGR) of 6 per cent from S$2.81 billion in 2010.

He added that A*Star has played a key role in developing Singapore's entrepreneurial ecosystem, seeding more than 70 startups, which have attracted more than S$90 million in follow-on funding in RIE2015.

Data released by A*Star shows just how far Singapore has come in terms of R&D spending. In 1990, the overall R&D spending was S$570 million, with public-sector expenditure on R&D being S$260 million and private-sector spending at S$310 million. This grew at a CAGR of 11.9 per cent to S$8.5 billion in 2014, out of which the private sector contributed S$5.22 billion and the public sector S$3.3 billion.

A*Star managing director Raj Thampuran said that large local enterprises (LLEs) such as ST Electronics, Sembcorp Industries and ST Aerospace had upped their R&D investment significantly in RIE2015 as opposed to the previous five-year tranche. From S$631 million R&D spending in 2010, the LLEs spent S$871 million in 2014 with a CAGR of 8.4 per cent during the period.

SMEs have also been quite active on the R&D front over the period. From S$501 million spent on R&D in 2010, SME spending grew at a CAGR of 12.2 per cent to S$795 million in 2014.

Dr Thampuran noted that since 2013, A*Star has spearheaded a Technology Adoption Plan (TAP) to move local enterprises up the value chain. He added that TAP has supported more than 1,800 technology adopters. Giving an example, he said, building and civil engineering contractor Koh Brothers has used the RFID-enabled structural steel tracking inventory management system developed by the Singapore Institute of Manufacturing Technology to register annual savings of S$58,700 and reduced inventory tracking time by 98 per cent per month. He added that A*Star has seconded 339 research scientists and engineers (RSE) to 164 SMEs over the five-year period.

The A*Star official noted that the number of RSE jobs in 2014 stood at 32,835, up from just 4,329 in 1990.

Mr Lim noted that different countries are increasingly looking to R&D as part of their strategy to remain competitive and the formulas for these RIE systems are similar around the world. "It is important for us to be differentiated. Singapore's RIE system was developed with a view to transform Singapore into a knowledge-based, innovation-driven economy."

He added that the country's attractiveness is its small size and enabling infrastructure, such as one-north where physical proximity creates a very conducive environment for spontaneous collaborations across disciplines.

One-north is home to 250 leading companies and global institutions, with five institutes of higher learning and corporate universities, 41 incubators with over 600 startups and 16 world-class public research institutes, which collectively create about 40,000 jobs. The rich ecosystem has spawned many collaborative projects in the biomedical sciences, information and communications technology, the physical sciences and engineering, Mr Lim added.