SINGAPORE's apex business chamber is calling on the government to set up a one-stop government agency to look into how local enterprises can innovate, as the country looks for new growth engines to drive a transitioning economy.
The Singapore Business Federation is proposing that certain public organisations, including the National Research Foundation (NRF), Economic Development Board (EDB), Agency for Science, Technology and Research (A*Star) and Spring Singapore, help create such an agency.
Such a body would be the next major step in boosting Singapore's research and development environment, which has yet to see meaningful application of R&D to create value for the economy.
"If you ask me (about efforts so far), it's not A-star, I think it's a B-plus," said SBF chief executive officer Ho Meng Kit at a talk on Tuesday, after sharing SBF's views on how local companies can cope with Singapore's economic restructuring.
The Committee on the Future Economy (CFE), a high-level panel tasked with charting Singapore's economic direction, will be looking at the roles that value-creation and internationalisation have in the economy, Finance Minister Heng Swee Keat had said previously. He is also chairman of the CFE.
On Tuesday, economists and business leaders, including Mr Ho, shared their views on value-creation and internationalisation with more than 200 attendees at the Think Big Convention 2016 on how local companies can cope with Singapore's economic restructuring. The event was jointly organised by The Business Times and Canon.
SBF had previously put out a position paper that looked at what needs to be done to build a vibrant Singapore.
One of its recommendations was to create a unit "to provide financing, acquisition, valuation and go-to-market services" so that local companies can create to leverage the use of intellectual property (IP) rights to generate greater value.
On Tuesday, Mr Ho told BT that the new agency that was proposed at the talk is a further development from what was stated in the position paper. The agency will help direct public funds into R&D in the private sector.
Local firms can thus gain more access to public R&D funds, which have mainly been channelled to multinational corporations thus far.
These organisations can also involve key stakeholders such as research institutes, famous researchers and licensing agencies for intellectual property (IP) rights in their endeavour to build up R&D capabilities in the private sector.
Mr Ho said that he would be putting this idea across to Mr Heng and the CFE.
In 2014, R&D expenditure of small and medium-sized enterprises (SMEs) rose 38 per cent to a new peak of S$800 million, according to A*Star.
This means that smaller firms led 2014's growth in private-sector spending on R&D.
But there were still limits on how such expenditure by SMEs can be used wisely.
For example, many SMEs turn to universities to collaborate on R&D. "But the pace and depth of R&D is sometimes not deep enough, because they (students) are still learning too," said Association of Small and Medium Enterprises president Kurt Wee, who was also a panellist at the event.
SMEs also face difficulties in understanding what R&D grants are available to them, added Mr Wee.
Also discussed at the talk was helping firms to internationalise.
Faced with a lack of resources and labour, local firms should be encouraged to venture overseas, and SBF members have reflected that smaller companies need more help in venturing overseas, said Mr Ho.
Ultimately, venturing into overseas markets and promoting innovation would be crucial to helping grow Singapore's economy, said CIMB private bank economist Song Seng Wun, who also spoke at the event.
These two approaches will help Singapore overcome slower population growth and low productivity that drag on economic growth, he said.
"While we have challenges on the labour and productivity side, we still have opportunities in the region, whose growth will likely do better than the world's."
This article was first published on March 23, 2016.
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