Distinguished Guests

Ladies and Gentlemen

I would first like to thank the Organising Committee for very kindly inviting my wife and me to join you this evening at this dinner to celebrate 100 years of achievements in physics. In 1905, Albert Einstein published five papers, each paper announcing a discovery worthy of a Nobel Prize. Together the five papers laid down the foundations for modern physics. It is fitting that, 100 years after Einstein’s “annus mirabilis”, countries throughout the world should hold events to celebrate Einstein’s achievements and to look forward to the next 100 years in scientific research and their impact on mankind.

Positioning Singapore for Growth

This evening, I would like to talk on Singapore’s strategy for economic growth and the important role that Research and Development (R&D) will play in shaping our economic future.

The emergence and rapid growth of China and India has changed the global economic landscape dramatically. With more than one-third of the world population, huge domestic markets, and an abundant supply of skilled labour, China and India have become powerful forces shaping the global economy and investment environment. Their growth has created tremendous opportunities as well as challenges for the rest of Asia, including Singapore.

To take advantage of the new growth opportunities and to position Singapore strongly for sustainable growth, we need to leverage on our strengths and develop peaks of excellence in selected areas that will distinguish ourselves from the competition.

One critical success factor will be our ability to become a global talent hub. In a globalised knowledge economy, talent will be the key to economic success. Talent will provide the intellectual and innovation capacity to sustain the technological edge and competitive advantage of a country. Indeed, investments and economic growth will follow talent. This will be the economic paradigm of the 21^st Century.

Ministerial Committee on Research and Development

Since August last year, the Ministerial Committee on Research and Development (MCRD), which I chair, has reviewed the R&D strategies and directions for Singapore. As part of its review, the MCRD has met with a wide range of people in the public and private sectors, from overseas and local institutions, and from other Governments and policy-makers. 

The MCRD also visited five small but highly advanced economies in Europe – Switzerland, Denmark, the Netherlands, Sweden and Finland to better understand how these countries have successfully organized themselves to sustain good economic growth, and strong science and technology performance, despite their relatively small population sizes.  From the visits, the MCRD drew relevant insights which will help Singapore to gear ourselves to build a sustainable competitive edge for future economic growth.

The five countries visited by the MCRD all placed great emphasis on reinventing their economies to meet the challenges of globalisation and the rise of economies such as China and India. They have all invested heavily in Research, Development and Innovation as the key to building their long term competitive advantage.

The MCRD concluded that there is an urgent need for bold reforms to transform Singapore into an R&D-driven innovative knowledge-based enterprise economy, where we compete on knowledge and talent, in addition to efficiency and cost-effectiveness. Singapore needs to refocus its research and innovation agenda to keep up with international developments.   

To put us on the path to sustained economic growth, the MCRD recommends that Singapore’s national R&D efforts should be driven by five key strategic thrusts that would serve as broad guidelines to implement a comprehensive R&D strategy for Singapore.

I will elaborate on each of the five strategic thrusts.

Strategic Thrust 1: Provide more resources for R&D in Singapore

The MCRD recommends that Singapore needs to provide more resources for Research, Development and Innovation. Our national expenditure on R&D, including the public and private sectors, was 2.15% of GDP in 2003. This lags significantly behind other leading innovative countries such as Finland and Sweden which spend over 3% of their GDP on R&D. We must intensify our R&D efforts significantly and allocate more resources to this area. The MCRD recommends as a target that Singapore should achieve national R&D spending of at least 3% of GDP within the next 5 years.

Strategic Thrust 2: Focus on selected areas of economic importance where Singapore can be internationally competitive

The MCRD recommends that Singapore’s R&D efforts should focus on selected areas of economic importance where Singapore can be internationally competitive. As a small country, Singapore will need to focus.

We do not have the financial or manpower resources to engage in all fields of research, like the US does. We will need to concentrate our resources around a small number of strategic areas to develop a critical mass of research capabilities in industries where we can be economically competitive.

We should deepen our capabilities in existing key clusters such as electronics, chemicals and marine engineering, and biomedical sciences, by continuing to invest in R&D and manpower development. This will ensure that we gain a strong lead and maintain our competitive advantage. We also need to continually look for new growth areas to sustain our economic growth over the long-term. Two potentially interesting areas where Singapore should consider investing in are Environmental and Water Technologies, and Interactive and Digital Media.

Strategic Thrust 3: Provide a balance of investigator-led and mission-oriented research in selected strategic areas 

The MCRD recommends that Singapore’s R&D efforts should provide a balance of investigator-led and mission-oriented research in the selected strategic areas. A vibrant research environment will help us identify emerging growth areas for economic renewal. Within the selected strategic areas, Singapore must be prepared to fund a broad spectrum of research, ranging from basic investigator-led research to applied and mission-oriented research.

Mission-oriented research would continue to have a significant role. Such research would be closely integrated with our industry development and investment promotion strategies. They would contribute to our economic objectives by focusing resources to support our key industries and potential new growth areas. MTI will oversee this area with the budget for A*STAR increasing from $4 billion for FY2001-2005 to $5.4 billion for FY2006 to 2010.

We should also increase support for basic investigator-led research that is broadly aligned with the long term strategic interests of Singapore. This will help build the foundation for scientific excellence, create new knowledge, develop our own talent and attract talent from overseas to live and work in Singapore. In particular, there should be an assured level of funding for investigator-led research over a reasonable period in order to attract world-class researchers to Singapore. MOE will oversee this area working closely with our universities and other educational institutions. In this connection, MOE’s Academic Research Fund will be increased from $550 million for FY2001 to 2005 to $1.05 billion for FY2006 to 2010.

Strategic Thrust 4: Encourage even more private sector R&D

The MCRD recommends that we encourage even more private sector R&D in Singapore. This should be a key priority, as companies are best placed to decide which areas of R&D to invest in, and to align R&D investments with commercial opportunities. Indeed, the private sector is key in driving innovations and economic growth.

Our economic promotion agencies will therefore have a critical role to facilitate and catalyze private investments in research and innovation. We will need to review our incentive packages to better attract more global R&D centres and activities to Singapore. This should be supported by a high quality support framework, including a strong base of scientific and research manpower, and sophisticated intellectual property protection regulations.  

To achieve the 3% R&D target by 2010, we must leverage better on public sector funding to increase private sector research.   We should aim to eventually have two-thirds of R&D, mainly on the Development side, performed by the private sector and one-third of R&D, primarily on the Research side, performed by the public sector agencies. EDB will play a critical role in rapidly catalyzing a research and innovation driven economy, and to draw in investment projects that will complement the transformation of the economy.

Strategic Thrust 5: Strengthening the nexus between R&D and business

The MCRD recommends that we strengthen the nexus between our knowledge institutions, such as our universities and research institutes, and industry. Our institutions must improve on their ability to commercialize their research results, and have closer collaboration with industry. We should review how to strengthen our technology transfer framework, as well as how we can reach out more effectively to local enterprises -- for example, by promoting technology innovation in local enterprises through stronger co-funding frameworks between public and private sector.

In particular, our polytechnics, which have developed strong applied research and downstream capabilities and industry networks, could be encouraged to link up with industry associations to collaborate on R&D initiatives. This would help to strengthen innovation and uplift the technological and manpower capabilities of our enterprises.

Establishment of New Research Structure

            To transform the five key strategic thrusts from concept to reality, we need strong leadership to lead our drive towards a more dynamic research and innovative environment. In the Netherlands and Finland, the Prime Ministers of these two countries chair national-level councils on research and innovation - the Innovation Platform in the Netherlands and the Science and Technology Policy Council in Finland. 

The MCRD recommends that a similar high-level Council, to be called the Research, Innovation and Enterprise Council (RIEC), be established in Singapore to advise Cabinet on national research, innovation and enterprise strategies. The Council would lead the national drive to promote knowledge creation and innovation. The Council would comprise relevant Ministers, prominent captains of industry, and internationally renowned individuals from the scientific and academic community.

To support the work of the RIEC, the MCRD recommends that a National Research Foundation (NRF) be established as a new department under the Prime Minister’s Office. The NRF would report directly to the Prime Minister, and would support the RIEC’s work to drive our research and innovation transformation. The NRF’s key responsibilities will be to implement the strategic thrusts of the MCRD, and to fund longer term research in strategic areas. In addition, the Foundation will provide a coherent strategic overview so that the research of different Government agencies is coordinated within the larger national framework.

To enable the NRF to carry out its responsibilities effectively, the NRF will be provided with an assured funding stream of $5 billion for FY2006-2010. Including the increase in budget for MTI’s A*STAR, MOE’s Academic Research Fund and the new additional funding of $5 billion for the National Research Foundation, the total public sector Research and Development budget, excluding defence research, will more than double from just under $5 billion for FY2001-2005 to almost $12 billion for FY2006 – 2010.

Conclusion

The MCRD has deliberated extensively on its recommendations for Singapore’s R&D direction and strategies, and the necessary structures and resources to support Singapore’s R&D drive. The MCRD has concluded its study and has presented the above recommendations to the Government for consideration. The goal is to transform Singapore into a talent magnet for scientific and innovation excellence, and to draw on this deep well of technological capability and innovation capacity, to create a sustainable competitive advantage for Singapore’s long term economic growth. The Government will announce its decision on the MCRD’s recommendations in due course.

On this note, I wish you an enjoyable dinner and a fruitful conference.

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