Singapore’s Minister for Finance, Mr Heng Swee Keat
presented the Government’s FY18 Budget today. In
the Budget speech Minister Heng highlighted three major shifts in the coming
decade that Singapore needs to prepare for.
First is the shift
in global economic weight towards Asia, in view of China’s Belt
and Road initiative, India’s economic reforms and a rapidly growing middle class
in ASEAN countries, in conjunction with Brexit and the US’ recent tax changes and review of trade pacts. The second major
shift is the emergence of new technologies, leading to the rise of Industry 4.0
and firms competing increasingly not on physical assets, but on intangible
assets, such as intellectual property (IP), data, and user networks. The final
shift Minister Heng talked about is ageing, driving a significant increase in
healthcare and social expenditure and a shrinking resident workforce.
Interactions between these three shifts are expected to
create opportunities as well as challenges. For instance, technology would help
older workers to stay productive, and assist caregivers to care for seniors. At
the same time, the rapid pace of technological change may lead to older workers
To benefit from the opportunities and address the
challenges, the Budget includes a number of measures directed towards developing
a more vibrant and innovative economy, along with building a smart, green and
liveable city, fostering a caring and
cohesive society and planning ahead for a fiscally sustainable and secure future.
The launch of the Industry Transformation Maps (ITMs; 21 of
the proposed 23 ITMs have been launched) is a start towards development of an innovative
economy. Minister Heng said that a more cluster-based
approach will be adopted for the next phase of the ITM journey, to leverage synergies
and strengthen linkages across multiple industries. Three key enablers form the
foundation of the ITMs: innovation, capabilities and partnerships.
Helping firms innovate
The Government will support
more firms to innovate across the entire value chain– in buying new
solutions, building their own, or partnering others to co-innovate.
The Government will streamline
existing grants supporting the adoption of pre-scoped, off-the-shelf
technologies into a single Productivity Solutions Grant (PSG). In addition, the
tax deduction on licensing paymentsfor the commercial use of
intellectual property (IP) will be raised. With the expiry of the Productivity
and Innovation Credit (PIC) scheme, the tax deduction on licensing payments has
reverted to 100% for YA2019 and beyond. This will be raised 200%, capped at S$100,000
of licensing payments per year.
businesses to build their own innovations, the tax deduction for IP
registration fees will be increased from 100% to 200%, to help firms protect
their intangible assets. This will be capped at S$100,000 of IP registration
fees per year. The tax deduction for qualifying expenses incurred on R&D done
in Singapore is also being raised from 150% to 250%.
The Government is
also planning to pilot an Open Innovation Platform this year to help businesses
find partners for co-creation of solutions. This is a virtual crowd-sourcing
platform, where companies can list specific challenges that can be addressed by
digital solutions. They will then be matched with info-communications and
technology (ICT) firms and research institutes, to co-develop solutions.
Micallef, vice president, Asia Pacific & Japan, Cloudera, commented, "The Open
Innovation Platform (OIP) initiative directly tackles the challenges faced by
businesses that are keen to embark on a digital transformation journey but are
constrained by current resources and shrinking budgets. As Singapore strives
for a digital economy, businesses are expected to ride the wave of disruptive
technologies to stay ahead. For example, Financial Services Institutions (FSIs)
and telecommunications service providers are increasingly tapping on the
colossal volumes of data to extract rich insights that can help deliver
enhanced and personalised offerings to customers. OIP is a much needed
collaborative industry ecosystem that can offer businesses new ways to stay
relevant and competitive without overwhelming existing resources. By tapping on
external expertise and solutions delivered through OIP, businesses are given a
much needed boost to accelerate their digital transformation. The OIP can also
empower companies to invest in the latest technologies such as machine
learning, analytics, and cloud to better prepare for the future economy. This
initiative is a great example of how public and private sectors can come
together to collectively achieve Singapore's vision of building a Smart Nation
New NRF-Temasek IP Commercialisation Vehicle
Government has taken a number of initiatives in recent years to translate public
sector research efforts into commercially viable applications.
This year the
National Research Foundation (NRF) and Temasek will launch an NRF-Temasek IP
Commercialisation Vehicle. The new investment venture will bring together
Temasek’s global investment networks and NRF’s connections with the Singapore
R&D community, to grow companies that draw on IP from publicly-funded
research. At least S$100 million will be invested into this joint venture – S$50
million from the Government, and at least S$50 million from Temasek.
S$500 million for Aviation and Maritime Transformation
To strengthen Singapore’s
status as an air and sea hub, an Aviation Transformation Programme (ATP) and a Maritime
Transformation Programme (MTP) will be launched during 2018.
programmes, Singapore’s airport and seaport will become platforms for companies
to develop, test and use new technologies. These solutions can then be rapidly
adopted in other parts of Singapore, or even exported overseas. The Government will
provide support of up to $500 million for the two programmes, with additional
matching investments expected from industry partners.
Expanded National Robotics Programme
To improve labour
productivity, the Government will expand the National Robotics Programme (NRP),
to encourage wider use of robotics in the built environment sector,
particularly in construction.
Robotics Programme was announced in 2015 to develop robotics technologies for applications
in various industry verticals for addressing national challenges such as an
ageing population. It received
an infusion of S$450 million in 2016 for scaling up over the next three years.
More targeted support to help firms build capabilities
will provide integrated support to companies, for internationalisation as well
as the development of other capabilities, so as to help them compete better
both locally and abroad.
IE’s Global Company
Partnership grant will be combined with SPRING’s Capability Development Grant,
to form an integrated Enterprise Development Grant (EDG). The EDG will provide
up to 70% co-funding for companies to build a range of capabilities.
The Government will enhance
the Double Tax Deduction for Internationalisation (DTDi) to further support
firms to internationalise. The amount of expenses that can qualify for the DTDi
without prior approval, will go up from $100,000 to $150,000 per year of
assessment, effective from YA2019.
This year, the
Government is studying, with the Singapore Business Federation (SBF) and other
industry partners, the development of a nationwide e-invoicing framework.
This can help companies improve productivity and enhance cash flow.
S$145 million for Tech Skills Accelerator over next 3
Since the Government
launched the Tech Skills Accelerator (TeSA)
in 2016, over 27,000 training places have been taken up or committed. TeSA
offers various programmes to support current information and communications
technology (ICT) professionals and non-ICT professionals to upgrade and acquire
new skills and domain knowledge that are in demand, and to stay competitive and
meet the challenges of a fast-moving digital landscape.
TeSA will be
expanded into new sectors like manufacturing and professional services, where
digital technologies are increasingly important. TeSA will also support more
people to learn emerging digital skills, such as in data analytics, artificial
intelligence, the Internet of Things and cybersecurity.
An additional S$145
million is being set aside for TeSA over the next three years.
JY Pook, Senior Vice President, Asia Pacific, Tableau Software, welcomed the announcement saying, "Data analytics has been highlighted as one of the most sought after
skills in a market where the demand for talent with technical capabilities is
increasing. At the same time, businesses are undoubtedly realising the value in
harnessing insights from their data to make better decisions – but these
decisions need to be quick to keep up with the pace of change today. The demand
points towards a need for analytics at scale; where more people, not just data
specialists, are able to use self-service analytics to make faster decisions
and have a higher impact at their jobs. Providing the right data tools and
skills will make Singapore’s workforce more productive, while businesses will
be able to keep pace with the constantly evolving business landscape."
Integrated Enterprise Development Grant to help firms
With the merger
of SPRING and IE Singapore into Enterprise Singapore in March, IE’s Global
Company Partnership grant will be combined with SPRING’s Capability Development
Grant, to form an integrated Enterprise Development Grant. The EDG will provide
up to 70% co-funding for companies to build a range of capabilities.
Integrated PACT scheme to support partnerships
The Government will continue
to encourage Singapore companies to form strong partnerships, both locally and
abroad. Various partnership support measures will be integrated into a single PACT
companies can receive up to 70% co-funding, for projects undertaken in
partnership with others.
The Government is setting aside S$800 million over the
next three years for PACT, the Productivity Solutions Grant and the EDG.
S$250 million for 3 urban solutions and sustainable
development R&D programmes
The Cities of Tomorrow
programme was launched in 2017 with an allocation of S$150 million to drive
innovation in urban development. The Programme focuses on three key R&D
areas: Advanced Construction and Resilient Infrastructure; creating New Spaces;
and providing a high-quality and sustainable living environment for all
Last year, the National
Environment Agency (NEA) launched the Closing the Waste Loop research funding
initiative to boost Singapore’s R&D capabilities in developing solutions to
extract value and resources from key waste and residue streams including
plastics, food, electrical and electronic products, and incineration ash. The
initiative is supported by the NRF and the Ministry of National Development
(MND) under the Research, Innovation and Enterprise 2020 Plan (RIE2020), with a
funding of S$45 million under the Urban Solutions and Sustainability (USS)
This year, Singapore
will embark on Energy Grid 2.0. Grid 2.0 refers to the next-generation grid
system that will transform how energy is managed by consolidating gas, solar
and thermal energy into a single intelligent network that is more efficient,
sustainable and resilient.
This builds on
Singapore’s past investments in smart
photovoltaics, as well as various energy efficiency and demand management
solutions to address Singapore’s unique energy challenges, and also grow the
base of capabilities.