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| Source: Singapore Budget website. View of Singapore. |
"Digitalisation, innovation and highly skilled workers will enable cities and regions to prosper while staying open and connected to the world," he said.
Retail was singled out among the sectors that are facing structural shifts, and advised to embrace technology to help transform business models. Heng suggested retailers leverage digital capabilities to access new markets through online marketing, and e-commerce platforms.
Budget 2017 provides both near term support measures, with a targeted approach to address sector-specific needs, and also addresses the Committee on the Future Economy’s seven mutually reinforcing strategies for the medium to longer term. It includes measures to strengthen corporate capabilities, particularly in promoting digitalisation, with a new SMEs Go Digital Programme, and strengthened capabilities in data and cybersecurity.
There are also measures to promote innovation and scaling up globally, including improving access to intellectual property (IP), a new Tech Access Initiative, a new International Partnership Fund, and financing support for local companies with overseas infrastructure projects.
Heng spent some time on how the government will action the recommendations of the Committee for the Future Economy. "Technology is reshaping businesses, jobs and lifestyles across the world. We must spot the opportunities in the digital economy, and make the most of our strengths as a nimble, well-educated, tech-savvy society," he said.
"As we mature as an economy, we must compete on the quality and novelty of our ideas, and our ability to create value. We need to build a strong innovation and enterprise engine, to complement our traditional strengths in efficiency and speed."
Elaborating further on the technology strategy, Heng said that digital technology, embraceing innovation, and scaling up should be the hallmarks for the year, and introduced new initiatives to help enterprises "build capabilities to go international, go digital, and to innovate". "Digital technology has unique potential to transform businesses, large and small, across the economy. The first way to strengthen our enterprises, especially small and medium sized enterprises (SMEs), is to help them adopt digital solutions," Heng said.
More digital help for SMEs
A new SMEs Go Digital Programme has been created to help SMEs build digital capabilities, to be helmed by the Info-communications Media Development Authority (IMDA) in collaboration with SPRING and other sector lead agencies. The SMEs Go Digital Programme will have three components, Heng said:
+Step-by-step advice on the technologies to use at each stage of their growth through sectoral Industry Digital Plans. "We will start with sectors where digital technology can significantly improve productivity. These include retail, food services, wholesale trade, logistics, cleaning and security," Heng said.
+In-person help at SME Centres and at a new SME Technology Hub to be set up by IMDA. SMEs will be able to ask about off-the-shelf technology solutions that are pre-approved for funding support, or connect to info-communications and technology (ICT) vendors and consultants. "The more digitally advanced firms can get specialist advice from the SME Technology Hub," Heng added.
+Advice and funding support for SMEs that are ready to pilot emerging ICT solutions. "We will work with consortiums of large and small firms to help them adopt impactful, interoperable ICT solutions, to level up whole sectors," Heng promised.
Data and security
Singapore also plans to level up on capabilities in data and cybersecurity. "With increased digitalisation, data will become an important asset for firms, and strong cybersecurity is needed for our networks to function smoothly. The Cyber Security Agency (CSA) of Singapore will work with professional bodies to train cybersecurity professionals," Heng said.
The Singapore government is also making it easier to tap into expertise at existing research institutes. Heng noted that A*STAR, which already works with firms to identify how technology can help them innovate and compete, will expand its efforts to support 400 companies over the next four years.
Additionally, Intellectual Property Intermediary, a SPRING affiliate, will be working with companies to match them with suitable IP. "It will work with the Intellectual Property Office of Singapore (IPOS) to analyse and bundle complementary IP from Singapore and overseas," Heng said.
A new SMEs Go Digital Programme has been created to help SMEs build digital capabilities, to be helmed by the Info-communications Media Development Authority (IMDA) in collaboration with SPRING and other sector lead agencies. The SMEs Go Digital Programme will have three components, Heng said:
+Step-by-step advice on the technologies to use at each stage of their growth through sectoral Industry Digital Plans. "We will start with sectors where digital technology can significantly improve productivity. These include retail, food services, wholesale trade, logistics, cleaning and security," Heng said.
+In-person help at SME Centres and at a new SME Technology Hub to be set up by IMDA. SMEs will be able to ask about off-the-shelf technology solutions that are pre-approved for funding support, or connect to info-communications and technology (ICT) vendors and consultants. "The more digitally advanced firms can get specialist advice from the SME Technology Hub," Heng added.
+Advice and funding support for SMEs that are ready to pilot emerging ICT solutions. "We will work with consortiums of large and small firms to help them adopt impactful, interoperable ICT solutions, to level up whole sectors," Heng promised.
Data and security
Singapore also plans to level up on capabilities in data and cybersecurity. "With increased digitalisation, data will become an important asset for firms, and strong cybersecurity is needed for our networks to function smoothly. The Cyber Security Agency (CSA) of Singapore will work with professional bodies to train cybersecurity professionals," Heng said.
Driving innovation
The Singapore government is also making it easier to tap into expertise at existing research institutes. Heng noted that A*STAR, which already works with firms to identify how technology can help them innovate and compete, will expand its efforts to support 400 companies over the next four years.
Additionally, Intellectual Property Intermediary, a SPRING affiliate, will be working with companies to match them with suitable IP. "It will work with the Intellectual Property Office of Singapore (IPOS) to analyse and bundle complementary IP from Singapore and overseas," Heng said.
A*STAR's Headstart Programme, which allows
SMEs that co-develop IP with A*STAR to enjoy royalty-free and exclusive
licences for the first 18 months, has been extended to the first 36
months.
"We will also support companies in the use of advanced machine tools for prototyping and testing, which may require costly specialised equipment. A*STAR will provide access to such equipment, user training and advice under a new Tech Access Initiative," Heng said.
"We will also support companies in the use of advanced machine tools for prototyping and testing, which may require costly specialised equipment. A*STAR will provide access to such equipment, user training and advice under a new Tech Access Initiative," Heng said.
Expanding internationally
A new S$600 million International Partnership Fund has been set up to help companies grow overseas. The fund will co-invest with Singapore-based firms to help them scale up and internationalise.
IE Singapore’s Internationalisation Finance Scheme will be enhanced. The government will catalyse private cross-border project financing to smaller Singapore-based infrastructure developers by co-sharing the default risk of lower quantum, non-recourse loans. "We will also catalyse financing for projects undertaken by larger firms in higher-risk developing markets, by providing a share of the needed sovereign risk insurance coverage. Overall, these enhancements will enable more companies to take on more overseas projects," Heng said.
A new S$600 million International Partnership Fund has been set up to help companies grow overseas. The fund will co-invest with Singapore-based firms to help them scale up and internationalise.
IE Singapore’s Internationalisation Finance Scheme will be enhanced. The government will catalyse private cross-border project financing to smaller Singapore-based infrastructure developers by co-sharing the default risk of lower quantum, non-recourse loans. "We will also catalyse financing for projects undertaken by larger firms in higher-risk developing markets, by providing a share of the needed sovereign risk insurance coverage. Overall, these enhancements will enable more companies to take on more overseas projects," Heng said.
Ecosystem for global innovation
Innovation and growing internationally were also the seeds for the Global Innovation Alliance, which is designed to help Singaporeans gain overseas experience, build networks, and collaborate with their counterparts in other innovative cities. The Global Innovation Alliance will have three programmes:
+The Innovators Academy will enable tertiary students to build connections and capabilities overseas. The academy builds on the NUS Overseas College programme, which connects students to startups overseas. The Innovators Academy will go further by making these opportunities available to students from other Singapore universities. "We aim to grow the annual intake of students from 300 to 500 over the next five years," Heng said.
+Innovation Launchpads will be set up in selected overseas markets, enabling entrepreneurs and business owners to connect with mentors, investors and service providers.
+Welcome Centres are inbound, allowing foreign companies to link up with Singapore partners to co-innovate, test new products in Singapore, and expand in the region.
"The Global Innovation Alliance is a novel collaboration among our educational institutions, economic agencies and businesses. In the initial phase, we will launch the Alliance in Beijing, San Francisco and various ASEAN cities," Heng said.
Innovation and growing internationally were also the seeds for the Global Innovation Alliance, which is designed to help Singaporeans gain overseas experience, build networks, and collaborate with their counterparts in other innovative cities. The Global Innovation Alliance will have three programmes:
+The Innovators Academy will enable tertiary students to build connections and capabilities overseas. The academy builds on the NUS Overseas College programme, which connects students to startups overseas. The Innovators Academy will go further by making these opportunities available to students from other Singapore universities. "We aim to grow the annual intake of students from 300 to 500 over the next five years," Heng said.
+Innovation Launchpads will be set up in selected overseas markets, enabling entrepreneurs and business owners to connect with mentors, investors and service providers.
+Welcome Centres are inbound, allowing foreign companies to link up with Singapore partners to co-innovate, test new products in Singapore, and expand in the region.
"The Global Innovation Alliance is a novel collaboration among our educational institutions, economic agencies and businesses. In the initial phase, we will launch the Alliance in Beijing, San Francisco and various ASEAN cities," Heng said.
Industry Transformation Maps (ITMs)
ITMs, announced last year, bring together various stakeholders – TACs, unions, and the government – to align efforts around sector trasnformation. Six of the projected ITMs for 23 sectors have already been launched. The remaining 17 are expected to debut in FY2017.
Heng emphasised that the ITMs are living plans that can be changed. "Where we spot opportunities, including ones that do not fit any existing industry, we will adapt our ITMs to seize them. We must also maximise synergies between related ITMs, such as between the food services and hotel industries," he said.
Heng mentioned Singtel as a shining example of what can be done for skills development both internally and for the industry as a whole. "Singtel not only trains its IT services employees to transition into cyber security roles, it also works with CSA and the IMDA on the Cyber Security Associates and Technologists programme to develop mid-career talent for the broader cyber security industry. Singtel has also launched its Cyber Security Institute to train technical professionals, management and boards to better handle cyber breaches. It also engages students through internship programmes," he said.
ITMs, announced last year, bring together various stakeholders – TACs, unions, and the government – to align efforts around sector trasnformation. Six of the projected ITMs for 23 sectors have already been launched. The remaining 17 are expected to debut in FY2017.
Heng emphasised that the ITMs are living plans that can be changed. "Where we spot opportunities, including ones that do not fit any existing industry, we will adapt our ITMs to seize them. We must also maximise synergies between related ITMs, such as between the food services and hotel industries," he said.
Heng mentioned Singtel as a shining example of what can be done for skills development both internally and for the industry as a whole. "Singtel not only trains its IT services employees to transition into cyber security roles, it also works with CSA and the IMDA on the Cyber Security Associates and Technologists programme to develop mid-career talent for the broader cyber security industry. Singtel has also launched its Cyber Security Institute to train technical professionals, management and boards to better handle cyber breaches. It also engages students through internship programmes," he said.
Regulations to keep pace with digital change
Heng noted that the government is transforming in tandem with industry. The Monetary Authority of Singapore (MAS) has announced a simplified regulatory framework tailored to the needs of venture capital firms, he said. "This will give them greater flexibility, making Singapore more conducive to venture capital investment, thereby enhancing the supply of financing for startups," he explained.
Heng also said more space for innovation is facilitated through a concept called regulatory sandboxing. "This involves setting boundaries within which some rules can be suspended, to allow greater experimentation," he said. "The Land Transport Authority (LTA) has done this with self-driving vehicles, setting out specific zones where they can be tested on roads. Likewise, MAS has set up a regulatory sandbox for fintech."
"Regulatory agencies will further explore how we can facilitate innovation. For instance, our regulators can make their risk assessments for new products and services more swift and effective. A good example is the Health Sciences Authority (HSA), which will be setting up a priority review scheme to evaluate new and innovative medical devices. This will accelerate the commercialisation process and make Singapore a preferred location to launch these devices," he said.
The government will also top up the National Research Fund
by S$500 million, to support innovation efforts, and the National
Productivity Fund by another S$1 billion, to support industry
transformation. "All in, we are putting aside S$2.4 billion over the
next four years to implement the CFE strategies. This will be over and
above the S$4.5 billion set aside last year for the Industry Transformation Programme," Heng said.
"No surprises" was Lennon Lee, Entrepreneurial & Private Clients Tax Leader, PwC Singapore's reaction. "Budget 2017 is part two to the CFE recommendations, where government support is available, only if the SMEs take up technology that increases productivity, embrace innovation and digitisation with a move of going international," he said.
"'Go Digital' initiatives must be enforced not only by SMEs but by all businesses across sectors. Singapore needs to be two steps ahead if it wants to position itself as the digital hub for the region," added Sunil Agarwal, Technology, Media & Telecommunications Tax Leader, PwC Singapore.
"No surprises" was Lennon Lee, Entrepreneurial & Private Clients Tax Leader, PwC Singapore's reaction. "Budget 2017 is part two to the CFE recommendations, where government support is available, only if the SMEs take up technology that increases productivity, embrace innovation and digitisation with a move of going international," he said.
"'Go Digital' initiatives must be enforced not only by SMEs but by all businesses across sectors. Singapore needs to be two steps ahead if it wants to position itself as the digital hub for the region," added Sunil Agarwal, Technology, Media & Telecommunications Tax Leader, PwC Singapore.
Tom Beach, Country MD, Singapore, Telstra, commented that it is encouraging that the Budget announcement and CFE report seek to tackle the challenges which Telstra has also identified in recent research. Telstra's research showed that Singapore is a leader in Asia when it comes to the quality of its digital infrastructure, but also gaps in digital skills and digital partnerships.
"Reflecting the fact that digital skills are becoming central to business success and there is global competition for talent, initiatives to cultivate digital literacy in the workplace and link people with jobs, like the enhancements to the National Jobs Bank, are important. To be truly successful, Government programmes need to be complemented by the private sector continuing to actively train their staff to maximise the benefits from using the latest technologies," he said.
"In addition to training, government- and corporate-driven innovation hubs can also play a role in developing talent and opening up pathways for new businesses to emerge. To grow the country’s digital economy, we trust that Singapore will continue to pursue policies that make it easier for high-growth startups to base their operations here and export their innovative solutions globally."
Beach shared that Telstra believes an era of “co-corporation” is emerging. "Digital partnerships accelerate expansion into new markets and customer segments, facilitate the development of new products and services, and augment existing capabilities. With the newly announced Global Innovation Alliance, Singaporeans – through the Innovators Academy, Innovation Launchpads and Welcome Centres – can now formally gain overseas experience, build networks and collaborate with counterparts in other innovative cities," he said.
Interested?
More
details of the new or enhanced initiatives will be shared by the
various ministries in charge at the Commitee of Supply debates, which
are typically held soon after the Budget announcement.
Read the full Budget 2017 speech or watch the Budget 2017 delivery video (over 1.5 hours)
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