SPEECH BY MR S ISWARAN, MINISTER OF STATE FOR TRADE AND INDUSTRY AT THE LAUNCH OF EXPLOIT-IP PROGRAM ON 27 MARCH 2008 AT 9AM, MATRIX, BIOPOLIS
Distinguished Guests;
Ladies and gentlemen.
Good morning.
Introduction
I am pleased to join you today at the launch of the Exploit-IP program. In this rapidly changing and increasingly connected world, innovation is a key strategy for businesses to survive. It is only through a process of disruptive change and continuous renewal that companies can hope to stay ahead of global competition.
This is especially true in Singapore. Given our scarce resources, our businesses have little alternative but to harness innovation as a key strategy to survive and flourish.We have to ascend the value chain by adopting an open mindset towards the sourcing of IP and innovations in the global market place. In short, we must promote enterprise development through Open Innovation.
Open Innovation – The Way Ahead
What is Open Innovation?Henry Chesbrough, in his book on “Open Innovation[1]”, observed that business leaders are adopting a new, “open” model of innovation. Chesbrough, who has been named a “Top 50 Innovator” by Scientific American, candidly wrote that “not all the smart people work for you. Instead useful knowledge is dispersed in companies and R&D organisations outside your enterprise and probably, in many parts of the world.”What this means is that forward-looking companies are increasingly looking outside their organisational boundaries for ideas and IP to spur new business growth. They are not constrained by the Not-Invented-Here (NIH) syndrome in their quest for innovation which is impelled by the rising cost of technology development and shorter product life cycles.
Therefore, companies and R&D organisations must embrace “Open Innovation” when it comes to IP development and management.They must not be coy about in-licensing complementary technologies developed elsewhere in order to create a more robust product.Similarly, they must unlock their untapped IP and innovations to others who might better capture the potential value.
In Singapore, I am pleased that we have Technology Partners like IBM, Faunhofer, VTT, Tohoku and Nagoya, who are prepared to collaborate with Singaporean enterprises to capture the value in their IP. These companies will be promoting their IP, innovations and R&D to Singaporean enterprises at this inaugural TechLicensing Fair. I encourage our enterprises to leverage on these technology partners’ rich industry experience, innovative efforts and market access, to create value. It will help to generate innovative products and services in the global market.
Let me cite an example of a success story of a company with good “open” IP management in its business process. Started four years ago, Haruna Pte Ltd develops paint and coating with functionality such as heat insulation and fire protection. Last year, the company acquired a licence from A*STAR for a nano technology - titanium dioxide (TiO2), to enrich its product range. With titanium dioxide, Haruna produces a self-cleaning paint that minimises resources wasted on maintenance. This new product has allowed Haruna to differentiate itself from other paint manufacturers and illustrates the advantage of tapping the right IP and technology.
Incentivising Enterprise and Innovation
This trend for open innovation is catching on rapidly in Singapore. To assist companies further, the Government recently announced several R&D tax initiatives to help our companies climb the innovation ladder. Firstly, tax deductions allowed for R&D expenditure in Singapore will be increased from 100% to 150%. This enhanced deduction means that for every $100,000 of local R&D spending, a company will be able to deduct $150,000 from its taxable income.
Secondly, a new broad-based tax allowance will be introduced to provide a further push for innovation amongst companies in Singapore, especially the SMEs. Companies will be granted R&D tax allowances each year, up to 50% of the first $300,000 of their chargeable income. This allowance can be used to defray incremental expenditure on R&D done in Singapore in subsequent years. This will provide additional resources for SMEs to invest in innovation, whatever their field of business.
Thirdly, the Government will also introduce a new incentive to help our high-tech start-ups. Turning R&D into marketable products usually takes time, during which the new company may have no taxable income. This new incentive, called R&D Incentive for Start-Up Enterprises (or RISE), will allow them to convert immediately these losses into a cash grant of up to about $20,000. The companies will get this as long as they incur at least $150,000 of expenditure during the year for R&D in Singapore. These three schemes will provide a significant incentive for all companies, especially SMEs, to undertake R&D.
A Path to Open Innovation, Exploit-IP Program
I am also pleased to announce that an Exploit-IP Program has been set up to promote Open Innovation to spur business growth. The program will encourage MNCs to unlock and promote their IP to Singaporean enterprises alongside established universities and R&D organisations, and at the same time assist local enterprises in identifying the appropriate IPs to exploit.
I understand the Exploit-IP team has actively reached out to over 30 Technology Partners across the globe and many have expressed interest to participate in the Exploit-IP Program. These Technology Partners include MNCs, renowned universities and R&D organisations in the United States, Europe and the Asia Pacific. I am pleased that many are represented here today, either participating in this inaugural TechLicensing Fair, or as observers to prepare for subsequent TechLicensing Fairs later this year.
Besides the TechLicensing Fairs, an exploit-IP web portal will also be developed under the Exploit-IP Program. The portal will feature IPs based on technology areas and not organisations. As such, local enterprises can focus their search on technologies to find a good fit.
Conclusion
The Exploit-IP Program opens up many possibilities and opportunities to spur Singapore towards an Open Innovation-driven economy. I commend Exploit Technologies for taking this bold step to create an open and vibrant IP marketplace that will fuel growth in innovation and enterprise development.
On this note, let me wish all of you a fruitful session today, scouting for innovations and new business opportunities that can grow and transform your business enterprise. Thank you.
[1]Open Innovation – The New Imperative for Creating & Profiting from Technology (HarvardBusinessSchool Press, 2003)