SINGAPORE: A slew of measures, including tax changes and the set-up of a new virtual crowd-sourcing platform, has been announced in Budget 2018 to support more firms to innovate.
Finance Minister Heng Swee Keat, in his Budget statement in Parliament on Monday (Feb 19), also unveiled S$600 million worth of new initiatives, alongside an expansion in the National Robotics Programme (NRP), aimed at harnessing the country’s national research capabilities.
HELPING FIRMS INNOVATE
There will be more support for firms to innovate across the entire value chain, according to Mr Heng.
First, to help businesses buy and use new solutions, existing grants supporting the adoption of pre-scoped, off-the shelf technologies will be streamlined into a single Productivity Solutions Grant (PSG).
The PSG will provide funding support of up to 70 per cent of qualifying costs. Businesses can apply for the new grant through the Business Grants Portal (BGP), which will provide a list of supportable equipment and technology solutions relevant for their sectors, from April this year.
The tax deduction on licensing payments for the commercial use of intellectual property (IP) will also be raised to 200 per cent, capped at S$100,000 of licensing payments per year.
This comes as the expiry of the Productivity and Innovation Credit (PIC) scheme will revert the tax deduction on licensing payments to 100 per cent for Year of Assessment 2019 and beyond, said Mr Heng.
The cap will also ensure that smaller businesses will benefit more from this measure, he added.
Next, to support businesses to build their own innovation, the tax deduction for IP registrations fees will be doubled to 200 per cent. This will be capped at S$100,000 of IP registration fees per year.
The tax deduction for qualifying expenses incurred on research and development (R&D) done in Singapore will also be raised to 250 per cent, from 150 per cent. The change will take effect from YA2019 to YA2025.
Lastly, to help businesses find partners to co-create solutions, a virtual crowd-sourcing platform called the Open Innovation Platform will be piloted this year.
This will be a platform for companies to list specific challenges that can be addressed by digital solutions, said Mr Heng. They will then be matched with info-communications and technology (ICT) firms and research institutes to co-develop solutions.
HARNESS NATIONAL RESEARCH EFFORTS
More will also be done to harness Singapore’s national research capabilities so as to enhance the country’s economic competitiveness.
For one, at least S$100 million will go into a joint venture between the National Research Foundation (NRF) and Temasek Holdings.
Called the NRF-Temasek IP Commercialisation Vehicle, it aims to “bring together Temasek’s global investment networks and NRF’s connections with the Singapore R&D community” so as to “grow companies that draw on IP from publicly-funded research”, said Mr Heng.
The Government will invest S$50 million into the joint venture, with the remaining half borne by Temasek.
An Aviation Transformation Programme (ATP) and a Maritime Transformation Programme (MTP) will also be launched this year to strengthen Singapore’s status as an air and sea hub.
The Government will provide support of up to S$500 million for the two programmes, with additional matching investments expected from industry partners.
Through these programmes, Singapore’s airport and seaport will become platforms for companies to develop, test and use new technologies, said Mr Heng. The solutions that emerge can be rapidly adopted in other parts of Singapore, or even exported overseas, he added.
In addition, the National Robotics Programme, first launched in 2016, will be expanded to encourage wider use of robotics in the built environment sector, particularly in construction.
“We have built a strong research and knowledge base in our universities and A*STAR institutes, which provides a solid foundation for an innovative economy,” said Mr Heng, who added that public sector R&D spending has been sustained at 1 per cent of GDP annually to maintain this competitive edge.
“We have various programmes to translate our public sector research efforts into commercially viable applications, and we will build on these,” he added.
The fostering of pervasive innovation in the economy was mentioned by Mr Heng in his Budget statement as one of the three key enablers that lay the foundation for all Industry Transformation Maps (ITMs) and must be strengthened.