Local companies such as CEI Contract Manufacturing (CEI) can move into offering higher-end services thanks to grants such as Spring's Capability Development Grant.
It subsidises skills and equipment upgrading for local companies and CEI has taken advantage of it to make the move from electronics manufacturing to equipment manufacturing.
Ir has teamed up with Ultratech, an American supplier of high-tech products, to manufacture the Machine Vision System, a piece of precision optical equipment.
The grant has already been used to support the training of engineers to San Jose to be trained by Ultratech, to learn skills specific to precision optical equipment.
Minister of State for Trade and Industry Teo Ser Luck said the collaboration benefitted both firms.
"They co-innovate and most importantly, the supplier, which is the Singapore company, improves its services and becomes more competitive."