Focus on developing local R&D capabilities

Dyson has made it clear that its higher-value R&D roles will remain in Britain.
Dyson has made it clear that its higher-value R&D roles will remain in Britain.PHOTO: DYSON AUTOMOTIVE MANUFACTURING FACILITY

Dyson's decision to move its head office to Singapore and its earlier announcement to set up its electric car plant here smack of an outdated strategy put in place by the Economic Development Board (EDB) in 1968 (Dyson's move a sign of S'pore's attractiveness to global firms, Jan 24; and Bladeless-fan maker Dyson to make electric cars in S'pore, Oct 24, 2018).

Fifty years on, it is clear that the strategy which served us well in the past - getting multinational firms to move their manufacturing operations here, which often did not include their research and development capabilities - is no longer relevant to modern Singapore.

Global firms such as Dyson make such moves only because they stand to benefit from tax exemptions and subsidies from the Government. And when these tax exemptions and subsidies are no longer available, they will move their operations out.

That is exactly what happened to the electronics industry in Singapore, which was at one point a major electronics manufacturing hub.

We were No. 1 for semiconductor assembly and testing, and the top disk drive manufacturing location in the world.

Today, the electronics industry here has been hollowed out because we never managed to attract the integrated circuit and disk drive R&D work to the island.

This is not the case for the South Koreans and Taiwanese, who remain major players in the electronics industry because they developed their local R&D capabilities.

Dyson has made it clear that its higher-value R&D roles will remain in Britain. Years ago, Fairchild Semiconductor, National Semiconductor and Texas Instrument, among others, said the same thing.

The first generation of EDB officers did well in getting multinational companies to move their manufacturing operations to Singapore. The current generation of officers need to get multinational firms to move their higher-value R&D to Singapore, failing which they should offer the same incentives to local companies.

Developing local R&D capabilities will better serve the long-term needs of our country.

Liu Fook Thim

A version of this article appeared in the print edition of The Straits Times on February 01, 2019, with the headline 'Focus on developing local R&D capabilities'. Print Edition | Subscribe