SINGAPORE - A greater nudge is required for Singapore to become a more innovation-driven economy, said MPs on Thursday (Feb 25).
Speaking on the second day of the Budget debate, they highlighted the importance of innovation efforts for Singapore's firms to be competitive in the global economy.
Mr Gan Thiam Poh (Ang Mo Kio GRC) said that pursuing an innovation-driven economy may be the only way to reap the benefits of technology developments and enable firms to scale up to access overseas markets.
To this end, Workers' Party MP Leon Perera (Aljunied GRC) suggested a new approach to drive collaborative innovation efforts between multinational corporations (MNCs) and small and medium-sized enterprises (SMEs).
This approach would involve extending more generous incentives to MNCs which work with local partners to share their know-how and which give local firms a stake in the new investment tied to the incentive.
Such an approach is not novel and has been attempted in other countries, Mr Perera said, while noting that there are risks involved in offering such an incentive such as possibly deterring MNC investment, as the move could be seen as nativist.
But those risks can be managed by only awarding such a conditional incentive in fields where there are sufficient local firms which could make reasonably good partners to the MNC, he added.
On a similar note, fellow WP MP Gerald Giam (Aljunied GRC) highlighted that Singaporeans must ensure that their competitive spirit is directed towards the right targets and that they adopt a more cooperative mindset.
For one thing, government-linked companies could look at more ways to collaborate with SMEs and venture overseas and form local consortiums with them, which would help to sharpen Singapore's competitive edge, he said.
Mr Gan also pointed out that it is timely to explore new economic sectors. The agri-food cluster, for instance, was not developed much in the past due to land constraints. But new technologies now allow new methods of urban agriculture, such as vertical farming and new ways of fish farming, he said.
Meanwhile, Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) highlighted how the manufacturing sector will play a key part in Singapore's post Covid-19 recovery, and the Government's plan to grow the sector by 50 per cent over the next 10 years.
But while the goal is to pave the way for advanced manufacturing to form a larger part in the sector, some issues persist, he said.
Mr Saktiandi asked how digitalisation in new manufacturing companies could be accelerated beyond existing grants and programmes, and if more companies could get help to embrace digital training and technology, which would contribute to productivity.
In addition, Mr Perera acknowledged that it is an important national imperative to cultivate a core of locally based firms which can be globally competitive, to balance Singapore's dependence on multinational corporations.
However, he asked if past schemes such as the Productivity and Innovation Credit and other initiatives to support SMEs have been effective in helping Singapore achieve its goal, and called for regular and published audits of these schemes.
Such audits would uncover their effect on the long-term growth and competitiveness of the firms which used them, and help in designing better schemes, Mr Perera added.