SINGAPORE - Companies here need to continue to innovate for Singapore to successfully capture new economic opportunities in electronics and manufacturing created by advances in technology such as artificial intelligence (AI) and the Internet of Things (IoT).
Making this call on Tuesday (Jan 12), Trade and Industry Minister Chan Chun Sing encouraged companies involved in the distribution of electronic components and in wholesale trade to "chart new paths of growth through innovation".
"We also need our local hardware technology start-ups to continually innovate and develop new technologies, participate in (Singapore's) growth and improve the resilience of our manufacturing sector," he said.
Speaking at the official launch of the PlanetSpark Innovation Centre in Changi Business Park, Mr Chan cited two emerging global trends the Government is trying to address that companies can play a role in: the transformation of the electronics and advanced manufacturing sectors, and the growing need to improve the resilience of supply chains.
On the first trend, he noted that the Covid-19 pandemic has accelerated efforts to digitalise and this will continue as companies seek to overcome a shortage of manpower and minimise supply chain disruptions in the future. As a result, there is a growing demand for innovations in hardware.
This comes as the Government remains optimistic about the electronics distribution industry despite Covid-19, with Singapore exporting US$84 billion (S$112 billion) worth of electronic components - or about 10 per cent of global electronics exports - in 2019. Such components include semi-conductors and storage and memory products.
The manufacturing industry is also undergoing transformation and this is being driven by AI, IoT and large amounts of computational power, said Mr Chan.
For one thing, the global sector for IoT - in which objects collect and exchange data to help people make decisions - is set to grow to US$1.6 trillion by 2025, from US$151 billion in 2018.
"The competitiveness of our electronics and manufacturing sector will depend on the speed at which we can innovate our products and production systems with technologies such as AI and IoT," said Mr Chan.
Another trend Singapore has identified in which companies can play a part is the need to improve the resilience of the goods supply chain to keep Singapore's trade links open.
The pandemic has disrupted Singapore's supply chains, which was made worse by export restrictions imposed by other countries, said Mr Chan.
As a result, it is becoming more important for manufacturing companies all over the world to be resilient as they rethink their supply chains.
For instance, in the semi-conductors space, there has been a stronger impetus for the reshoring, regionalisation and diversification of production bases and supply chains due to geopolitical tensions.
South-east Asia and Singapore are in a good position to capture a part of this reconfiguration of supply chains, said Mr Chan, but Singapore must demonstrate its ability to keep pace with innovations and remain competitive in order to do so.
He added that initiatives such as the PlanetSpark Innovation Centre launched on Tuesday can help significantly improve the competitiveness of Singapore's electronics and advanced manufacturing sector.
Innovations from such efforts can, in the longer term, augment Singapore's technology capabilities and be marketed overseas.
For example, innovations developed here can be exported through a wide network of existing free trade agreements that Singapore has developed with trading partners as well as new digital economy agreements for digital trade flows, said Mr Chan.
To entrench Singapore in the global value chain, companies will need their own intellectual property and solutions, as well as make use of technology, to provide value-added services and innovative products "that will distinguish our manufacturing sector, for both production and distribution", he said.
The PlanetSpark Innovation Centre is an accelerator that seeks to help Singapore tech start-ups speed up deployment of their AI and IoT products and solutions in the market.
It is getting a $5 million initial investment by PlanetSpark, the entrepreneurial and strategic investment arm of Singapore electronics component distributor Excelpoint Technology.
The investment amount is contributed to PlanetSpark by Enterprise Singapore and Excelpoint.
The PlanetSpark centre is expected to help more than 30 local start-ups in the next three years, with the first few companies involved in developing solutions to address challenges in thermal sensing, facial recognition, satellite tracking and AI analytics.
The centre will have a panel of mentors from the private and public sectors to share expertise and experience with the start-ups, and can also establish partnerships with venture capital firms to provide funding to help grow start-ups with high potential.
The launch of the centre means Changi Business Park has two innovation centres after Japanese construction firm Kajima Corporation broke ground for one in August last year.
Ms Phuay Li Ying, managing director of PlanetSpark, said that many Singapore hardware start-ups face challenges in accessing technologies from industry leaders, gaining market knowledge and finding channels to enter the regional market.
"This is a gap that the PlanetSpark Innovation Centre aims to bridge," she said.
"Our ultimate objective is to have a collaborative hardware ecosystem where such start-ups can accelerate their growth and commercialisation plans, attract venture capital funding and create new possibilities for local technology innovations and economic growth."
