Singapore: Singapore 2018 Budget presents initiatives to encourage innovation
Singapore finance minister Heng Swee Keat delivered the Budget Statement to Parliament on February 19 2018. In his speech, Heng Swee Keat emphasised the importance of encouraging pervasive innovation throughout the economy and how crucial intellectual property (IP) has become for companies competing in a fast-paced business environment. To this end, the Budget Statement unveiled several initiatives such as tax deductions and funding aimed at boosting research and innovation.
To support businesses as they buy and use new solutions, existing grants supporting the adoption of pre-scoped, off-the shelf technologies will be merged into a single Productivity Solutions Grant (PSG). PSGs provide funding support of up to 70% of qualifying costs. Additionally, tax deductions on licensing payments for commercial use of IP are raised from 100% to 200% for the first S$100,000 ($76,000) of qualifying IP in-licensing costs incurred each fiscal year.
In addition, businesses building their own innovations can enjoy cheaper IP registration costs through tax deductions. Such tax deductions are enhanced from 100% to 200% for the first S$100,000 ($76,000) of qualifying IP registration costs (for example, patenting costs) incurred each year. Also, tax deductions for expenditures such as staff costs and consumables incurred on research and development activities in Singapore will be raised from 150% to 250%, capped at S$100,000 ($76,000) per fiscal year and will be available from 2019 to 2025.
Also, to assist businesses in finding partners to co-create solutions, the government will pilot a virtual crowdsourcing platform called the Open Innovation Platform (OIP) where companies can list specific challenges that can be addressed by digital solutions. The OIP matches companies seeking solutions for their problems with info-communications and technology (ICT) firms or research institutes which have appropriate expertise to co-develop solutions.
The government also seeks to harness Singapore's national research capabilities to enhance its global economic competitiveness. The National Research Foundation (NRF) and Temasek Holdings will launch a S$100 million ($76 million) investment venture called the NRF-Temasek IP Commercialisation Vehicle. This venture will bring together Temasek's global investment networks and NRF's connections with the local research and development community to grow companies that generate IP from publicly funded research.
Finally, in a bid to drive greater adoption of digital technologies, automation and robotics, the government will launch an Aviation Transformation Programme (ATP) and a Maritime Transformation Programme (MTP) this year to strengthen the nation's status as an air and sea hub. These programmes allow Singapore's airport and seaport to become platforms for companies to develop, test and use new technologies. The government further provides funding of up to S$500 million ($380 million) for these two programmes with additional matching investments from industry partners.
The launch of these initiatives by the Singapore government during 2018 and 2019 is a welcome boost for businesses and an incentive for increasing innovation by providing funding support for research projects and IP acquisition.
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