Frost and Sullivan

Case Challenge 2013

Han Wee. Jonathan. Marc.National University of Singapore

DID YOU KNOW?

The GDP per capita of Panacea stands at

US$1050 – in the same bracket as

Vietnam, India and Kenya

In 2011, agriculture and primary

industries accounted for 55% of

Panacea’s GDP

Local SMEs contributed

only 25% of Panacea

GDP

IS THIS

GOOD

ENOUGH?

The Next East Asian

Miracle

Strengths

•Large labour force

•Resource abundant

Weaknesses

•Lack of Skilled Labour

•Lack of innovation

•Weak SME Sector (lack

of entrepreneurship)

Opportunities

•Free Trade

Agreements

established

•FDIs in Service

sectors

Threats

•Possible loss in

comparative

advantage in

agriculture and

primary industries

Business

Creation

Restructuring

the Economy

Manpower

Initiatives

Research and

Development

' 11 Jan2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ' 21

10th Year Review of Revamped Education Focus

2021

Commencement of RI-industry Tie-ups2018

SMEDA - SME Foreign Placement Programme2018

Angel Foundation National Campaign2017

Opening of RI Hub2017

Start SMEDA SME-Consultancy Collaboration2016

Mass implementation of Revamped Education Focus 2015

Unveiling of SME Development Agency (SMEDA)2014

Customization of SEZ2012

Start Annual Re-skilling initiatives2012

Formulate SME assistance scheme2011

Identify Niche Areas2011

Pass IP Rights Bill

2011

Set-up Education Review Committee2011

Global Recruitment of R&D Talent

2016 - 2017

Develop infrastructure for RI Hub 2013 - 2017

Pilot of Revamped Education Focus

2013 - 2015

Redevelopment of SEZs 2012 - 2017

Service Sector Training Incentive 2012 - 2015 Overview of timeline

Overview of Timeline

Overseas Missions2012

Business information

database to include in-

depth information of >80%

of all key economic sectors

by 2030

Actors Involved

-Ministry of Trade and

Investment

-Business Consulting

Groups

-Private-sector

Entrepreneurs

Resources

-Organisational Set-up costs US$3 million

-Communication infrastructure for SME business

consultation US$1 million

-Cross functional teams from various ministries

-Over 200 business consultants

Case Study:

-Spring Singapore

- StartUp Britain, with

StartUp Loans

- C.f. Structural Funds by

European Commission

' 11 Jan2011

2012 2013 2014 2015 2016 2017 2018 2019 2020 ' 21

Business Creation

SME Development Agency (SMEDA)

Formulate SME assistance scheme

2011

Unveiling of SME Development Agency (SMEDA)2014

Start SMEDA SME-Consultancy Collaboration

2016

Angel Foundation National Campaign

2017

SMEDA – SME Foreign Placement Programme

2018

Problems Tackled

•Difficulties to start a business

•Bureaucratic Inefficiencies

•Difficult to penetrate foreign

markets

NPF Objectives met

• Increase contribution of

services to total GDP and

exports

Cabinet Secretary KPIs

•Positive economic impact

•Positive social impact

•Business creation

•Minimal budget impact

Business CreationSME contribution to GDP

from 36.2% in 2011

to 40% by 2030

Business Info Database Foreign Placement Programme

SME-Consultancy Collaboration

Educational Campaigns

National recognition of Venture capitalists

' 11 Jan2011

2012 2013 2014 2015 2016 2017 2018 2019 2020 ' 21

Business Creation

Angel Foundation National Campaign

Angel Foundation National Campaign

2017

Problems Tackled

•Lack of funds for start-ups

•Low rate of business

formation

NPF Objectives met

•Developing high end

services sectors (in tandem

with SMEDA-SME Foreign

Placement Programme)

Cabinet Secretary KPIs

•Positive economic impact

•Business creation

•Increasing innovative start-

ups

1) By 2030, angel funds to

contribute to 20% of

investment in all start-ups

per year

2) High public contribution

to start-up funds

Actors Involved

-Angel investors

-Government bodies

-Members of public

Resources

-Setting up of committee

-Funding to constantly recognize contributions

to angel foundationsCase Study:

-Angel funds in Silicon Valley

amount to 39% of the

$7.5Billion throughout Q2

2011

-Angel Investors Tax

Deduction (AITD) Scheme in

Singapore Angel investing

scene more active

Annual compound increase for business startups to

reach 5.7% by 2030

Problems Tackled

•Poor Knowledge of

mechanized production

techniques

•Current economic focus on

low-value goods

NPF Objectives met

•Develop high tech

manufacturing sector

• Influence Total Factor

Productivity

Cabinet Secretary KPIs

•Positive economic impact

•Positive social impact

• Innovation

•Business creation

' 11 Jan2011

2012 2013 2014 2015 2016 2017 2018 2019 2020 ' 21

Restructuring the Economy

Restructuring the Economy2012 - 2017Develop infrastructure for

Niche Industries

2012 - 2015Service Sector

Training Incentive

Identify Niche Areas2011

Overseas mission

2012

Complete redevelopment of

SEZs with appropriate

industries and infrastructure

in 5 years’ time

Actors Involved

Ministry of Trade and

Investment

- Ministry of Finance

- Special Economic Zone

Authorities

Resources

-Organisational and travel/miscellaneous

costs US$2 million

-Existing SEZs authorities to facilitate the

shift in focus

Case Study:

-Overseas missions:

Economic Development

Board (Singapore)

- Successful SEZs in

France, Germany, Ireland

and USA for the past 50

years

- Export processing zone

model (India)

Customization of SEZs

2012

FDI net inflow as % of GDP

from 1.8% in 2011

to 6% by 2030

Export of services as % of total exports

from 12.6% in 2011

to 25% by 2030

Customization of SEZs

' 11 Jan2011

2012 2013 2014 2015 2016 2017 2018 2019 2020 ' 21

Reskilling Initiatives ManpowerInitiatives

Start Annual Reskilling Initiatives2012

Incentive Program for skills

upgrading expenditure

Data-base of

Potential Trainees

Encourage growth of

Private Training Institutes

Problems Tackled

•Structural unemployment

•Stagnation of economy in

lower-value sectors

NPF Objectives met

• Increase contribution of

services to total GDP and

exports

• Develops the high-tech

manufacturing sector

Cabinet Secretary KPIs

•Positive economic impact

•Positive social impact

•Business creation

•Minimal budget impact

Retrain 5% of workers in

low value sectors (such as

agriculture, commodities)

every year

Actors Involved

-Ministry of

Manpower/Labour

-Private firms/employers

-Private training institutes

Resources

-Govt to match 20% of every firm’s

spending on approved upgrading

schemes forecasted US$1 Bn

-Department to oversee programmeCase Study:

-Workforce Development

Agency (Singapore)

-UK total private training

expenditure £$50 bn

Unemployment figures

from 8.3% in 2011

to 2.3% by 2030

Services as % of GDP

from 25% in 2011

to 65% by 2030

Strong IP protectionEase of filing for

global patents

' 11 Jan2011

2012 2013 2014 2015 2016 2017 2018 2019 2020 ' 21

Pass Bill that strengthens IP Rights2011

Opening of RI Hub2017

Commencement of RI-industry Tie-ups2018

Global Recruitment of R&D Talent

2016 - 2017

Develop infrastructure for RI Hub

2013 - 2017

Research & Development

Pass Bill that strengthens IP Rights

Problems Tackled

•Aversion to invest in R&D

due to fears of

Intellectual property theft

NPF Objectives met

•Develop high-end

manufacturing and

service sectors

Cabinet Secretary KPIs

•Positive impact on GDP,

employment and

productivity

•Innovation

•High-tech exports

25,000 patents filed

per year (based on

India’s figures)

Actors Involved

-Ministry of Trade

and Industry

-Firms

-Law Enforcers

Resources

- Review Committee on current

IP Rights

Case Study:

Singapore – World

Bank’s 2010 Ease of

doing Business report

Research and DevelopmentTotal Factor Productivity to

increase by 5% in

each decade until 2030

Develop state

of the art

infrastructure

Scholarships

for research

talents

Fiscal

incentives

and tariffs

exemption

' 11 Jan2011

2012 2013 2014 2015 2016 2017 2018 2019 2020 ' 21

Opening of RI Hub2017

Commencement of RI-industry Tie-ups2018

Research & Development

Develop infrastructure for RI Hub

Global Recruitment of R&D Talent

Problems Tackled

• Inertia of R&D Program

•Lack of synergy with

commercial industries

NPF Objectives met

•Develop high-end

manufacturing and service

sectors

• Increase Total Factor

Productivity

Cabinet Secretary KPIs

•Positive impact on

GDP, employment and

productivity

• Innovation

1) 80% of occupancy rate of each

phase (by 10 years after

completion)

2) 10% commercialisation success

rate of RI-industry tie-ups

Actors Involved

-Private developers

- Firms

- Research Institutes

Resources

- Design and construction of Hub and

Infrastructure

(5 phases x US$1.2 billion = US$6 billion)

- Incentives to attract research talents

Case Study:

- Singapore’s Science Park I

and II 80% occupancy

- L’Oreal Advance Research

Centre in Biopolis to enhance

collaboration

Total Factor Productivity to

increase by 5% in

each decade until 2030

Panacea Renewal Committee Cabinet Secretariat

NGOs

Ministry of Labourand Women Welfare

Ministry of Trade and Investment

Advisory Panel

Steering Committee for IP Rights Act

RI Hub Development Taskforce

SMEDA Management Board

Angel Foundation Board

National Reskilling Board

Panacea Investment Agency

Biz Consultancies

Research Institutes

Angel Investors

Public

Entrepreneurs

Training Institutes

Unskilled Workers

R&D Talent

Firms

SEZ Authorities

Institutional Framework

Infrastructure

US$6.01billion

Incentives

US$3 billion

Organizational cost

US$5 million

Publicity

US$5million

Total CostUS$9.02 billion

+ Operating Costs+ Manpower Costs

+ Bureaucratic Costs

Increase FDI net inflow to from

1.8% of GDP to 6% of GDP

Increase SME contribution to GDP

from36.2% of GDP to 40%

Increase services as % of GDP

from 25% to 65%

Export of services as % of total

exports from 12.6% to 25%

Annual compound increase

for biz startups to reach 5.7%

Unemployment decrease

from 8.3% to 2.3%

Total Factor Productivity to

increase by 5% in each decade

Total BenefitsUS$413.07 billion

+ Increase Biz Startups+ Decrease Unemployment

+ Increase TFP

SMEDASMEs may require

financial assistance

1) Separate

creditworthiness checks

by SMEDA

2) SMEDA to be guarantor

Policy Risk Factor Mitigating Solution

IP Rights BillImpede widespread

implementation of

patented ideas

First Bill need not be

overly strict and

inclusive

Overseas

mission for

wooing FDI

Companies in current trade

partner countries might not

see the immediate benefit of

moving to Panacea

1) Companies set up in our

SEZs are exempt from all

taxes

2) Reduced logistics and

transportation costs

SMEDA

Prioritization

Type of

economic

Impact

Immediacy of

Results

Ease of

Administration

Primary Policies

•From current

state to a pointed

focus on high-

tech production,

service etc.

Secondary Policies

•Honing

innovation and

entrepreneurship

initiatives for the

long-term

Short Term

•SMEDA

•Reskilling

programme

•IP Rights Bill

Mid Term

• Attracting

FDI

• RI Hub

Long Term

•Revamp of

Education

Focus

•Angel

Foundation

National

Campaign

Lower Cost Policies First

• Implement policies

based on existing

resources

•Projects partially

funded by private

sector

Restructuring

the Economy

Manpower

Initiatives

Research and

Development

Business

Creation

A fresh focus on high-value sectors

An emphasis on driving innovation

Novel policies

Focused on the unique conditions in Panacea

Addressing Panacea’s economic targets

Synergetic

Versatile

Questions?

Thank You!