DPM Heng Swee Keat at the RIE Industry Day 2023

DPM Heng Swee Keat | 1 November 2023

Speech by Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat at RIE Industry Day 2023 on 1 November 2023.


Mr Lim Boon Heng, Chairman of Temasek

Mr Dilhan Pillay Sandrasegara, CEO of Temasek

Ladies and gentlemen, good morning, it is good to be here at RIE Industry Day 2023. We last gathered in 2021 on a cautiously optimistic note, as we were turning the corner on our COVID-19 fight. Powered by mRNA technology, new vaccine breakthroughs renewed our faith and commitment in science and technology. Two years on, we have learnt that emerging from COVID was only the beginning – the world today looks rather different and more difficult. Geopolitical tensions between China and the US continue to simmer, and armed conflict has erupted – first in Ukraine, and now in the Middle East. We are entering a phase of de-globalisation or “slow-balisation”, where the world is becoming more fragmented and protectionist, as economies de-risk and de-couple. Persistently high inflation and interest rates have made borrowing more expensive and funders more conservative in deploying their dry powder, leading to a funding “winter” for cash-hungry startups.

Amid this gloominess, Singapore has been relatively fortunate so far. As a safe and trusted node with strong linkages across the region and the world, we have attracted new trade and financial flows. VC investments in Singapore have grown significantly, reaching S$14.7B in 2022, nearly triple of 2020’s S$5.5B. This accounts for 64% of Southeast Asia’s total VC deal value. Our commitment to invest in our research, innovation and enterprise ecosystem is beginning to pay off. Our innovation ecosystem has grown more vibrant. We have moved up in the World Intellectual Property Organisation’s (WIPO) Global Innovation Index – our economy is ranked 5th in the world in 2023, and top in Asia. We are attracting the brightest startups globally – the recent Lee Kuan Yew Global Business Plan Competition (LKYGBPC) organised by SMU attracted 1,000 entries, 50% of which were from Europe and the US.

These successes were a result of patient and persistent nurturing over the years, and our RIE Industry Days illustrate this journey well. At the beginning, we merely Gathered to meet other parts of the RIE ecosystem. There was low awareness of what other stakeholders were doing. Once we knew one another, we were able to Glean insights from different quarters, and uncover possibilities for collaboration. Equipped with better knowledge and trust, we agreed to Grow the ecosystem together. At the last RIE Industry Day in 2021, I spoke about powering the flywheel of innovation by making innovation more pervasive, focusing on impactful areas, and investing in deep tech. Over a span of seven years, we have advanced steadily. Gather – Glean – Grow – we have moved from 1G to 2G to 3G. But today our telco networks are already at 4G and 5G. So what should the equivalent be in our innovation work? This year’s theme is “venture engineering – from deep tech research to commercial reality”. It is focused and action-oriented, and speaks to the importance of turning research results into impact. So having established a good innovation base, our 4G and 5G should be to Gear up and Get ahead. Allow me to elaborate.

At the last RIE Industry Day, we had recognised the importance of deep tech, and Temasek had committed S$1B annually in deep tech investments. Two years on, we’ve learnt that such investments are not just “good to have”, but “do or die”. Tech cycles are shortening and becoming more disruptive. This brings significant upsides, but requires us to develop the necessary capacity and capabilities to seize these opportunities. In a fragmented, protectionist world where even science and tech could be curbed, we need to be more proactive and forward-looking in identifying the next bound of growth, and invest in them early. What does it mean to Gear up and Get ahead? Let me lay out three interlocking strategies.

Deepen commitment to deep tech

First, our investments in deep tech must continue – we must rally the different elements necessary for success, and build up our ecosystem. Deep tech differs from other segments in that it requires longer gestation, and many “parents” to guide it to maturity. We must Gear our ecosystem up to nurture and support deep tech, with a view to harvest the returns down the road. How can we do so?

We must firstly ensure a strong IP core for deep tech commercialisation, which requires continued commitment to research and translation.

Under the government’s RIE2025 plan, we have committed $25B to build a deep base of scientific research, including technologies with disruptive potential, and translation platforms to bring these technologies to market. Public research institutions play a key role in building a rich source of cutting-edge IP to be commercialised. For example, Nanofilm, a nanotechnology materials company, was spun off from NTU and grew to become Singapore’s first deep tech unicorn. Cancer diagnostics startup Mirxes was spun off from A*STAR, and recently applied for IPO in Hong Kong. I am glad that Temasek, NUS and NTU launched a partnership less than two months ago to invest $75M to accelerate deep tech spinoffs from their research pipelines.

Next, we must nurture smart and patient capital for deep tech startups. Unlike other startups, deep tech startups take longer to generate their first dollar. The Engine at MIT takes an 18-year horizon for “Tough Tech”, longer than the usual 10-year funding horizon. We must therefore find the right investors who are willing to step in early and venture build. Venture building is not just about the science and research, but also about the business and market.Smart capital must come in the form of experienced investors who work directly with our researchers, institutes of higher learning, and research institutes to provide problem statements, or help them think about commercialising promising IPs.

Such investors can also help with venture engineering, which means helping a fledging startup assemble the optimal technical and entrepreneurial team, as well as leveraging their international networks to help startups scale their businesses. Xora, an early-stage deep tech investment platform which is a wholly-owned subsidiary of Temasek, is a good example of a venture builder.

Finally, we must build a base of talent to power deep tech startups to success. Deep tech requires a mixture of both entrepreneurial researchers and science-literate business minds. SGInnovate is helping to grow the local pool of deep tech technical talent, such as through the innovation & Enterprise Fellowship Programme. From what I’ve gleaned through interactions with US venture builders, there is scope for us to engage the business side more in Singapore, by bringing our business schools into closer partnership with research institutions to train entrepreneurial talent.

Corporate innovation

I spoke about deepening support for deep tech in Singapore, as the base for innovation and enterprise. But the connecting arm to industry is crucial for commercialisation and this is my second point – it must be paired with corporate innovation. The usual proxy for measuring corporate innovation is business expenditure on R&D (or BERD). It is encouraging that this has been growing steadily for Singapore – from $3.8B in 2010, to $6.6B in 2020. Nevertheless, there is still room to encourage greater private sector R&D investments. Today, Singapore’s BERD is around 1.4% of GDP, and 1.8 times of public expenditure on R&D (PUBERD). This is still less robust than in countries like Korea, whose BERD is around 3.8% of GDP and 3.8 times of PUBERD. Expenditure is also uneven – MNCs still invest the lion’s share in R&D, compared to large local enterprises (LLEs) and small and medium enterprises (SMEs). With this wide variation in innovative capacity, there is a risk that companies that have not invested sufficiently in R&D, could be left behind.

Today, public-private R&D collaborations like corporate labs are a key source of innovation and a win-win proposition, as companies can harness talent from our public research ecosystem
to develop globally competitive products and services. We also have the Industrial PhD Programme, which enables us to build up critical R&D skill sets in Singapore, within the corporate R&D environment. I recently visited the Schaeffler Hub for Advanced Research (SHARE) at NTU, and was pleased to see how they combined the best of Schaeffler’s industry expertise with NTU’s technical talent to develop many successful inventions which have been deployed in Schaeffler’s manufacturing plants.

Our large local enterprises can also play a “queen bee” role by building symbiotic relationships with startups and SMEs, to accelerate their innovation journeys and integration into the large companies’ supply chains. For example, the joint lab between Singapore Airlines (SIA) and A*STAR’s Singapore Institute of Manufacturing Technology (SIMTech) has facilitated the transfer of surface coating technology to local SME Applied Total Control Treatment, enabling it to secure a contract with SIA to refurbish its cabin components.

Corporate ventures are another effective pathway for large companies to innovate, incubate and build new businesses. An example is Aquaeasy, a spinoff venture from Bosch’s incubation platform and EDB New Ventures. Riding on Bosch’s Internet of Things (IoT) technologies, it offers a suite of high-performance sensors and real time analytics for aquaculture. Large companies can also share their business needs on the Open Innovation Network (OIN) by EnterpriseSG and IMDA. Startups and SMEs can then respond to, co-develop, and test-bed new solutions with them. Since 2020, this Network has hosted more than 1,000 challenge statements by more than 600 challenge owners.

Small is beautiful… and powerful

This brings me to my last point which speaks to the 5th G – as we gear up deep tech investments and corporate innovation, we must make full use of our small size to Get ahead, be nimble and be swift. Gearing up and taking action requires us to intensify partnerships and collaboration – we have built up a compact yet deep ecosystem, so we must leverage it fully. With our single layer of government, we must endeavour to work seamlessly and nimbly across agencies to facilitate collaborations and new ventures across the ecosystem. Our agencies must be able to come up with regulatory sandboxes to respond and support these new changes. I’ve always emphasized collaboration to leverage strengths and achieve scale, even as we compete in the business. We must continuously build this muscle until it becomes strong and instinctive.

Thus, I am happy to note that we are seeing concrete examples of the ecosystem rallying to unlock new possibilities quickly. Just a month ago, I was at the opening of ClavystBio and its collaborative innovation space Node 1. As a venture builder, ClavystBio brings innovators, scientists, investors and entrepreneurs from all over the world to grow life science companies out of Singapore, and enrich our ecosystem in the process.I mentioned earlier that NTU, NUS and Temasek have piloted a partnership to invest $75mil to accelerate deep tech spinoffs from universities. A key element of the programme is pairing experienced global venture builders with promising researchers. Merely two months on, the programme is ready to announce its first deep tech spinoff – Amperesand from NTU, which holds solid state transformer fast charging technology. This started as public research under the Energy Grid 2.0 initiative, which enabled the technologies to be piloted and matured with different agencies. Xora then provided support to identify the unique technology and map out commercialisation pathways, with consultants helping to develop IP, go-to-market, and fund engagement strategies. Amperesand plans to commercialise modular and scalable solid-state transformer for the fast charging of electric vehicles. It aims to deliver its first systems to customers by 2025.A supporting prong is that NTU and NUS have simplified and harmonised their IP licensing framework, with a view to accelerate widespread usage and adoption of their technologies. As I mentioned before, collaboration enables us to compete better and faster globally. NTU and NUS’s simplified framework will reduce licensing processes from a few months to a few weeks. They (It) will include a deferred payment plan for licensing fees for revenues up to S$1mil. This means companies can license technology and conserve cash to develop and scale up the technology further. There will also be a joint IP marketplace for users to search both universities’ IP on a single platform. These are two excellent examples of how small can be beautiful, nimble, agile, and impactful.

How else can we Gear up our compact ecosystem to Get ahead and maximise impact? We must ensure porosity between public research institutions and industry. We must enable our researchers to move seamlessly out to industry to do commercialisation work, then return again with the benefit of that entrepreneurial experience. This “recycling” effect is important for growing innovative capacity across the ecosystem. I am therefore happy to hear that NUS, NTU and Temasek will start a Venture Fellowship programme, to second entrepreneurial researchers from NTU and NUS to Xora on a full-time basis to develop their technologies and ventures. Initiatives like this are an important step for building capacity and a culture of innovation. In addition, we must maintain strong linkages with other global innovation hubs, to deepen our position as a Global-Asia node for technology, innovation and enterprise. Earlier this year, I spoke at GIC’s Bridge Forum in San Francisco about the importance of bridging different geographies, people and ideas. It is also why I have made two trips to the US, and visited Japan, Germany, and Switzerland this year. Just two weeks ago, I had an excellent meeting with my French counterpart, who brought a strong contingent of research institutions. Building strong global connections is key to accessing disruptive technology and overseas talent, while attracting global enterprises and foreign startups to Singapore.

Enterprise Singapore runs an in-market access programme, the Global Innovation Alliance. It helps startups tap on a network of overseas partners to accelerate their market entry into major innovation hubs, and also supports international startups looking to access Southeast Asia through Singapore. We have 18 GIA nodes across the world, and yesterday, I announced the launch of three more – in Mumbai, Sydney and Melbourne. We are currently in the midst of our Singapore Week of Innovation and Technology (or SWITCH). Through hosting innovation leaders, startups, corporates and investors from all over the world, we hope that Singapore can facilitate meaningful exchanges and catalyse further collaborations.

These three elements – deepening commitment to deep tech; strengthening corporate innovation; and leveraging our small size to our advantage – are how we can Gear up our innovation ecosystem and Get ahead in today’s 5G world, and prepare for the next wave.


Let me conclude. I am heartened that we have made good progress from a 1G to 4G and 5G innovation economy within a short span. I commend the different stakeholders for leaning forward to grow and support our innovation ecosystem. Let’s work together to gear up on all three fronts so that we can get ahead of the competition, by nurturing deep tech, spurring corporate innovation and rallying our compact and deep ecosystem. In a more competitive and less benign world, Singapore can continue to create and capture value and feed the virtuous circle of innovation if we can drive collaboration to address shared global challenges such as pandemic readiness, climate change and ageing population. Through Temasek and our other Singapore companies’ investment, we can establish strong networks in the region and across the world. So let us continue welcome the best minds to Singapore, and rally together to make an impact.

Thank you.