In today’s Budget speech, Singapore’s finance minister Heng Swee Kiat made clear the importance of digital innovation to relevance in today’s economy

The Singapore government is pulling out all the stops to ramp up the country’s digital readiness and innovation drive.

In an uncertain and rapidly changing world, Singapore firms — especially those facing cyclical headwinds — need to adapt and innovate in order to thrive.

This was the core of Singapore’s finance minister Heng Swee Keat’s message at the Budget 2017 speech in parliament today. He stressed the importance of equipping SMEs and workers with digital skillsets, and building a strong infrastructure that will foster the growth of innovative technologies and solutions.

Heng said Singapore would allocate S$2.4 billion (US$1.7 billion) for this digitalisation drive.

Here are some key takeaways from his speech:

SME Go Digital Programme

The Info-communications Media Development Authority of Singapore (IMDA) will work together with SPRING Singapore to build the digital capabilities of SMEs across the country. The initiative will be called the ‘SME Go Digital Programme’.

Companies will able to get advice on how and what technologies to use at each stage of their growth. The programme will cover verticals including retail, food services, logistics, cleaning, wholesale trade, and security.

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Additionally, SMEs will be able to get in-person help at the SME Tech Hub (which will be launched soon). At the centre, they can approach business advisors and ICT consultants on how to use government-approved or off-the-shelf ICT solutions.

Companies with developed tech products will be able to receive funding and advisory support.

Helping companies access intellectual property

The government research institute Agency for Science, Technology and Research (A*STAR) will ramp up support for tech companies. Over the next four years, it aims to help 400 companies develop their products.

For companies looking for intellectual Property (IP), a Spring affiliate Intellectual Property Intermediary will match them up with the relevant IP, whether in Singapore or overseas.

A*Star’s Headstart programme, which allows SMEs to enjoy royalty-free and exclusive licenses, will now be extended to 36 months.

Growing Singapore’s international footprint

Last year, through a scheme called the International Enterprise (IE) Singapore, 37,000 companies were able to increase their presence in international markets.

This year, the government will launch a S$600 million (US$423 million) International Support Fund. Its aim is to co-invest with SMEs to help them scale and internationalise.

Beyond helping companies expand to new markets, the government also wants to holistically build their international reach and networks. To that end, it has set up the Global Innovation Alliance (GIA) — one of the components of the 7 strategies of Committee of Future Economy (CFE) announced earlier.

The first part of the initiative is the Innovators Academy. This will enable tertiary students to work at foreign startups in overseas markets. Previously, this was available to NUS students through the NUS Overseas College (NOC) programme. Now, the government will open it up to other Singapore universities. They will also increase the intake of students from 300 to 500 over the next five years.

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The second part is the Innovation Launchpads, which will be established in various overseas markets. This will enable entrepreneurs and SMEs to connect with mentors, investors and service providers.

Lastly, the government will launch Welcome Centres. This will allow foreign companies to co-innovate with Singapore businesses and expand in the region.

The GIA is expected to roll out in Beijing, San Francisco and other Asean countries.

Another component of the government’s international outreach is its Skillsfuture Leadership Development Initiative. This will seek to develop selected Singaporean employees into leaders through specialised courses in overseas postings. The government expects to groom 800 potential leaders over three years.

In total, S$100 million (US$70 million) will be allocated to both the GIA and Skillsfuture Leadership Development Initiative.

Building skills locally

The Singapore government will allocate substantial funds to expanding domestic courses for Singapore workers seeking to bolster their IT skills.

To that end, it will set aside a S$26 million (US$18.3 million) a year for its Lifelong Endowment Fund and Skills Development Fund.

Additionally, to enhance training, it will expand the use of e-learning and offer short modular courses. For selected courses offered at the NTUC-Education and Training Fund, the government will pump in S$150 million (US$105 million) to match donations to the fund, he said.

The Singapore government will also be allocating a fund specifically to grow a critical IT sector — Data and cybersecurity. As data becomes an increasingly important commodity at firms, more cybersecurity professionals will need to be recruited. Thus, a S$80 million (US$56.4 million) fund has been set up to fund relevant training courses.

But besides throwing money into skills growth, the government wants to make sure its skilled workers are matched to the correct jobs. Thus, it will use its job banks to deliver better job matching services.

More regulatory sandboxes and innovation funds

The government will be expanding the use of regulatory sandboxes, which gives technologies a safe space to be test trialled. For example, last year, specific zones were set aside to test autonomous cars.

Rules within regulatory frameworks were also relaxed to facilitate growth of fintech sectors and VC funding.

Moving forward, the government will be setting up a priority review scheme for the Health Sciences Authority (HSA). This will allow HSA to “evaluate new and innovative medical devices, accelerate the commercialisation process and make Singapore a preferred location to launch these devices.”

“The government’s plans to simplify regulatory approvals for medical products in a partnership with the HSA will enable innovation and testing in Singapore,” said Kuldeep Singh Rajput, Founder & CEO, Biofourmis, in response to the Budget 2017 speech.

The government will also be allocating more funds for innovation. These include a S$150 million (US$105 million) Public Sector Construction Productivity Fund, which will be used to grow better construction tech solutions; and a S$500 million (US$352.5 million) top up to the National Research Fund (NRF); as well as S$1 billion (S$705 million) for the National Productivity Fund (NPF).

In total, S$2.4 billion (US$1.7 billion) will be set aside to execute all the strategies in the CFE initiative.

“We are excited to see the budget propose progressive strategies that will be geared towards addressing rapid technological changes, especially recommendations centered around enabling SMEs and startups to drive innovation and growth in the coming years,” said Jeffrey Liu, Co-Founder & CEO, GuavaPass, in response to the Budget 2017 speech.

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