Development, Policies & Development, Policies & Opportunities inOpportunities in

The Emerging The Emerging Digital Economies Digital Economies of Asiaof Asia

The Transformation of Research & The Transformation of Research & Development Development in East Asia and Japan Seminar Seriesin East Asia and Japan Seminar Series

US-Japan Technology Management CenterUS-Japan Technology Management CenterSchool of Engineering, Stanford UniversitySchool of Engineering, Stanford University30 September 199930 September 1999

Harry SK TanHarry SK TanAsst Professor Asst Professor Nanyang Business SchoolNanyang Business School

Why Focus R&D in Why Focus R&D in Electronic Commerce Electronic Commerce Technologies? Technologies?

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1998 US Dept of Commerce 1998 US Dept of Commerce reportreport• How long to reach 50 mil users? How long to reach 50 mil users?

– Radio in 38 years; Radio in 38 years; – TV in 13 years; TV in 13 years; – Internet by 4 yearsInternet by 4 years

• [1994 -3mil users] - [1997-100mil [1994 -3mil users] - [1997-100mil users]users]

• Traffic X2 every 100 daysTraffic X2 every 100 days

• Domain names Domain names [26,000 - Jul 1993] - [1.3 mil - Jul 1997][26,000 - Jul 1993] - [1.3 mil - Jul 1997]

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1998 2001 Total WWW users (million) 6.86 23.31

Total WWW buyers (million) 1.18 6.83

Overall e-commerce per year (US$m) 700.42 16,538.18

(from Asia/Pacific Internet – Market Forecast for Internet Commerce,(from Asia/Pacific Internet – Market Forecast for Internet Commerce, 1996 – 2001 by IDC in 1996)1996 – 2001 by IDC in 1996)

Internet Commerce in Asia PacificInternet Commerce in Asia Pacific

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What is this presentation What is this presentation about?about?

Part I -Part I - Competitive Strengths of Asia Competitive Strengths of Asia Pacific Digital EconomiesPacific Digital Economies

Part II - Part II - Transformation of Singapore’s R&D Transformation of Singapore’s R&D landscapelandscape

Part III -Part III - High Tech R&D and Business High Tech R&D and Business Opportunities in Singapore Opportunities in Singapore

Part IPart I

The Emerging Asia The Emerging Asia Pacific Pacific Digital EconomiesDigital Economies

• MalaysiaMalaysia• JapanJapan• AustraliaAustralia• SingaporeSingapore

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What do we look at?What do we look at?

1. General political, current events &1. General political, current events & policies policies

2. Competitive Factors2. Competitive Factors– LabourLabour

– Technology InfrastructureTechnology Infrastructure

– Sources of CapitalSources of Capital

– TaxesTaxes

– MarketsMarkets

Part II Part II

Transformation of Transformation of Singapore’s R&D Singapore’s R&D landscapelandscape

Part II Part II

Transformation of Transformation of Singapore’s R&D Singapore’s R&D landscapelandscape

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The questions...The questions...

• Where is mainstream high Where is mainstream high technology R&D going and why?technology R&D going and why?

• How has it changed the R&D How has it changed the R&D landscape?landscape?

• Singapore Model for R&D: Singapore Model for R&D:

((High Tech Entrepreneurship = High Tech Entrepreneurship =

Technopreneurship) Technopreneurship)

““... challenge for the Singapore ... challenge for the Singapore economy in the 21st century was to economy in the 21st century was to rapidly transit from a capital-rapidly transit from a capital-intensive manufacturing and intensive manufacturing and services economy to a globally services economy to a globally competitive advanced competitive advanced knowledge knowledge economyeconomy with a strong and with a strong and vibrant vibrant technopreneurshiptechnopreneurship sector within the sector within the next decade.”next decade.”

DPM Dr Tony TanDPM Dr Tony Tan

““... challenge for the Singapore ... challenge for the Singapore economy in the 21st century was to economy in the 21st century was to rapidly transit from a capital-rapidly transit from a capital-intensive manufacturing and intensive manufacturing and services economy to a globally services economy to a globally competitive advanced competitive advanced knowledge knowledge economyeconomy with a strong and with a strong and vibrant vibrant technopreneurshiptechnopreneurship sector within the sector within the next decade.”next decade.”

DPM Dr Tony TanDPM Dr Tony Tan

What is Singapore’s What is Singapore’s new Strategic plan?new Strategic plan?What is Singapore’s What is Singapore’s new Strategic plan?new Strategic plan?

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““Technopreneurship 21”Technopreneurship 21”

1. 1. New Funds New Funds - US $1 billion - seed money - US $1 billion - seed money for developing Singapore into a venture for developing Singapore into a venture capital centrecapital centre

2. 2. EducationEducation - to build a risk-taking mind set - to build a risk-taking mind set

3. 3. FacilitiesFacilities - build comfortable, attractive, - build comfortable, attractive, safe and conducive facilities to attract safe and conducive facilities to attract talenttalent

4. 4. Deregulate & Laws changedDeregulate & Laws changed - to support - to support the entrepreneurial environment. the entrepreneurial environment.

1. Funding1. Funding

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Sources of Capital & Sources of Capital & FundingFunding• EDB - Economic Development EDB - Economic Development

BoardBoard

• GIC - Government Investment Corp GIC - Government Investment Corp

• NSTB - National Science & NSTB - National Science & TechnologyTechnology Board Board

• NCB - National Computer BoardNCB - National Computer Board

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Singapore's US$1b technology Singapore's US$1b technology fundfund• National Science and Technology Board (NSTB)National Science and Technology Board (NSTB)

will manage US$250 million to co-invest with will manage US$250 million to co-invest with the private sector to develop Singapore-based the private sector to develop Singapore-based startups with ideas at seed-stage. startups with ideas at seed-stage.

• Government of Singapore Investment Government of Singapore Investment Corporation (GIC)Corporation (GIC) will manage the remaining will manage the remaining US$750 million through two fundsUS$750 million through two funds

– US$500 million broad-based Fund of FundsUS$500 million broad-based Fund of Funds

– US$250 million Strategic Fund. US$250 million Strategic Fund.

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NSTB FundsNSTB Funds• Business Angel FundBusiness Angel Fund

• Technology Incubator ProgramTechnology Incubator Program

• Technology Development FundTechnology Development Fund

• Patent Application Fund (PAF)Patent Application Fund (PAF)

• Research and Development Assistance Research and Development Assistance Scheme (RDAS)Scheme (RDAS)

• Innovator Assistance Scheme Innovator Assistance Scheme

• Incubation Support (Innovation Centre)Incubation Support (Innovation Centre)

• Technopreneur Assistance CentreTechnopreneur Assistance Centre

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NCBNCB• IT Cluster Development FundIT Cluster Development Fund

• Local Enterprise Electronic Commerce Local Enterprise Electronic Commerce ProgrammeProgramme

• IT Co-Investment Fund (ITCF) IT Co-Investment Fund (ITCF)

Broadband R&D GrantBroadband R&D Grant

Business Headquarters ProgramBusiness Headquarters Program

Initiatives in New Technology SchemeInitiatives in New Technology Scheme

Pioneer Status Investment AllowancePioneer Status Investment Allowance

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Other ResourcesOther Resources

• National Patent Information CentreNational Patent Information Centre

• National Technology DatabankNational Technology Databank

• People NetworkingPeople Networking

– Innovators ClubInnovators Club

– Technology Networking GroupTechnology Networking Group

– Mentoring ProgrammeMentoring Programme

2. Education2. Education

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Review of EducationReview of Education

• Universities to be more independent Universities to be more independent

– in managing its funds in managing its funds

– staff recruitment and staff recruitment and

– governance structuregovernance structure

• Undergraduate & Postgraduate Undergraduate & Postgraduate

programmes and Forums in programmes and Forums in

Technopreneurship at both UniversitiesTechnopreneurship at both Universities

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School of Mechanical and Production EngineeringSchool of Mechanical and Production Engineering

Introduce students to essential business skills and Introduce students to essential business skills and to provide them with a road-map on the high tech to provide them with a road-map on the high tech entrepreneurial process. entrepreneurial process.

SCOPE: SCOPE:

(1) Starting and running a business modules (1) Starting and running a business modules

(2) Enrichment modules on business skills and (2) Enrichment modules on business skills and strategy strategy

(3) Visits to companies (3) Visits to companies

(4) Project with emphasis on technology, business (4) Project with emphasis on technology, business survey and planning survey and planning

NANYANG Technological Technological U N I V E R S I T YU N I V E R S I T YSINGAPORE

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3. New Facilities3. New Facilities

Singapore Science Park I Singapore Science Park I & II& II

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New Buona Vista Science HubNew Buona Vista Science Hub

• Being built at cost of $5 billion, where ideas Being built at cost of $5 billion, where ideas born within a scientific community are born within a scientific community are cradled, nurtured and developed into cradled, nurtured and developed into commercial ventures. commercial ventures.

• 176 ha of the Buona Vista area, (three times 176 ha of the Buona Vista area, (three times the size of the present two Science Parks)the size of the present two Science Parks)

• Next to National University of Singapore, Next to National University of Singapore,

• INSEAD and Johns Hopkins University will INSEAD and Johns Hopkins University will establish a presence thereestablish a presence there

4. Deregulation & 4. Deregulation & Changing of Changing of LawsLaws

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Laws ChangedLaws Changed• Easier for foreigners to set up businesses in Easier for foreigners to set up businesses in

Singapore - e.g. long term visas without Singapore - e.g. long term visas without employmentemployment

• Bankruptcy Laws:Bankruptcy Laws:– Minimum threshold for filing bankruptcy Minimum threshold for filing bankruptcy

increased from S$2,000 to S$10,000increased from S$2,000 to S$10,000– Debts of under $500k can be discharged lowered Debts of under $500k can be discharged lowered

to 3 years (from 5 years)to 3 years (from 5 years)

• Employee can defer tax liabilities for 5 years Employee can defer tax liabilities for 5 years when exercising their stock option rightswhen exercising their stock option rights

• Investors may qualify for tax deduction for Investors may qualify for tax deduction for investing in failed start-upsinvesting in failed start-ups

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Public Housing Regulations Public Housing Regulations

• Amended Housing Regulations Amended Housing Regulations

• Permit HDB property owners to:Permit HDB property owners to:– Use their homes as their registered place of Use their homes as their registered place of

business business

– As a ‘garage’ to develop their productsAs a ‘garage’ to develop their products

• Subject to minor conditionsSubject to minor conditions

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Public & Statutory Board Public & Statutory Board PracticesPractices• Standard minimum requirements Standard minimum requirements

for public tenders and contracts for public tenders and contracts lowered to allow new start-ups to lowered to allow new start-ups to bidbid

Part IIIPart III

High Tech R&D and High Tech R&D and Business Opportunities Business Opportunities in Asiain Asia

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R&D OpportunitiesR&D Opportunities

Technology in demand now -Technology in demand now -

• Language translation technologies for Language translation technologies for US content into regional languagesUS content into regional languages

• Business uses for high speed Business uses for high speed connections in Singaporeconnections in Singapore

• Developing technologies for delivery Developing technologies for delivery of online education and services to of online education and services to rest of Asiarest of Asia

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Business OpportunitiesBusiness OpportunitiesBusinesses -Businesses -• Asian Content servicesAsian Content services• Super intermediary services for Asian Super intermediary services for Asian

retailers in USretailers in US• Supply chain solutions for SMEsSupply chain solutions for SMEs• Logistics & Distribution Centre in US for Logistics & Distribution Centre in US for

Asian businesses - and in Asia for US Asian businesses - and in Asia for US businessesbusinesses

• Innovative Culture-centric Marketing Innovative Culture-centric Marketing • World Class Asian Portal Sites - e.g. World Class Asian Portal Sites - e.g.

CNET AsiaCNET Asia

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Do it (Singapore) have Do it (Singapore) have what it takes?what it takes?

• Environmental factorsEnvironmental factors

• Finance & Venture CapitalFinance & Venture Capital

• Critical Mass of Innovators &Critical Mass of Innovators & Inventors Inventors

• Venture Capitalists and Start-Venture Capitalists and Start-upup Managers Managers

Thank You Thank You

Contact SingaporeContact SingaporeMs Serene TanMs Serene Tan210 Twin Dolphin Drive210 Twin Dolphin DriveRedwood City, CA 94065 Redwood City, CA 94065 email: singapor@aol.com email: singapor@aol.com tel: (650) 5913828 tel: (650) 5913828 url: url: http://www.contactsingapore.org.sghttp://www.contactsingapore.org.sg

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- End of Presentation -

Harry SK TanAssistant Professor

Nanyang Business School, S3-01C-102

Nanyang Technological UniversityNanyang Avenue, Singapore (639798)

Tel: (65) 790 4630Email: aharry@ntu.edu.sg OR

cyberlawprof@asia.com

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