NATIONAL SCIENCE AND TECHNOLOGY BOARD BILL

Order for Second Reading read.

The Minister of State for Trade and Industry (Mr Mah Bow Tan): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the purpose of the Bill is to facilitate the expansion and upgrading of the existing Science Council into a new organisation known as the National Science and Technology Board (NSTB). The NSTB will play a larger role in the promotion of R&D activity in Singapore and in the for- mulation of national science and technology policies.

I will elaborate on the functions of the NSTB later, but first, why a new statutory board? Over the last few decades, our economy has matured. It has moved from high dependence on entrepot trade, to one which is driven by the twin engines of services and manufacturing. This has enabled Singaporeans to enjoy a standard of living which is one of the highest in Asia. Singapore no longer competes on the basis of low wages, but rather on a workforce which provides value-for-money. In order to keep improving our standard of living and to justify higher wages, we cannot maintain the status quo, but must move our economy up to a higher plane of development by focusing on higher value-added economic activities. We need to do several things, including upgrading the skills of our workforce, especially technical skills, investing in technology and infrastructure, and investing in R&D, to exploit and to harness the full potential of the latest developments in science and technology.

In recognition of this, several research institutes have already been set up over the last few years and these include the Institute for Molecular and Cell Biology (IMCB), Institute of Systems Science, the Information Technology Institute, etc. In addition, two more institutes will be established next year, namely, the Institute of Microelectronics and the Institute of Manufacturing Technology.

We have also seen a substantial increase in the number of engineers and scientists over the years, which has served to encourage more foreign companies to set up R&D centres in Singapore. However, we need to continue our strenuous efforts in attracting more R&D expertise from abroad to strengthen our indigenous R&D capabilities. At the same time, given our limited resources, we need an organisation that can provide greater direction for the development of our science and technology human resources and the systematic identification of new and emergent technologies that will help contribute to our economic growth.

Sir, in the Budget debate earlier this year, if I remember correctly, in response to the hon. Member for Hong Kah GRC, Dr John Chen, I informed the House that MTI was studying ways to strengthen our coordination mechanism for R&D and our science and technology management structure. MTI has set up a group which includes officials from the Ministries of Finance, Education, as well as the Economic Development Board, NUS and NTI, and private sector representatives, to coordinate the R&D efforts of the various agencies. This multi-agency approach will ensure that we take a national perspective when we chart our long-term strategies for harnessing science and technology for economic development. Work has in fact already started. We have set up various expert committees with representatives from both public and private sectors. Each committee will make recommendations in their respective fields of expertise, and some of these fields include information technology, biotechnology, agrotechnology, and environmental issues.

Responsible for serving the main committee in the formulation and implementation of this master plan will be the new NSTB. So the purpose of the Bill which is being read a Second time today is to facilitate the expansion and upgrading of the existing Science Council to perform this larger role.

Sir, our expenditure on R&D as a percentage of GDP has increased three-fold over the last 10 years, up to the years 1978-88. Our figure for 1988 was just under 1% of GDP devoted to R&D. But this is still far behind the 2.5-3.0% of GDP which is currently the case for the major industrialised countries.

Even compared to the NICs like Korea and Taiwan, we are quite a long way behind. We have some catching-up to do. Taiwan, for example, already spent about 1% of GNP in 1986, and has set itself the target of achieving 2% by 1995. Korea spent 2.4% of GNP last year and has set itself an even more ambitious target of 5% by the year 2000. Both these countries have very high-level coordinated mechanisms for science and technology planning. In the case of Taiwan, they have the National Science Council; for Korea they have the Ministry of Science and Technology.

Such a coordinated mechanism to direct our long-term science and technology strategy is what we seek to achieve through the National Science and Technology Board. I must stress at this point that this greater emphasis by Government is by no means meant to dilute private sector R&D efforts. On the contrary, we recognise that the private sector should continue to be the main driving force in R&D activities. The role of the NSTB is to ensure a conducive environment and provide sufficient infrastructure and resources to support these efforts. So clause 5 of the Bill charges the NSTB with the following functions:

(i) to encourage and promote research and development in science and technology;

(ii) to coordinate the establishment and development of research institutes and other facilities connected with science and technology;

(iii) to undertake programmes and provide funds to promote and facilitate scientific and technological research and development in both the private and public sectors;

(iv) to assess scientific and technological manpower needs and engage in programmes for developing such manpower;

(v) to undertake exchanges and joint programmes with other national and international organisations; and, last but not least;

(vi) to promote activities to increase public awareness of the importance of science and technology.

Clause 6 of the Bill sets out the powers of the NSTB to enable it to carry out its functions effectively. These include the powers to finance research institutes, specific R&D projects undertaken by the private and public sectors, and the development of science and technology manpower. The NSTB will also be able to form companies or enter into joint ventures or partnerships. Such a private sec- tor approach will be useful in developing, for example, the Science Habitat, as a centre of innovation by providing research opportunities as well as social and recreational facilities to attract scientific talents.

Clauses 8 and 10 empower the NSTB to raise loans and invest money in trustee securities respectively. These are similar to provisions in other statutory boards.

Current employees of the Science Council as well as all existing contracts, assets and liabilities of the Science Council, will be transferred to the new NSTB. This is provided for under clause 18, read together with the Third Schedule.

Mr Speaker, Sir, economic success will depend increasingly on the strength of our R&D and our ability to harness the results of such R&D. The NSTB will be an important part of the total national effort required to meet the challenges of our next phase of growth in the 1990s and beyond.

Sir, I beg to move.

Question proposed.

Dr Wang Kai Yuen (Bukit Timah): Mr Speaker, Sir, the establishment of the proposed National Science and Technology Board (NSTB) under this Bill is timely. Besides the encouragement and promotion of R&D in science and technology, the Board will also be engaged in the coordination of the establishment and development of R&D institutes and other facilities connected with science and technology.

Mr Speaker, Sir, there is a dire need for a body to coordinate this activity in Singapore and to provide guidance and leadership to the numerous Government-funded R&D programmes which have been launched in Singapore in recent years. As the Minister has indicated, in high technology R&D there are now four research institutes in Singapore. In biotechnology, we have the Institute of Cell and Molecular Biology (ICMB) which is part of NUS. In information technology, we have the Institute of Systems Science (ISS), also under NUS, the Information Technology Institute (ITI) under NCB, and GINTIC for Computer Integrated Manufacturing under the Nanyang Technological Institute. Each of these institutes has headcounts approaching 100 researchers and annual budgets amounting to tens of million of dollars. It is also noteworthy that out of the four research institutes, three are in information technology. By this year, the combined annual budget of these three institutes would have grown to S$40 million.

I think, Mr Speaker, Sir, it has led to a situation where Singapore today, in fact, spends a higher percentage of its R&D money in computer related fields as compared to Taiwan and Korea. In this enthusiastic support for computer related R&D, it is possible that other equally important building blocks of industrial development might have been overlooked. I am glad to note that the Minister has pointed out that two additional R&D institutes, the Institute of Microelectronics and the Institute of Manufacturing Technology, will be approved later in the following year. And each of these institutes might have headcounts of 100 researchers and again tens of million of dollars in Government expenditures. Besides direct involvement in R&D, the Government, through its Science Council, has also handed out close to $50 million via its Research and Development Assistance Scheme (RDAS) since its inception to assist the private sector in its R&D efforts. Again, the EDB has its own Software Development Assistance Scheme (SDAS) and Initiative for Technology (INTECH) handing out another $20 million in R&D grants since 1985.

From a meagre beginning, Sir, science and technology R&D have blossomed into big programmes. As the Minister has pointed out, in 1978, the gross annual expenditure in R&D by both the private and public sectors was about 0.2% of GDP. By 1982, it has grown to 0.3%. However, by 1988, it has grown to 0.9% of GDP, which translated to dollars and cents, Sir, was about $370 million in expenditure, of which 40% was direct Government expenditure. Given that our GDP, in fact, has doubled over the decade as I mentioned from 1978 to 1988, the actual dollar expenditure has grown more than 10 times over this period of 10 years and with major increases squeezed into the last five years. With such rapid ramp-up in R&D efforts, Mr Speaker, Sir, it would not be surprising that certain inefficiency, redundancy can be found in these R&D efforts.

Furthermore, there is also only a limited pool of R&D personnel in Singapore. In fact, in the technological area, we are talking about 3,400 R&D engineers. This rapid ramp-up in Government-sponsored R&D has meant increased demand for these engineers. This increased demand has, in effect, removed valuable manpower from the industry, thereby depriving the industry of these valuable resources at the same time. And especially at times of severe shortage of manpower, doing so would aggravate the already tight labour market in our industry, leading to wage inflation and higher staff turnover. For instance, in the computer industry in 1989-1990, the staff turnover has been about 20% and wage inflation about the same order. This development, Mr Speaker, Sir, is definitely detrimental to the promotion of Singapore as an IT centre. Perhaps, during the period of high demand, it would be better if Government-funded R&D efforts could be curtailed or deferred until a period of lower demand. In the past, this was not possible but, perhaps, with the establishment of the NSTB, this might change. I am also glad to note that one of the objectives of the NSTB is to monitor and plan for the appropriate level of R&D personnel in Singapore. Hopefully under NSTB, similar problems that we have encountered in the past could be avoided.

Mr Speaker, Sir, it is clear that R&D is important for future industrial development. It is also stating the obvious that as we move up the technological ladder, we will reach a point where Singaporeans or Singapore industries can no longer imitate other people's technologies or even buy their technology. Thus, invest in the future in R&D we must. However, I believe the way the Government has gone about investing its R&D funds can be improved. My colleague, Dr John Chen and I have spoken on this issue during the last Budget debate. We pointed out that there was a need for a central coordinating body to manage the different and widespread R&D efforts currently underway. I am very happy to note that the Minister, in moving this Bill, is taking action to remedy the situation.

Mr Speaker, Sir, it is perhaps too early to know how the NSTB will play this important coordinating role - what organisational structure it will adopt and what philosophy it will pursue. However, I would strongly urge the NSTB to begin its work by reviewing the fundamental philosophy behind Government-sponsored R&D. In many ways, Sir, our current approach in R&D, in particular, those efforts in R&D institutes which are part of the universities, follow the American model. It is not surprising as many of our research personnel are US trained. The American model, Mr Speaker, Sir, is great for doing basic research, producing Nobel Prize winners. However, it has not known to work well in transferring technology from research laboratories into industry. In fact, in recent years, borrowing from the Japanese experience, the Americans have set up industry-wide joint consortia in an effort to get better value out of their R&D money.

On the other hand, the Japanese model of close collaboration between government and industry on joint R&D programmes under MITI has produced many outstanding successes. Also among NICs, like Korea and Taiwan, particularly in Korea, the Ministry of Science and Technology has produced a master plan for moving the country into the 21st century, again emphasising on joint industrial collaboration. Taiwan also has followed this model of joint government and industry collaborative effort and its R&D effort has also produced some impressive results. For example, today Taiwan is the world's leading producer of IBM PC compatibles. This very strong position is the result of the government-sponsored R&D effort, producing R&D technology which is then made available to the industry.

Mr Speaker, Sir, Singapore is a small country. No matter how much we spend on R&D, we are unlikely to match the efforts in countries like US, Japan, UK, Germany and France. Even if we have all the money, we are also unlikely to find enough people to make our presence felt in the global competition for technological leadership. Hence, we should be selective in our choice of R&D areas and focused in our R&D efforts. I am glad, in this instance, that the Minister has mentioned the NSTB will oversee a master plan in our R&D programmes. I hope under the NSTB, a small dose of realism can be injected into some of the more esoteric Government-funded R&D programmes where the end results tend to be just some published academic papers. The NSTB should adopt a more pragmatic approach in evaluating the R&D programmes under its purview. For instance, we should make sure that we have a comparative advantage before we embark on any R&D efforts.

Mr Speaker: Order. Mr Wong has to move a motion before 4 o'clock.