DEFENCE INDUSTRY (Percentage of R&D expenditure)

Dr Kanwaljit Soin asked the Minister for Finance how much of the national R&D expenditure (as a percentage of GDP) is channelled into the defence industry.

The Acting Minister for the Environment (RAdm Teo Chee Hean) (for the Minister for Finance): Mr Speaker, Sir, the most recent R&D survey for the year ending 1993 indicated that national spending on R&D amounted to about $998 million or 1.12% of GDP. Out of this, about 62% was incurred by the private sector. The public sector including the universities, research institutes and centres contributed the remaining 38%.

The format of the survey is in accordance with international norms for comparability. R&D done in the industry is classified into 10 major industry groups. There is no separate classification for the defence industry.

The strong growth of private sector R&D investments indicates the importance placed by the companies in R&D to enhance their competitiveness through science and technology. I would expect that companies in Singapore making defence products would, like other progressive companies, also invest in R&D. Their R&D expenditures are likely to be captured under the electrical and electronics, basic and fabricated metal, machinery and instrumentation equipment and information technology groups. Unfortunately, no breakdown into defence and non-defence expenditure is available, though I would expect that the overwhelming majority of this R&D expenditure is in areas that are not defence related.

Dr Kanwaljit Soin: Sir, as regards public expenditure on R&D, would the Minister consider finding out how much goes into defence, because this has nothing to do with the private expenditure?

RAdm Teo Chee Hean: The defence expenditure is all within the Defence budget, Sir.