WORLD KNOWLEDGE COMPETITIVENESS INDEX (Singapore's ranking)

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WORLD KNOWLEDGE COMPETITIVENESS INDEX:

(Singapore's ranking): 13.

Mdm Halimah Yacob asked the Minister for Trade and Industry (a) what are the implications of Singapore's poor ranking in the World Knowledge

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Competitiveness Index; and (b) whether the ranking will affect Singapore's efforts to move up the value chain in the manufacturing and services sectors.

Mr Raymond Lim Siang Keat (for the Minister for Trade and Industry): Mr Speaker, Sir, in the World Knowledge Competitiveness Index 2003, Singapore was ranked 90th out of 125 regions compared to 65th out of 90 regions last year. Our low ranking is due to two main reasons. First, our rating has been dragged down by cyclical factors, such as higher unemployment and low productivity due to the current economic slowdown. Second, two-thirds of the 35 new entrants in this year's Index are regions from developed countries such as Japan, Canada and Sweden, which typically have more established knowledge capabilities. Although Singapore's absolute rank has fallen from 65th to 90th, our relative rank has remained unchanged at the 72nd percentile.

Nevertheless, the Index highlights the fact that competition occurs between regions rather than countries, and suggests that Singapore's infant R&D scene still has some way to grow before it can match the concentration of resources and talents in some of the mature centres. Our private sector expenditure on R&D and patent creation are lower when compared to the most competitive regions in the world.

The ranking in the World Knowledge Competitiveness Index does not affect our efforts to move up the value chain in the manufacturing and services sectors. We are already doing many of the things that are necessary for Singapore to move up the value chain, which the Economic Review Committee had recommended. I will elaborate on our efforts to strengthen our knowledge capabilities in the two weak areas highlighted by the World Knowledge Competitiveness Index, namely, education and R&D.

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We place great emphasis on education and have been reforming our education system to equip our young with the relevant skills for a knowledge-based economy. For instance, schools are now offering a greater diversity of education programmes that will give their students a strong multi-disciplinary foundation. To encourage life-long learning across all levels of society, we have set up the Workforce Development Agency to champion continuing education and training.

We continue to scale up our R&D efforts and implement initiatives to improve the effectiveness of R&D and translate more scientific discoveries into commercial results. With the launching of Biopolis, the world's first integrated, purpose-built biomedical research complex, biomedical scientific talent and research will have a new focal point in Singapore. The Research Institutes are launching programmes and collaborative projects, with local universities as well as renowned international centres, to take advantage of pooled expertise and resources. For instance, the Institute of Microelectronics (IME) is collaborating with the Tokyo Institute of Technology, NUS and the Institute of High Performance Computing (IHPC) as part of the Nanoscience Initiative to develop the latest generation flash memory devices. Under the recently launched Growing Enterprises Technology Upgrading (GET-Up) programme, our Research Institutes are helping local companies upgrade their technological capabilities through seconding staff as technical advisors and joint development projects.

With these efforts, we hope to improve our knowledge capabilities and close our gap with the more developed regions. This will however be a long-term undertaking.

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Mdm Halimah Yacob: Sir, first, I would like to thank the Minister of State for his very comprehensive reply. According to the report, one of the reasons why our ranking has gone down is that Government's spending on R&D has gone down, not only private sector investment in R&D. Would the Minister of State please give an explanation on that as well?

Mr Raymond Lim Siang Keat: Mr Speaker, Sir, I would give some figures so that we have a sense of our spending on R&D. Our gross expenditure on R&D as a percentage of GDP has actually gone up. In 1995, it was 1.15%. In 2002, it was 2.19%. What has actually dragged down our position in the Index, if you look at the breakdown, has really to do with our per capita public expenditure on primary and secondary school education. But this by itself is not a robust indication of the quality of our education. Despite our lower levels of education expenditure compared to some of the more developed countries, as Members all know, our secondary school students are consistently ranked among the best world-wide for Mathematics and Science achievements. Our education system is also well known for developing more fully the potential of students from less resources committed.