SINGAPORE'S NATIONAL RESEARCH AND DEVELOPMENT STRATEGIC THRUSTS

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SINGAPORE'S NATIONAL RESEARCH AND DEVELOPMENT STRATEGIC THRUSTS: 6.35 pm

Assoc. Prof. Ong Soh Khim (Nominated Member): Mr Deputy Speaker, Sir, I would like to declare that I am an academic and a researcher at the National University of Singapore. I would also like to declare that the points to be brought up next are solely my views and do not represent that of NUS.

Sir, I support and welcome the five strategic thrusts that were set out by the Ministerial Committee on Research and

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Development that would serve as broad guidelines to implement a comprehensive R&D strategy for Singapore. I would, however, like this House to consider certain points in transforming these thrusts from concept to reality.

_Thrust 1: Provide more resources for R &D in Singapore _

The Ministerial Committee has recommended a target that Singapore should achieve a national R&D spending of at least 3% of GDP within the next five years. I cannot agree more with this recommendation. It is certainly most exciting that the R&D budget will be increased for the next five years.

However, it is necessary to look into how these research resources will be used to transform Singapore into an R&D-driven economy. The question is: hopefully it is not a topping up of the existing agencies, but some new schemes should be in place.

Some possible new schemes are:

(1) New research scholarship schemes and more research scholarships in our universities to encourage more Singaporeans to pursue higher degrees;

(2) New incentive schemes to promote a higher level of private-sector R&D spending; and

(3) New mechanisms to enhance technology transfer from research institutes (RIs) and educational institutes to the industry.

Next, what would be our key performance indicators (KPIs) to measure the achievements of this comprehensive R&D strategy? We should not be relying on winning awards and competitions alone. Neither should we be relying on the total number of research publications and their citation counts. A country's

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performance in the knowledge-based economy is not measured simply by outputs of science and technology, but must also be judged in relation to the important goal of increasing competitiveness. Thus, we need to formulate a set of KPIs that is based on our unique characteristics.

With this increase in research budget, more centres of excellence and RIs might be set up in our educational and knowledge institutes. There are two points to consider.

Firstly, is there a need for so many RIs and centres of excellence in our educational and knowledge institutes, thus incurring unnecessary overheads?

Secondly, would the setting up of more RIs and centres of excellence duplicate each other's research activities and equipment, thus diluting the limited research resources available?

Sir, there has to be a synergy between the research in the universities, educational institutes and the RIs. I would like to propose a closer coordination of the research activities in the RIs, universities and the educational institutes to minimise duplication.

Next, we need to view this R&D spending from a macro perspective. China has experienced a very strong growth in its R&D intensity recently. In the July 2005 EU report on Key Figures 2005 for Science, Technology and Innovation, it was reported that China experienced a very strong growth in its R&D intensity over the recent years, with an annual growth of 10% since 1997, and that China will catch up with the EU by 2010 in terms of the share of GDP allocated to R&D. Sir, how will this strong growth in the R&D intensity of China affect the implementation of Singapore's R&D plan? Is our target of

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3% GDP within the next five years competitive?

Thrust 2: Focus on selected areas of economic importance where Singapore can be internationally competitive

In recent years, there appears to have been a shifting away of focus from engineering and physical sciences to life-science. Life-science appears to be the chosen discipline. Hence, the second thrust that we should deepen our capabilities in key clusters, such as electronics, chemical and marine engineering, look for new growth areas and two potentially interesting areas, namely environmental and water technologies, and interactive and digital media, is indeed very much welcomed by the research community in Singapore.

In focusing on selected areas of economic importance, it is essential to look at the research funds that have been set aside for life-science research in the last three years in relation to the research grants that have been set aside for engineering and physical sciences. We need to look at these statistics so that we can tilt the scale towards a more balanced distribution of research resources to other selected areas.

In addition, our current education emphasis seems to be very much focused on life-science. It appears that there has been too much emphasis on life-science education, as our primary and secondary schools, funding agencies, Institutes of Technical Education, polytechnics and universities are all investing in life-science research and study. Why is there a need for the ITEs and polytechnics to invest in life-science? Sir, someone once mentioned that even first-degree holders in life-science are only fit to wash test tubes. So, what do these ITE and polytechnic students wash?

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Have students been influenced into thinking that life-science holds the key to the future and taking up life-science as their future choice of study? A more important concern is whether this has reduced the crop, in particular good students, in taking up studies in engineering and physical sciences. To pursue research in environmental and water technologies and interactive and digital media, a good spread of students in the physical sciences and engineering, rather than just the life-science, is needed.

Economically relevant is usually at the end of exploratory or blue-sky research. A good balance is needed. Looking for new growth areas is a must. However, if the technology and basic sciences are available from elsewhere, there is no need for us to start from the ground as we can leapfrog such technologies and hire the best people in those areas.

We will probably need to start basic research of a slightly different nature, something unique to Singapore, for example, diseases affecting this region and not elsewhere, and sciences and technologies that will strengthen the ties with ASEAN member countries. Environmental and water research are good topics that have great impacts on ASEAN countries.

From an economic relevance viewpoint, scientific and technological innovations would appear to have more tangible outcomes. However, the humanities and social sciences should not be neglected. For example, demographic developments and their effects on medical insurance systems, public spending and the labour market, the analysis of family and its sensitivity to the economic and social contexts, and unique social and ageing issues in Singapore should be studied.

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Thrust 3: Provide a balance of investigator-led and mission-oriented research in strategic areas

I fully agree that there should be a good balance between basic investigator-led and applied and mission-oriented type of research. However, it should not be a "one-size-fits-all" ratio. It may not be so easy to decide on the ratio, as the ratio will vary from discipline to discipline. At the moment, the investigator-led type of research funding is very lean.

From the figures given in a speech by Dr Tony Tan on 11th August 2005, the FY2006-2010 R&D funding will be $5.4 billion for A Star and $1.05 billion for the Academic Research Fund. It can be observed that the funds allocated to A Star to carry out mission-oriented type of research is almost five times that of the funds allocated to the Academic Research Fund to carry out basic investigator-led research. Sir, with this big difference in research funding, how does the Government hope to provide a balance of investigator-led and mission-oriented research? It is essential to provide a very strong support to basic investigator-led research that is broadly aligned with the long-term strategic interests of Singapore so that we can build a solid foundation for scientific excellence.

Currently, the Academic Research Fund is administered by MOE. I am not sure if MOE should continue to manage the Academic Research Fund, as MOE is only an administrative body. To MOE, this is only one duty among hundreds of other functions that it has to cope with, and there is relatively little time and effort which it could afford on this. Thus, this duty should be delegated to an organisation that is managed by scientists and technologists, and serves nothing but one purpose, ie, best management of research funds.

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Sir, we need to develop our own talents in addition to bringing in foreign talents to supplement our R&D manpower. In Singapore, R&D careers lack attractiveness. The current low R&D intensity in Singapore results in few R&D positions, out-of-field employment, and possible emigration resulting in a brain drain. Making research careers more attractive is necessary to increase the inflow of science and engineering educated people into research positions to provide the R&D manpower that we need to move towards an R&D-driven economy. Increasing R&D positions in Singapore and providing a job-matching service for the PhD holders are two other methods to solve this problem.

At the local universities, there is always this stigma that students with weaker academic results are barred from doing research. Sometimes, research and academic capabilities may not go hand-in-hand. To increase our local talent pool, we should selectively pick and interview students who may be weaker academically but with strong research inclination and potential. I have personally come across such a student, and it took me great effort to convince the authority.

Currently, our universities rely heavily on foreign research students, and many of the researchers in the RIs are foreigners and/or naturalised Singaporeans. A very high percentage of the research students under the university research scholarship schemes are from China and India, with Singaporeans forming a very small percentage. Granting of US visas to foreign students has since been relaxed a few years after the 9/11 incident, and many foreign students are heading for US universities again. Hence, we need to encourage more local students to pursue research, otherwise we would not have the manpower for R&D.

Some observations on why few local students pursue higher degrees are:

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(1) The university research scholarship monthly allowance of $1,500 is not attractive to local students. This monthly allowance, however, is attractive to foreign students from the lower-income countries. To these foreign students, pursuing a higher degree in Singapore is almost like a paid "job", with the reward of a degree after the completion of the job.

(2) Singapore is often taken as a stepping stone by some of these foreign students who will either immediately or eventually move on to other countries after completing their higher degrees in Singapore. Hence, it does not really matter to them whether there is a job avenue in Singapore for them. However, the issue of job avenue in Singapore is important to local students pursuing higher degrees, as they would not want to be "forced" to go overseas for a job after getting their PhD degrees.

Enhancing the attractiveness of an R&D career, increasing R&D positions in Singapore, and more attractive scholarship allowance are some of the methods to solve this problem.

Some personal reasons why local students are not pursuing higher degrees are:

(1) The need to repay their education loans resulting from their basic degrees. In an MOE report, in AY2002, 77% of the intake cohort took up some form of study loans and, in 2003, 33% of the graduates are debt-ridden from these education loans;

(2) The need to work so as to contribute to the family income and finance the studies of their younger siblings;

(3) The need to work so as to accumulate CPF savings for the purchase

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of a flat to start a family after marriage; and

(4) Male Singaporean students typically view the two years of National Service as having "fallen behind" their peers from junior colleges, and hence the need to quickly start working to catch up.

To encourage more local students to pursue higher degrees, the research scholarships can be redesigned to address the concerns of these students. The universities and RIs can provide simultaneous on-the-job opportunities that could lead to CPF contributions for local research students. For example, these local students can be employed as research engineers in the RIs or as teaching assistants in the local universities while pursuing their PhDs. The university fees should also be made affordable to local students so that they are not debt-ridden upon graduation with basic degrees.

Another factor is the perception of local PhDs. A local PhD graduate is often viewed as "second-rate" among those who have obtained their PhDs from overseas universities, regardless of whether these universities are first-tier or otherwise. Local universities tend not to regard their own PhD graduates highly when recruiting staff for academic positions. A PhD graduate from the local universities has very slim chances of securing an academic position in the universities. The arguments given are usually that "the universities do not wish to promote in-breeding" and "many universities in the US do not employ their own PhD graduates either". The issue of in-breeding is a non-issue if this PhD graduate is able to work on different research topics from his PhD work in his subsequent academic career. Unfortunately, very few PhD graduates have been given a chance to prove themselves.

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In addition, Singapore has only three universities while the US has hundreds. Hence, it is not difficult for a PhD graduate from one US university to find an academic position in another US university.

Sir, this perception of local PhDs needs to be changed. It is ironical that local universities, having hired many overseas renowned research professors to supervise these research students, do not regard these PhD graduates highly. Why do we train PhDs if we do not even value our PhD graduates as potential academics? We can increase this recognition of local PhD graduates by way of offering some of the best to take up academic appointments.

_Thrust 4: Encourage even more private sector R &D _

Private sector drives technologies that are of immediate use to them. Economically relevant, no doubt, but they are not addressing technologies of the far future. If they are, such activities will be mostly conducted in their home bases and in the most confidential manner that will not benefit others. These are their "secret weapons". A good balance is again needed here: basic research to fuel the private sector, or a private-sector led applied research which is of immediate relevance.

In the July 2005 EU report, it was reported that 22.4% of the business R&D is performed by SMEs in the EU, 14.1% in US and 7% in Japan. To increase the percentage of business R&D by SMEs in Singapore, we would need to study and analyse the profile of these SMEs, such as their primary business activity and employees' qualifications so that new incentive schemes can be proposed to encourage these SMEs to engage in R&D activities and help them to align their R&D investments with commercial opportunities.

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To encourage more private sector R&D investments, we need to increase the efficiency with which new ideas are turned into new products, processes, services and solutions and improve the protection for intellectual property, so as to create a conducive environment for firms to increase R&D investment in Singapore.

_Thrust 5: Strengthening the nexus between R &D and business _

In strengthening the nexus between R&D and business, we need to bridge the gaps between the research in the universities and RIs and private sector research in MNCs and SMEs. There is a R&D value chain that can be considered here. Firstly, the universities can be responsible for most of the basic and fundamental research. This is followed by the RIs, which act as halfway houses and the next stage where discoveries and inventions from the universities can be transferred for further development into prototype systems and products. The last stage is the polytechnics, which can take the prototypes further and develop them into commercial products together with the companies.

Currently, most local research laboratories of MNCs and local large companies are application-oriented. Local SMEs are mostly only keen on short-term downstream application-oriented research that can provide solution for an immediate problem that they have experienced.

Traditionally, researches from the universities are often viewed to be too theoretical by the SMEs, local large companies and MNCs to be immediately useful to their needs. The IPs and technologies created by the universities and the RIs are rather basic and often too upstream for use by the SMEs. MNCs are less interested in these IPs and technologies created by the universities

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and RIs as they already have them from their headquarters and research laboratories. Thus, there is a need to ensure that the IPs, technologies and research developed by the universities and the RIs are relevant to these MNCs, local large companies and SMEs.

However, there are a few challenges:

(1) A university has to perform a certain amount of upstream cutting edge research to be on par with universities world-wide and to be ranked high internationally.

(2) SMEs, being small, have limited funding to channel into research.

(3) MNCs may not be keen to provide research funding to the RIs and the universities since they usually have their own research laboratories in Singapore and in their headquarters. And, by conducting research in their own research laboratories and headquarters, these MNCs own 100% of the IPs that will result from the research. Hence, it is not likely that local universities are able to secure large funding from these MNCs.

There are two possible solutions.

Firstly, a new industry-oriented Engineering Doctorate degree, which has been proven great success in UK and Europe, can be introduced in the local universities. These doctorate students can be existing employees in a company wishing to upgrade themselves through pursuing research in an area that is of relevance to the company, while continuing to work in the same company, or students from the universities being parked in companies to work on projects that have been proposed by these companies while, at the same time, participating in the activities of these companies.

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Their employers will co-fund the research that the students are working on, and provide a supplementary salary to these students. In return for the co-funding, the employers will have a first right to be the beta test site of the technologies developed and co-share the IPs. This will ensure that the research performed is of greater practical use and can be transferred to the industry. This will also make it attractive for Singaporeans to pursue higher degrees as they will receive a salary in addition to a scholarship allowance. The salaries paid to these students by the companies are a form of private R&D funding. Hence, companies will be more willing to participate and provide such R&D funding. This will encourage private sector participation, bridge the universities' research efforts with the industries and enhance the link between them.

Secondly, the polytechnics, which have industry networks, can be roped in to perform downstream application-oriented research. In the R&D value chain that I mentioned earlier, these polytechnics can partner the RIs on one hand and the SMEs on the other to perform application-oriented research that can provide immediate solutions to the technical needs of these SMEs. A research funding scheme can be set up for the polytechnics and the SMEs to jointly apply for grants to perform such research. The participating SMEs will be required to provide cash funding for a certain percentage of the total research project value.

Sir, in conclusion, I am glad that the Government has decided to put more emphasis on R&D, with the setting of the five strategic thrusts and providing the necessary structures and resources to support Singapore's R&D drive. I support them and hope to see many positive changes going forward.

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Mr Lim Hng Kiang: First, let me thank Prof. Ong Soh Khim for her support of the five strategic thrusts and, particularly, also for her several very innovative and interesting suggestions. I am sure we will take up all these suggestions in greater detail as we operationalise the five strategic thrusts.

Let me just respond quickly to some of the points she raised. First of all, I agree with her that what was set out in then DPM Tony Tan's speech of the five strategic thrusts sets out the broad strategic directions. We are now in the process of operationalising these programmes. And in doing so, of course, it will not just be more of the same. When the Government invests more funds and more resources, we will obviously look at new schemes, new opportunities and new programmes. So I would like to assure her that the money will not just go to existing schemes or just more of the same approaches.

In terms of the key performance indicators, I agree that the whole idea of the funds is to increase competitiveness and to create jobs for Singaporeans. We do need some performance indicators of inputs as well as outputs, but the final objective must be increased competitiveness of the Singapore economy and jobs for Singaporeans. Whether or not we need more centres of excellence and more RIs is something that we have to evaluate.

Basically, our approach would be to build upon our existing capabilities. Here, I would like to emphasise that the perception that she may have formed that life sciences is over-emphasised compared to other science and technology is a wrong perception. Our intention is to build upon our key clusters. If you look at the manufacturing sector in our economy, our key clusters are in the electronics and precision engineering, petrochemicals, transport engineering, particularly in

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marine engineering. We are strong in life sciences, but it contributes only 5% of our GDP. The other clusters contribute 22-23% of our GDP. As we go forward, we cannot just depend on life sciences alone. We have to build up several clusters of excellence and competencies.

I think her misperception has been answered somewhat by Mr Tharman just now in a response to her Question about the emphasis on life sciences education in our schools. Our parents can be trusted to know what is best for their children and they will be able to see, looking forward, where are the job opportunities in Singapore. That is where they will guide their children to excel in.

On the third thrust on having a balance between mission-oriented and investigator-led research, let me assure her that the primary priority would still be on mission-oriented research. We do need a balance with investigator-led research because we do need some basic research to complement our mission-oriented research. And when we bring in talent and develop our local talent, I do not think such talent will just be satisfied in doing mission-oriented research. So we need this balance. But overall, the priority must be on mission-oriented research that leads to competitiveness and jobs, rather than basic research for its own sake. If you look at the way the funding has been allocated in the past few years, this reflects our priority.

Prof. Ong also gave several suggestions about how we can develop our local talent. I agree entirely with her sentiments that we must develop our local talent. But, at the same time, I think she will agree with me that depending entirely on local talent alone will not be sufficient. We do need a complement of foreign talent. We will be shortchanging ourselves if we do not tap into the foreign talent from China, India and the surrounding countries. How do we attract

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these people here and encourage them to sink roots in Singapore? That is a tremendous challenge. With her inside knowledge about how local students respond to the research scholarships, and how foreign students respond to the research scholarships, these are useful feedback. We will look at how we can adjust the research scholarships to be able to attract more Singaporeans to take up a research career.

Today, we do aim for between 100-150 Singaporean students taking up a PhD scholarship and this target is within reach. We are very careful as we have a limited local talent and we do not want to encourage or direct the bulk of our local talent into a research career because the local talents have to be deployed in so many other critical areas. But I agree with her and I think all of us in the Ministerial Committee in R&D agree with her that research is not just a matter of academic excellence. It also requires a passion for research. We need to identify people who are not only academically talented, but also have the passion to do research. Only then, they will do well as researchers.

The fourth strategic thrust is to leverage the private sector R&D. This is very important because if the money is directed primarily at public sector R&D, I do not think we will have a proper check-and-balance on whether the money is directed at the right areas. With the private sector as a partner in directing the research, we can be more confident that the research will be directed at commercially-viable projects.

An important thrust of involving the private sector is also to involve our local SMEs. If you have read then DPM Tony Tan's speech, our intention is to build up the polytechnics and also our RIs to link up with our local companies, including the SMEs. So this sector will not be neglected.

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On the final thrust of reinforcing the nexus of R&D and businesses, the various points that she has raised are worthy of note. Especially her suggestion about PhD students being co-funded by companies, that is worthy of study and we will definitely look at this.

I would like to say that we do have successful collaboration between the companies and our research institutes. I can give two quick examples. Mitsui Chemicals, for example, has a very successful collaboration with our Institute of Chemical Engineering and Sciences (ICES). Another company, Degussa, for example, also has a similar arrangement with ICES to develop new lubricants. I believe some of these new products will find commercial applications. These are the types of collaborations that we are

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looking for to reinforce the nexus between our RIs and the companies. Of course, in the end, the intellectual property that we develop in our RIs must be put to commercial applications and to reinforce our competitive position.

I would like to thank Prof. Ong for the several good points that she has raised. I am sure we will follow this up as we operationalise the R&D strategy for Singapore.

Question put, and agreed to.

Resolved,

That Parliament do now adjourn.

Adjourned accordingly at

Seven o'clock pm

to a date to be fixed.