Singapore: Building cleantech ecosystems

This article is the last of three articles reporting on industry development initiatives in cleantech from around Asia gathered through meetings with investors, companies and governments in the countries. The focus on how cleantech drives jobs, investment and trade across Asia is enabling its leadership of the sector to be enhanced.

Singapore has seen the future growth of cleantech in the region and has acted decisively to build everything that is required to ensure the country secures the greatest benefits possible. Cleantech is one of the key industries which have been mapped by the country’s Economic Development Board (EDB) with the aim of ensuring future prosperity.

The Government does not necessarily want to see full-scale manufacturing capability undertaken locally but rather is looking to establish corporate offices and research facilities. This is an interesting strategy to retain all the high value activities whilst utilising the connections into neighbouring South East Asian countries to facilitate low cost manufacture where necessary.

To enable a full understanding of the sector, the EDB has developed a detailed cleantech ecosystem map and worked to fill any apparent gaps. This does not just focus on good technologies but also all the supporting services that help turn a good technology into a thriving business. One of the gaps that is rapidly being filled is that of early stage investment for cleantech, including the EDB’s own investment arm that is actively investing into global cleantech companies willing to relocate to Singapore.

In our work delivering the Australian Cleantech Competition, we believe that a good technology will provide about 20% of what is needed to build a good business. Singapore has recognised this and is using its ecosystem capabilities to attract global cleantech developers and then help them to build strong, export- focussed businesses.

International cleantech companies are offered assistance through the EDB that includes:

• Access to the collaborative hub at Cleantech Park in the Jurong West district and its recently launched Cleantech Incubator-accelerator.

• Test bedding opportunities in government owned buildings and other infrastructure.

• R&D Tax Incentives of up to 400% for the first $400,000 of qualifying R&D expenses spent in Singapore – R&D becomes a profit centre!

• Numerous grants available for Singaporean based cleantech companies to help with commercialisation and development expenses.

Anecdotally, the practicality of these offers may not always be quite as good as they first seem. However, the offer is certainly more attractive and positive than in most countries, Australia included.

Interestingly, the main focus of those operating in Singapore does not appear to be to provide solutions for the environmental problems in China or the massive Indian market, but rather to focus on the regional markets across South East Asia. The markets of Indonesia, Malaysia, Thailand, Vietnam and Myanmar offer a huge market and Singapore has the ASEAN framework and excellent working relationships to enable access. Looking further afield, the Middle East offers the next tier of opportunity in preference to the harder business environment in China.

One organisation that is a strong entry point to the Singaporean market is the Sustainable Energy Association of Singapore (SEAS), which represents 160 of the country’s leading cleantech companies. With our group of some of Australia’s best cleantech companies from the Australian Cleantech Competition, SEAS arranged a business speed dating session with their members. The results of this session were extremely productive with some very strong business relationships started and the real potential to access regional markets explored.

Singapore’ s long term vision of cleantech jobs, investment and trade is compelling and would silence many of the objectors that might be more vocal in a democratic system of government. This is similar to Korea’s strategy highlighted in a previous article, although due to Singapore’s limited domestic resources, it is focussed on attracting the world’s best to relocate to Singapore. The offers available are attractive and provide an option for Australian cleantech companies struggling to get traction at home.

Throughout this series of articles on Asian Cleantech Leadership, it is clear that the opportunity to generate jobs, investment and trade through developing cleantech industries is enormous. Korea and Singapore have recognised this as an export opportunity and China is developing capabilities to also resolve its massive environmental challenges. Whilst the focus is slightly different in each country, there is a common goal of seizing the emerging opportunities. Each country also recognises that Australia is a good source of innovation and, to some extent, sees this innovation and our poor record of commercialising it as an opportunity for them.

So the challenge for Australian policy makers is how we use this massive market demand and strong regional support to help grow Australian businesses and retain at least some of the benefits here. Some possible solutions to this challenge are:

• the development of joint investment funds to link finance and technology transfer;

• the facilitation of engagement between industry-led cleantech clusters; and

• specific business matching initiatives for leading cleantech companies.

However, all of these need proactive engagement by city, state or federal governments. Australia has an excellent technology reputation and has a chance to be secure significant and tangible benefits in cleantech jobs, investment and trade.

With some wise industry development policy, Australia has a very real and substantial opportunity to be part of Asia’s golden age of cleantech.

John O’Brien is Managing Director of Australian CleanTech (as it is currently called!), a research and broking firm that advises cleantech companies, investors and governments, works across Australia, China, Korea and Malaysia.