Singapore-based Companies that have Invested in Government's Overseas Industrial Park Projects

Mr Speaker, internationalisation remains an important strategy to sustain Singapore’s growth by helping our companies develop beyond our domestic market. Government-to-Government (G-to-G) projects, such as the Suzhou Industrial Park (SIP), Tianjin Eco-city (TEC), Chongqing Connectivity Initiative and the Amaravati Capital City project in Andhra Pradesh, play an enabling role in paving the way for Singapore companies to enter and scale up in fast-growing markets, such as China and India.

Over the years, many Singapore companies have tapped on these G-to-G platforms to go abroad. In the case of SIP, about 340 Singapore companies have established their presence there as at the end of 2016. Of these, approximately 70% are small companies with registered capital of up to S$1 million. Cumulative contractual investments by Singapore-based companies in SIP amounted to S$9.4 billion by the end of last year. The National University of Singapore has also established a research institute, the NUS (Suzhou) Research Institute (NUSRI), in SIP which has served as a springboard for Singapore startups to incubate and scale up in China. NUSRI is currently incubating 37 Singapore and international technology startups.

Just to give Members an example of a company that has benefited from SIP and scaled successfully is PatSnap, founded in 2007, a Singapore company that offers innovative patent data analytics solutions. So, to overcome the small domestic market constraints, they scaled up by first going overseas to SIP and today their software has been sold in over 40 countries to more than 1,300 clients. In March this year, the company announced its plans to invest S$22 million in a research and development (R&D) centre in Singapore to further develop its intelligence platform. To date, the centre has hired more than 10 data scientists.

The TEC project was established in 2008, against the backdrop of rapid urbanisation and heightened focus on sustainable economic development in China. As of June this year, 42 Singapore companies are registered in TEC, with a total registered capital of more than S$220 million. Companies include small and medium enterprises (SMEs) in a range of sectors, such as environmental services, property, education, urban solutions and logistics.

Singapore’s newer G-to-G projects continue to bring our companies to new regions and markets to help them gain a first-mover advantage. The Chongqing Connectivity Initiative project, which was launched in 2015, has opened up business opportunities in the less developed western region of China, and facilitates the participation of Singapore companies in sectors, such as financial services, aviation, transport and logistics, and information and communications technology.

Similarly, the Amaravati project to build a new capital city in Andhra Pradesh will give Singapore companies the opportunity to export our expertise in urban solutions and other domains. With our early involvement in the initiative, our companies, including SMEs, will be well-positioned to offer their services and participate in projects within the state of Andhra Pradesh as well as in the broader Indian market.

I thank the Minister for his response. Just two follow-up questions. One is on the Tianjin project. Of the 42 companies, would the Minister have the proportion which are SMEs? And then the second question is really on whether the Ministry of Trade and Industry has studied the issue of the impact of these investments on domestic operations and what is the positive feedback loop? So, to what extent are domestic operations impacted and in what way, from these investments overseas, whether there is any study or any data in that regard?

I am sorry. Just wanted to know the 42 companies in TEC. What proportion are SMEs, if the Minister has that data?

I do not have the data on that offhand. But I would imagine and, indeed, our experience in general has been there is no reason to think it is terribly different from what we have had in SIP and other places, which is about 70% or two-thirds. In general, when companies go overseas, they do not just do it on their own. They go because there is a larger opportunity arising from whether it is a G-to-G project or some other element that is initiating it, such as one of their large clients going overseas and then they go with them. So, I would say it is not unusual to see about two-thirds, but I do not have an exact answer for the Member.

The larger question is whether there is a value proposition back to Singapore. This is where what I have emphasised earlier and which is worth repeating, whether it is through G-to-G projects or through other initiatives to take our companies overseas, or free trade agreements and other initiatives to help our companies internationalise, what is the fundamental objective? First, it is to help our companies grow beyond our domestic market; second, with that skill, it allows them to undertake a broader range of initiatives and invest more in their capabilities; and third, it allows us to also create good opportunities for Singaporeans, not just in terms of pursuing opportunities in these other markets, but also in developing capabilities here. So, I gave Members the example of the patent company where they are doing R&D in Singapore that creates 10 new jobs which were not there before.

So, there are ways to track it, and we look at it. Certainly, when our agencies extend assistance to companies when they go overseas in terms of grants and so on, this becomes an important key performance indicator.