Target Ratio for Public vs Business Expenditure on Research and Development

Mr Laurence Lien asked the Minister for Trade and Industry (a) what is the target ratio for Public Expenditure on Research and Development (PUBERD) to Business Expenditure on Research and Development (BERD); (b) whether the higher PUBERD to BERD ratio in the last three years compared to the previous three years is a cause for concern; and (c) how else is the Government measuring and tracking the outcomes of PUBERD.

Under the Research, Innovation and Enterprise 2015 (RIE2015) masterplan, the Government has committed to invest $16.1 billion between 2011 and 2015 to support research and development (R&D) in Singapore. This public expenditure on R&D (PUBERD), representing 1% of Singapore's GDP, is aimed at raising the overall gross expenditure on R&D (GERD) by catalysing private-sector R&D.

Our base of research and development capabilities has made Singapore an attractive location for MNCs to locate their R&D facilities. Over the last three years, companies, such as Applied Materials, Chugai Pharmaceuticals and Proctor & Gamble (P&G), have set up major R&D facilities in Singapore, and are collaborating with public-sector research performers, such as the A*STAR research institutes and our Universities.

The tapering of the business expenditure on R&D (BERD) to PUBERD ratio in the last three years, compared to the previous three years, is not necessarily a cause for concern. It is common for a country's BERD to experience short-term fluctuations, because BERD is dependent on macro-economic conditions, as well as individual companies' investment decisions. The effect of the latter is particularly pronounced in Singapore due to our small but growing R&D ecosystem. Over the past decade, while the ratio of BERD to PUBERD in

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Singapore has fluctuated between 1.5 and 2.5, absolute BERD has more than doubled, from $2.1 billion in 2002 to $4.6 billion in 2011. Over the last three years, BERD has grown at a compound annual growth rate (CAGR) of 11.5%, from $3.7 billion in 2009 to $4.6 billion in 2011.

Public R&D agencies are generally on track in the implementation of RIE2015 plans. Besides the growth in BERD, the Government tracks many other outcomes of our public R&D efforts, such as the research excellence of public-sector research performers, growth in public-private research collaborations, technology commercialisation and research manpower development.