: [Opinion] Deep Tech: Unlocking New Engines of Growth for Singapore
First published in The Business Times on 3 October 2024.
SINGAPORE stands at a pivotal moment. We must find new ways to grow our economy amid an increasingly complex global environment and to address critical challenges such as energy transition and an ageing population. As Prime Minister Lawrence Wong emphasised in his inaugural National Day Rally, we must “work even harder to stay competitive and push the frontiers of innovation and productivity”.
Deep tech – advanced technologies based on scientific research and focused on complex problems – presents us with the opportunity to push the bounds of innovation. By leveraging technologies to solve the world’s most pressing issues and fostering sustained Stem (science, technology, engineering, and mathematics) investments from both public and private sectors, Singapore can unlock new engines of economic growth.
Strong foundation
The Republic has a strong foundation to build on.
In 2024, we are ranked the fourth most-innovative country and seventh top-startup ecosystem in the world, recognised for our favourable business climate, strong intellectual property protection, world-class universities, and highly educated talent pool. With over 500 venture capital firms and more than 220 incubators and accelerators, Singapore has emerged as the premier startup investment destination in South-east Asia, accounting for over 70 per cent of all venture capital raised in the region. We host several corporate labs established by multinational companies (MNCs) in collaboration with local institutions, such as Applied Materials’ partnership with the Agency for Science, Technology and Research (A*Star).
Other MNCs have also based their corporate innovation labs here, such as global leader in crop nutrition Yara which launched its open innovation hub in Singapore earlier this year.
In addition to its research strengths in materials and life sciences, Singapore is gaining recognition in emerging technology fields. The Centre for Quantum Technologies at the National University of Singapore, for example, is ranked sixth globally based on the h-index, a metric of publication impact.
All these factors have enabled the Republic to become a global hub for innovation and entrepreneurship. But what will it take for us to cultivate a deep-tech ecosystem on a par with Boston, Silicon Valley and the United Kingdom?
Small numbers, large impact
First, deep tech will not be a numbers game.
Singapore is now home to over 4,500 tech startups, with more than 75 per cent in the digital and Internet economy sectors. The early efforts of then Spring Singapore seeded a conducive environment for startups to grow and flourish, driven by the sheer entrepreneurial spirit of founders armed with enterprising ideas and ace programming skills, for instance to build e-commerce businesses. There is a natural synergy for such startups to thrive in Singapore, given our position as a business services hub and proximity to the growing markets in South-east Asia. This continues to be important to our economy and a source of great business innovation.
Deep-tech startups are of a different nature. They require long development periods and substantial capital investment, especially at growth stage, such as for production lines, industrial scaling, or clinical trials. Thus, we can expect relatively fewer deep-tech startups to emerge and grow from Singapore. However, their potential for impact is substantial.
Consider Amperesand, which develops efficient and intelligent solid-state transformer systems with applications for electric vehicles, microgrids and data centres. Incubated at Nanyang Technological University and invested in by Temasek’s Xora Innovation along with global investors TDK Ventures and Material Impact, it raised US$12.4 million in a seed round in February 2024, significantly exceeding the median seed round value in the region.
For the government, this means that it needs to make a careful assessment of which specific domains to prioritise that have the greatest potential for growth. The selection of the domains will require rigorous techno-economic analysis, a deep understanding of the scientific and technological developments, and a convening of global experts and corporates from the field. Still, it will not be an exact science but will call for visionary and bold decision-making.
An ecosystem approach
Second, deep-tech startups require extensive support.
Access to robust venture-building resources significantly increases their chances of success. Venture builders are a niche group of firms that provide the “zero-to-one” support for founders, including initial funding, mentorship, assembling teams, and advice on technology and product development. Notably, leading global venture builders can connect startups with scientific experts and corporate networks from around the world, facilitating technological breakthroughs and securing follow-on funding.
Enterprise Singapore is actively collaborating with a small number of deep-tech venture builders, which play an important role for translating intellectual property from public research institutions into viable products and businesses. For example, we work with Xora, Wavemaker Impact and Matter Venture Partners together with the Economic Development Board (EDB) in the physical sciences and engineering domain. We have also signed an agreement with Temasek and Breakthrough Energy, a climate tech organisation founded by Bill Gates, to source for and support ground-breaking technologies from Singapore and the region that address climate change.
Commercialising deep tech is complex. Startups must advance their research through prototyping and productisation stages, often facing prolonged developmental timelines. Strategic partnerships with industry and domain experts are vital to expediting this process. In artificial intelligence, partnerships with tech giants Google Cloud, Amazon Web Services, and Nvidia provide startups with an acceleration platform and valuable insights and networks. Government initiatives, including the Startup SG Tech grant, further support technology development and commercialisation efforts.
Open innovation also plays a crucial role, allowing large corporates to source technologies from startups while offering real-world test environments for technology refinement. For instance, EDP Renewables recently collaborated with Singapore startup EtaVolt to pilot technology aimed at extending the lifespan of solar panels.
One significant challenge for deep-tech startups is securing sustained financing throughout the longer commercialisation journey. To address this, Seeds Capital, the investment arm of Enterprise Singapore, has increased its co-investment cap for deep-tech startups from S$8 million to S$12 million and expanded its investment mandate to early growth-stage startups. In 2025, Seeds and EDBI will merge to form SG Growth Capital, enhancing our expertise in deep-tech financing and support across the various stages of growth.
Go big or go home
Third, deep-tech startups will need to compete on a global scale and have a global presence. Because of the intense global competition and the scale of the challenges facing the world today, it is imperative that we build startups that are able to scale internationally.
One of Singapore’s biggest strengths is our strategic location in South-east Asia. We are at the heart of one of the fastest-growing regions in the world, with untapped potential in deep-tech areas such as renewable energy and agri-tech.
Given our natural constraints, attracting deep-tech startups is also an important strategy. We must actively court the best and have more international startups and talent land in Singapore, to add depth and diversity to our ecosystem. For example, US-based Ambiq Micro established its technology design centre in Singapore in 2022, bolstered by the efforts of EDB, and has since expanded its operations. The Global Innovation Alliance further enables connections with leading innovation hubs worldwide, enabling co-innovation partnerships and market access for Singapore-based startups. It also provides international deep-tech startups a pathway to enter our market, as a gateway into South-east Asia.
Industries and enterprises of the future
Creating a deep-tech ecosystem that will give rise to the growth industries and enterprises of the future will be a challenging task. But this is not new to Singapore. We started our Biomedical Sciences Initiative in the early 2000s and today are seeing the fruits of our investments – a thriving biotech sector with companies making waves internationally, a pool of dynamic and innovative talent, and investments from global investors including Coronet Ventures of Cedars-Sinai and Flagship Pioneering.
“Far and away the best prize life offers is the chance to work hard at work worth doing,” said Theodore Roosevelt in a speech made 121 years ago. Whether it is in curing diseases or discovering a continuous green energy source, the contributions that a deep-tech ecosystem can make to Singapore’s economic progress or to humanity at large is surely a worthwhile endeavour.
The writer is assistant managing director, innovation, at Enterprise Singapore
Source: The Business Times © Singapore Press Holdings Limited. Reproduced with permission.
