On 8 January 2016, the Research Innovation Enterprise 2020 Plan ("RIE2020") was announced. 17% of the RIE2020 budget will be set aside to develop Singapore's Innovation and Enterprise ecosystem, such that advancements in the laboratory can be effectively adopted by local businesses. Singapore's small and medium enterprises ("SMEs") as well as large local enterprises ("LLEs") will stand to gain in their Research and Development ("R&D") efforts, with an array of R&D-related grants and incentives currently offered by government bodies.
A boost for small businesses
For SMEs, one such scheme is the Innovation and Capability Voucher ("ICV"), funded by The Standards, Productivity and Innovation Board ("SPRING Singapore"). The ICV is an easy-to-use voucher capped at S$5,000. Businesses can use to the vouchers to redeem R&D-related services from service providers to upgrade their operations. The ICV is targeted at local SMEs that have either an annual turnover of not more than S$100 million or less than 200 employees.
These SMEs can also apply for the Capability Development Grant ("CDG"), funded by SPRING Singapore as well. The CDG provides for up to 70% funding support for an SME's upgrading efforts in selected development areas such as technology innovation, and intellectual property and franchising. Additionally, the application process for grant support of S$30,000 or less is more simplified so as to encourage more SMEs to build business capabilities.
Defraying high costs of R&D
There are also other schemes by various government bodies that both LLEs and SMEs can apply for to help defray costs in developing their R&D capabilities. These schemes have a stronger focus on R&D in general, as opposed to the SPRING Singapore grants that specifically aim to boost local SMEs' productivity.
The Singapore Economic Development Board (EDB) has two such schemes, namely the Research Incentive Scheme for Companies (RISC) and the Initiatives in New Technology (INTECH) and. The two schemes support a percentage of the costs of developing the business's R&D capabilities and applying these industrial R&D respectively.
Local businesses can also receive tax benefits for their innovation efforts under the Productivity and Innovation Credit ("PIC") Scheme by the Inland Revenue Authority of Singapore (IRAS). Businesses enjoy 400% tax deductions or allowances on up to S$400,000 of spending annually in each qualified R&D activities. Additionally, SMEs will enjoy a larger expenditure cap of S$600,000 under the PIC+ Scheme.
In the new RIE2020, the Singapore government has committed S$19 billion to support the country's R&D efforts over the next five years; a significant 18% increase compared to RIE2015's budget five years ago. With this in mind, going forward, businesses will find it easier to overcome the inertia of innovation with the help of government grants and monetary benefits.