In today’s dynamic business landscape, staying ahead of the curve is crucial. Research and development (R&D) often forms the backbone for business growth and expansion. It is not just about creating groundbreaking products – R&D can also help businesses discover new strategies to approach challenges and enhance their existing services. Through research and development, businesses have the opportunity to grow and reach greater heights.
Cost Concerns: A Hurdle for SMEs
The costs of research & development often deter and restrict the pursuit of these innovation opportunities, especially for SMEs. Even though there are existing initiatives such as the Open Innovation Platform and the construction of R&D hubs like Jurong Innovation District and Science Park Singapore, it can still be tough for small businesses as they are limited by resources or physical space.
Enterprise Singapore: Empowering SMEs Through Polytechnics
Enterprise Singapore recognise that SMEs in Singapore continue to face these financial and resource challenges in their R&D capabilities. Hence, various Centres of Innovation (COI) run by polytechnics were established to provide further assistance.
Finding the Perfect Fit: Polytechnics R&D Initiative
Singapore SMEs seeking to enhance their innovation capabilities but lacking the necessary equipment or expertise can find a solution through polytechnics. This program, facilitated by Enterprise Singapore, connects businesses with specialised workshops within polytechnics – known as Centres of Innovation (COI).
There are currently 12 COIs funded by Enterprise Singapore, located within the 5 local Polytechnics:
- Republic Polytechnic
- Nanyang Polytechnic
- Temasek Polytechnic
- Ngee Ann Polytechnic
- Singapore Polytechnic
Each COI focuses on a specific area of technological advancement, such as robotics or water treatment technology.
The program allows SMEs to leverage the polytechnics’ advanced facilities and resident expertise. Businesses can
- Identify the correct area of focus and aligning their innovation needs with the COI’s area of focus
- Collaborate with experts through access to the polytechnic’s well-equipped workshops and experienced personnel
- Protect their intellectual property (IP) concerns via translation support services
Although there is no specific requirement as to who can apply to these COIs, it is always good to perform more due diligence before committing to any business decision. More information can be found on the Enterprise Singapore website.
Benefits Of This R&D Initiative
1. Save on Costs
COIs eliminate the need for businesses to purchase their own specialised equipment, labs, and training programs for product and process innovation. Not only are they costly upfront, maintaining them will add on to the financial burden. Gaining access to R&D facilities allows your business to save on fixed costs and redirect that resource toward other business functions.
2. Upskill Workforce
COIs also provide opportunities to upskill talent through training courses and innovation projects. Employees will be exposed to industry and academic experts who can share knowledge with these employees, providing them with transferable skills and tips that they can apply at work. These experts also act as mentors to interns and allow businesses to develop talent even before they are offered full-time employment.
3. Business Growth
Polytechnics have cutting-edge facilities, specialised equipment and research expertise specifically designed to support R&D efforts. This allows businesses to develop innovative new products, improve their operations and achieve greater business success. Through this, businesses can become more productive, efficient and profitable.
Case Studies: Successful R&D Collaborations
Sanwa-Intec
These benefits were evident in the case of Sanwa-Intec, an SME that services the automotive industry. Their collaboration with Nanyang Polytechnic’s Automation and Robotics Innovation Centre increased their energy efficiency and boosted production value by 1.5 times, in addition to creating a safer work environment. Additionally, Sanwa-Intec was able to convert students on internships into full-time employees after the completion of their diploma courses. They capitalised on the opportunity to recruit experienced employees who were already familiar with the company and were able to adapt quickly into their new roles.
Aquast
Another SME that benefitted from Enterprise Singapore’s initiative is Aquast. Partnering with the Aquaculture Centre of Innovation Centre at Temasek Polytechnic to develop hatchery methods and technology, Aquast was able to start a high-tech crab farm built around the technologies innovated. Through this collaboration, they were successful in breeding better quality crabs, at lower fixed and variable costs and higher productivity levels.
SIM Solutions
Businesses can also solve supply chain management challenges through COIs, which is what logistics company SIM Solutions did. Partnering with the Centre of Innovation for Supply Chain Management (COI-SCM) at Republic Polytechnic, SIM solution solved their order processing problems. They were able to offer customers improved visibility on the status of their orders and halve the time needed for order processing, greatly improving operational efficiency.
Similar R&D Initiatives For SMEs
1. Technology for Enterprise Capability Upgrading (T-Up)
This scheme is supported by the Agency for Science, Technology and Research (A*STAR). Singapore SMEs can receive help from A*STAR scientists and research engineers for their R&D projects for up to two years.
Experts will share product development strategies, aid innovation in your business processes, and assist in developing innovative products. Businesses can receive up to 70% (capped at $250,000) support of the allowable costs and can apply via the Enterprise Singapore website.
2. Enterprise Innovation Scheme
Businesses engaging in R&D and innovation activities may qualify for enhanced tax deductions. Below are examples of activities that qualify and the tax benefits to be enjoyed:
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- Qualifying R&D undertaken in Singapore: 100% tax deduction on R&D expenditure plus
- Collaborations with local Polytechnics: 400% tax deduction on the first $50,000 of qualifying innovation expenditure.
Eligible businesses may also opt to convert up to $100,000 of their total qualifying expenditure for each Year of Assessment (“YA”) into cash at a 20% conversion rate. More information can be found on the IRAS website.
3. Employment and Employability Institute (E2I)
In addition to R&D efforts, another way to improve your business operations and boost growth is through quality training and recruitment of staff. E2I provides support in these aspects and is successful in increasing productivity and creating an optimal workforce in many companies including SMRT.
On top of all these initiatives, there are many other grants, such as the Enterprise Development Grant, available to SMEs in Singapore for R&D or other business support. However, business owners may get overwhelmed over which ones best suit their businesses. Our previous article on the SME grants available has a brief summary table to facilitate decision-making for business owners.
Grow Your Business With Poss Capital
Conducting R&D is often associated with investing back into the business and as with every investment, financial means are necessary. Moreover, R&D can be crucial for business growth and expansion, especially when your business is experiencing stagnant or low financial numbers.
While government initiatives provide valuable support, additional funding may be needed to fuel your R&D efforts. Poss Capital offers business loans with convenient terms to bridge this gap and empower your innovation journey. Focus on growing your business while we handle your financial needs. Contact us today for a fuss-free and seamless application.
