BT EXCLUSIVE

Singapore sprouts innovation centres

These centres focus on 'co-creation' of solutions with clients; some 25 have opened since 2017 with EDB's help

Singapore

PUTTING on your thinking cap?

Some professionals can now do so in dedicated "innovation centres", which are springing up islandwide. At least 25 such facilities have opened since last year, with the help of the Economic Development Board (EDB).

The agency's support for innovation centres is similar to schemes for other forms of investment, such as capability development grants and facilitating tie-ups with local partners. Other facilities not funded by the EDB include credit agency Experian's "Experian X Labs" and a new space for engineering firm Palomar Technologies.

Logistics multinational Kuehne + Nagel opened its Asia-Pacific innovation centre in March with an eye towards a three- to five-year set of research projects on smart warehouses.

But "the innovation centre was not created to manage one single initiative or project", added board member Gianfranco Sgro, noting that there were several reasons to set up shop here. For example, "a large number of our customers and suppliers as well as partners have located their innovation centres in Singapore".

"This innovative ecosystem makes visits and ideation sessions logistically much easier," said Mr Sgro.

All the same, "innovation centre" can seem like a big-tent term. These facilities cover a broad range of industries, from speciality chemicals to consulting and professional services, and carry out a variety of activities.

Some are research and development (R&D) hubs, such as carmaker Continental's third R&D building, which opened in June with a S$29.7 million price tag and was described by the EDB as one of the largest private R&D labs in Singapore.

Yet others are billed as interactive studios, such as 3M's new customer technical centre, which showcases technology such as work-at-height training simulators.

Janson Yap, South-east Asia innovation leader for Deloitte, noted that R&D and innovation centres serve different purposes.

"R&D focuses on developing new and breakthrough products, while innovation looks at a larger ecosystem and thinks about collaboration between partners to bring about a new experience, product or service offering to the marketplace," he said, adding that "both are still necessary".

A key theme in the innovation centres is working with clients in "co-creation" of solutions.

For instance, Yokogawa opened an "innovation space" in September this year, after setting up a global "co-innovation centre" in January 2016.

Kazuhiko Takeoka, chief executive and president of Yokogawa Engineering Asia, said: "These facilities focus on strong collaboration and partnership with clients and partners ... to develop the optimal portfolio of digital automation solutions and services to meet customers' goals."

The process, which he dubbed a "co-innovation journey", covers collaboration in areas such as the industrial Internet of Things.

Mr Takeoka touted the Tembusu Multi-Utilities Complex on Jurong Island as a success for the model. Yokogawa worked with the plant's manager from 2014 to 2017 to come up with a bespoke digital transformation solution to improve the reliability of both workers and equipment.

For example, the system studied how operators deal with critical situations, then automated routine operations. Mr Takeoka said that the system has cut human errors at the plant by 20 per cent, and reduced "abnormal events" by 30 per cent.

Meanwhile, New York-listed DXC Technology opened a digital innovation lab in October, on a separate floor at its office here - a move that regional vice-president and general manager Koushik Radhakrishnan suggested could give a large business the space to adopt the mindset, culture and workflow of a startup.

Among the benefits of such a facility, he said, is the opportunity for DXC experts to come up with solutions alongside clients, through proof of concept and prototyping. He cited a tie-up with the Singapore General Hospital for an artificial intelligence project to advise on prescribing antibiotics.

These centres want to be here for a long time, not just a good time.

Jun Ogawa, managing director for Singapore at JFE Engineering Corp, said that the Japanese group is in preliminary talks with parties such as the Nanyang Technological University to broaden the scope of its innovation centre and study environmental solutions and clean technology.

They are already working jointly on projects for using different kinds of waste as fuel or in engineering.

DXC, which is committed to hiring locally, plans to expand its digital innovation labs to Tokyo and Beijing, with Mr Radhakrishnan saying that Asian markets need "last-mile customisation for size and scale of transactions" and solutions for different languages and cultures.

Beh Kian Teik, assistant managing director at the EDB, said in a statement to BT that global firms have been "actively setting up innovation centres or outposts" in Singapore.

The rise of Industry 4.0 is fuelling investments in automation, machine learning and data analytics, Mr Beh said, while other innovation-related activities include the testing of new products and solutions, and value-added collaborations with local partners. "Singapore's strong fundamentals and a robust innovation ecosystem, built through years of dedicated investments in science and technology, have made us an ideal hub for ideas and innovations," he added.

Many firms were cagey about the size of their investments. But innovation centres are certainly not a dime a dozen. Public numbers for projects range from 3M's S$1.3 million centre to gas and engineering group Linde's first digitalisation hub outside Germany, which opened in February with a price tag of S$30 million.

Locknie Hsu, a law professor at the Singapore Management University who has studied foreign direct investment, said in an e-mail: "I would observe generally that the development is consistent with the government's plan to promote innovation and to raise skills levels in Singapore to meet the needs of the 'new economy'.

"As such centres will be part of the local ecosystem, they will be available to partner local businesses and academic or research institutions for collaboration. They could also assist local businesses in raising their technology know-how levels and their readiness to expand overseas."

Citing the over-use of "digital" and "disruption", Deloitte's Dr Yap warned that "innovation centres and activities that fall under that umbrella term tend to be clichéd after a while".

Still, EDB's Mr Beh said that Singapore has strong fundamentals and a robust ecosystem built on dedicated investments in science and technology.

"The fast-growing startup sector in Singapore is also providing an additional boost to our innovation capabilities," he added. "With more Singapore and international companies undertaking innovation and creating new products and services, we believe this will generate positive spillovers to local companies in terms of building capabilities, talent development and also creating more higher-value, skilled jobs for Singaporeans."