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Software Development

Singpore’s IT sector is dominated by it’s electronics manufacturing rather than it’s software development industry.  In 1997, Singapore’s information technology industry sold about $12 billion worth of hardware, software and related services.  This is a 30% increase over revenues for the same sector in 1996.    

Within the technology sector, the software industry experienced the highest growth rate from 13.8 percent in 1996 to 30.7 percent in 1997[1].  Even though the software industry had the highest growth rate in 1997, it is still overshadowed by their electronics manufacturing.    

Software Companies

Singapore has many multinational companies that are located in this city-state.  The predominate software and services companies include:

• A.T. Kearney. Inc
• ACA-Pacific Technology Pte Ltd             
• ACI Worldwide (Asia) Pte Ltd
• Andersen Consulting
• AP Link Pte Ltd
• Assetline Asia Limited
• Collective Creation International Pte Ltd
• Data Storage Institute
• eGlobal Technology Services
• GES Singapore Pte Ltd
• HongGuan Technologies (S) Pte Ltd
• Intraco Ltd
• Premier NetworX International Pte Ltd
• Swee Hong Exim Pte Ltd
• Syspro Impact Software Pte Ltd
• Wills Information Technology Pte Ltd             
• Wincom Software

High-Tech Start Ups

Singapore lags behind other countries like Hong Kong and the United States in terms of high-tech startup companies [2].  Singapore seeks to be the next Silicon Valley; however, there are many challenges that face Singapore in order to do this.  One of the biggest challenges is Singapore’s consistent labor shortages and more and more Singaporeans are leaving the country to wok in the US high-tech industry. 

In an interview with Trade Minister George Yeo, he explains that luring international talent is key to turn Singapore into an innovative island for high tech start-ups.  Minister Yeo believes it is unrealistic to have a lot of startups with out additional resources, since Singapore’s population is 3 million with 1 million foreigners.[3]  There are 3 critical success factors for Singapore to become another Silicon Valley.  These success factors include:

1. Focused areas of research and development
2. Sufficient financial support
3. Talented resources

1) Research and Development

High tech companies tend to spin off from research institutes. As a result, Singapore is investing in niche R&D and not participating in R&D for areas that Silicon Valley already dominates such as browsers, multi media, and electronic commerce [4].  For example, Singapore is looking to focus on things such as multi-lingual software. To foster R&D, the Singapore government funded the Singapore Research Park.  Singpore recognizes that high tech start ups are a result of focused research and development and have even begun to sponsor research park in other countries such as China.  

Singapore Research Park houses more than 300 multi-national corporations, local companies and research institutes.  There are more than 7,000 researchers, engineers, and scientists employed within the research park.  This was a government initiative that was privatized in 1990.  The government wanted  to provide new infrastructure needed to promote R&D in Singapore[5].  A sample of the companies located in the research park include:  

• Sony
• Silicon Graphics
• Lucent Technologies
• Seagate Technology International
• MCI Worldcom Asia
• Motorola Electronics

2) Financial Support  

Startups can be funded privately or publicly.  The National Science and Technology Board plays a key role in allocating government R&D IT funding.  However, the grants provided by the government are often reimbursement grants where the start up spends the money first and then requests reimbursement.  This approach to funding is a barrier to entry for many entrepreneurs.  Singapore will need more and more public money to fund start-ups but can continue to rely on the government to fund large R&D initiatives.    

3) Resources  

Singapore, like the United States, needs talented technical and marketing staff to contribute to successful R&D.  To contribute to the difficulties of finding the right resources, multinational companies (MNC) often pay more than a start-up, which is very attractive to Singaporeans, who are risk adverse as it is and will avoid joining a start up in order to go with a more stable job with a MNC.  Singapore has looked to off shore companies to provide resources.  As an example, Infocomm Development Authority of Singapore entered into an agreement with NIIT Asia Pacific Ltd to bring in over 1,000 information technology professionals to Singapore in an effort to source high quality manpower in order to meet the shortage.[6]

Singapore also suffers from brain drain.  Minister Yeo recognizes that A large pool of the Asian talent is currently in Silicon Valley,   Southeast Asia needs to create the same vibrancy so they can then attract global IT companies and retain their pool of talented IT professionals.[7]

Conclusion

Singapore is not a major player in the software development sector.  Singapore would like to be the next Silicon Valley and be a nation of high-tech start ups.  In order to achieve that goal, Singapore must focus on research and development, invest more venture capital into start ups and attract good talent from within their country and abroad.  

[1] Singapore Informap, Singapore National Web Site, www.sg

[2] McNulty, Shiela. 2000. Equipping a people for a new economy. 13, September.

[3] Yeo, Geroge. 2000.  Interview: Building a Silicon Valley in Singapore. Business Week Online, 19, June.

[4] 1998. Singapore: Silicon Valley of the East? Computerworld. June 6 – July 12.

[5] Singapore Science Park, www.sciencepark.com.sg

[6] Tam, Ariel. 2000. Untitled. Zdnet Asia. 30, August.

[7] McNulty, Sheila. 2001. Untitled. Financial Times. 11, January