Exploit Technologies aims to help Singapore establish and expand innovation ecosystem

TEN years on, Exploit Technologies Pte Ltd (ETPL), the technology transfer unit of Singapore's Agency for Science, Technology and Research (A*Star), wants to focus more on helping start-ups generate revenue and shaping a wider innovation and start-up ecosystem for the country.

"We've focused very much on building patents for the last 10 years; over the last five years, we've said, 'Now that we have a treasure trove [of patents], let's get it [into the marketplace],'" says ETPL CEO Philip Lim Feng at a recent media briefing to mark the organisation's 10th anniversary.

So far, ETPL has helped manage more than 3,500 active patents and applications out of A*Star's R&D efforts. More importantly, it has granted more than 400 licences to other companies, which can expect to reap more than S$500 million in revenue selling products using such technology. ETPL believes it can do better for the next five to 10 years. "We are now on a new trajectory, ready to take a steeper climb," says Lim.

Of the more than S$500 million in commercial revenue realised so far, some S$40 million was generated last year. This year, there is a "good chance" that the number can double and, from next year, the figure is expected to increase to more than S$100 million a year, he adds.

R&D in Singapore is increasingly serious business. Under the five-year plans, spending in R&D by the various institutes and universities was S$2 billion between 1991 and 1995, and S$13.9 billion between 2006 and 2010. Under the Research, Innovation and Enterprise plan, S$16.1 billion has been budgeted for 2011 to 2015.

A large proportion of the monies is managed by A*Star, the lead government agency in charge of developing the country's technological capabilities in fields such as electronics, materials engineering and biotechnology. Currently, for every dollar contributed by the public sector, Singapore's private sector is spending more than two dollars in such R&D activities.

There is an urgency to develop R&D as Singapore's manufacturing sector seeks desperately to move away from commoditised products, where low-cost production centres hold the advantage. "Nobody is doing this for fun or as a hobby," says Lim.

ETPL boasts a team of highly qualified professionals. They include 15 with PhDs and 38 with master's degrees, and they bring with them an average of 12 years' industry experience. Thus, the ETPL team can play several functions, including helping A*Star researchers survey the industry landscape and scout potential revenue opportunities, guide them through the process of patent filings and matchmake companies that might need A*Star's technologies and are willing to pay for access.

The way Lim sees it, ETPL also has a bigger mission beyond identifying and nurturing the next Google or Facebook, however tempting that might be. "We are very mission-focused, not just sprouting new technologies, new companies, but to also shape the ecosystem."

Before Lim took up his role as CEO in December 2009, he was general manager of the food distribution division at Singapore Food Industries, which is now a subsidiary of SATS Ltd — the rebranded former ground handling and catering subsidiary of flag carrier Singapore Airlines. For two decades, Lim was a career soldier with the Singapore Armed Forces. His last appointment, as a brigadier general, was as head of joint logistics. Besides his mechanical engineering degree from the National University of Singapore, he also holds an MBA from NUS Business School, where he was awarded the Chua Joon Eng Gold Medal, as well as a master of science from the UK's Cranfield Institute of Technology.

Right up there

ETPL is also benchmarking itself against similar institutions in other parts of the world. Last year, for every S$1 billion in R&D spending, A*Star produced 252 patents, nurtured 13 start-ups and earned licensing revenue of S$2.8 million. In comparison, the Massachusetts Institute of Technology filed 382 patents, gestated 12.1 start-ups, and generated licensing revenue of S$49 million in the same year. ISIS Innovation Ltd, part of Oxford University, registered 81 patents, spun off five start-ups and earned licensing revenue of S$17 million. "We are right up there. I think we are in the same ballpark as all of them," says Lim.

He stresses that ETPL's priority is not to drive licensing revenue and maximise profit. "The numbers are nice, but quality and sustainability are important aspects as well." Furthermore, the organisation does not want to hawk its technologies too cheaply. "It is the impact and returns on the economy that we want," he says.

To be sure, most of the licences are acquired by relatively smaller companies trying to build a bigger business. Lim says, "The MNC's don't need ETPL. They can collaborate directly with the various A*Star research institutes — that's fine." So far, about 200 research collaboration agreements have been inked.

For example, in April last year, Applied Materials Inc, a US company that makes capital equipment for the semiconductor and solar energy industries, partnered the Institute of Microelectronics (IME) to set up a centre to develop better packaging capabilities for the production of semiconductors. Most recently, Dr Bing Lim of the Genome Institute of Singapore (GIS) was given a S$350,000 grant by pharmaceuticals giant GlaxoSmithKline to further his on-going research on lung cancer. Besides IME and GIS, there are 19 research institutes under A*Star.

Some 50 start-ups have been spun off with the shepherding of ETPL and more than 40 are still operating. Obviously, not all start-ups survive, much less grow. According to the US Bureau of Labor Statistics, nearly six in 10 businesses — including technology-based start-ups similar to those that A*Star is nurturing — will shut down before their fifth year.

Lim notes that in markets such as the US, the procedure tends to be to quickly get start-ups off the ground and do the worrying later. "You don't want to be a factory for new companies if they are not sustainable." He believes A*Star researchers who have founded start-ups are more mature and more business-savvy. "They've done their calculations before stepping out of the labs. Most of the time, they are right," he says.

Clusters

Interestingly, despite all the attention given to grooming the local biomedical industry for more than a decade — a high-profile task undertaken by A*Star — ETPL sold no pharmaceutical licences from 2009 to 2011. Lim explains that the nature of the pharmaceutical industry, with its years of vigorous testing in the lab followed by the clinical stage, means it takes a while before a viable product can be licensed. "We don't want to be selling snake oil," he says.

By contrast, the engineering sector accounted for nearly two out of every five licences sold between 2009 and 2011. In the same period, the infocommunications and media segment saw the second-largest number of licences sold with 27% of the total, followed by medical technology with 23%. Lim attributes this to the much larger and deeper base of capabilities that Singapore has in these fields. The duration it takes for a product to move from research to marketing varies greatly from industry to industry. For example, if an app cannot be sold after six months, its developer should start getting worried, he notes.

ETPL has identified five areas — or "innovation clusters" — to which it wants to channel more resources. The first is printed electronics, which broadly refers to printing methods used to create electrical devices on various substrates. ETPL wants to set up a printed electronics centre to better develop capabilities for the parties involved and, from there, help identify the "killer app" that can drive material, device and process development.

Next, ETPL wants to look into the field of business analytics, which refers to how software is used to make better sense of the vast amounts of data, and is seen as a key driver in the infocommunications and technology industry. Specifically, ETPL wants to help make local providers of business analytics software more competitive via the transfer of such technologies developed by the Institute for Infocomm Research (I2R), the A*Star research institute in this field, and other research bodies.

The third area of focus is diagnostics in medical science. ETPL wants MNCs and both foreign and local small and medium-sized enterprises to view what A*Star can offer as a one-stop shop for diagnostics development, pre-clinical validation and clinical trials.

The fourth innovation cluster is bio-imaging, which is the use of computational techniques to analyse cells and molecules. ETPL plans to group together the bio-imaging technologies and software that are being developed in A*Star research institutes to bring these capabilities closer to commercialisation.

Finally, ETPL wants more done on antimicrobials, antibiotic and antifungal technologies. This move is timely, as antibiotic-resistant micro-organisms are becoming more prevalent. The target markets are fast-moving consumer goods and therapeutic products.

The ultimate goal of all the investment and effort is to generate more value for the economy. There are already enough local companies profiting from other business activities such as the buying and selling of properties, and it is time for more value to be created via innovation and technology, says Lim. "Singapore does not depend on start-ups to provide employment, but they provide a new source of energy for our economy in areas of technology and entrepreneurship, especially for our next generation."

This story first appeared in

The Edge Singapore weekly edition of Dec 10-16, 2012.

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