Special interview with the Chief Executive of the Intellectual Property Office of Singapore on new one billion dollar innovation fund (and more)

The IPKat recently had the privilege of submitting written questions to Mr. Daren Tang, Chief Executive of the Intellectual Property Office of Singapore (IPOS), in connection with the launch of a one-billion dollar Makara Innovation Fund (MIF), Southeast Asia’s first private equity investment fund that sources IP-driven companies internationally and capitalises on cross-border regional expansion. Set out below is the full text of this interview. 

1. Mr. Tang, I have had the pleasure of reading the IPOS media release, "One-Billion Dollar Innovation Fund Launched in Singapore to Drive Enterprise Growth for our Future Economy” How would you summarize the main points of this initiative?

The concept behind the Makara Innovation Fund arose from two challenges that we see at IPOS regarding innovation in Asia. The first is how our economies can support innovative enterprises that are seeking to grow. When start-ups and innovation-driven enterprises are scaling up, they need access to capital and markets. In Asia, there is no lack of growth funds, but they tend to be concentrated in the early and mature stages, leaving a gap in the middle. Moreover, Asian funds still tend to be focused on the more traditional investment themes like infrastructure, resources and property, rather than on innovation.

The second is how to use IP to drive economic growth and prosperity. While there has been a tremendous growth in the number of IP filings in Asia that must translate into actual economic and social impact. IPOS has broadened its focus to include IP commercialisation, and our energies will be on helping our companies to use IP to drive enterprise growth.

With these in mind, we worked with private equity firm Makara Capital to design a fund that was somewhat different. Instead of start-ups, the MIF will target 10 to 15 companies in the $30 - $150 million range. These companies need to have good IP, but equally important is a good business model and ability to execute. The MIF will provide them with smart and patient capital, and connection with the relevant networks and expertise for growth and expansion through IP. Lastly, the MIF’s focus is not just local, but also innovative foreign enterprises that have an interest in using Singapore to access Asian growth markets.

Ultimately, what IPOS hopes to see is the presence of more financing options in Singapore for innovative enterprises, and we would welcome the chance to work with other financiers who share our perspective of IP as a strategy for enterprise growth.

2. Can you specify in further detail what you mean when you speak of "Singapore's innovation system"?

At IPOS, we have a very clear view that innovation is the process of getting ideas to the market because that is where there will be economic and social impact. So when we talk about an innovation ecosystem, we are really talking about how to build the right expertise, structures, processes and stakeholders for this to happen. We have been fortunate that quite a number of these elements are already present in Singapore – a strong R&D sector, a key finance hub, top-class business and regulatory environment, and highly-ranked judicial, legal and IP regimes. Other elements, for example, our desire to double the number of IP experts, or be a design hub by 2025, are in the making. What is likely to be the bigger challenge is to adjust the alignment of these various elements towards enterprise growth through innovation and IP.

3. While Singapore can rightly be said to punch above its weight in commerce and finance, still, it is a small island state. Aren't you concerned that in taking on IP creation, protection and commercialization, you may be overextending what can reasonably be expected from an initiative of this kind?

In a world of intangible assets, small can be beautiful. Singapore is indeed just an island state, but the same factors that have allowed us to prosper by servicing global flows of capital, trade and investment will also serve us well in positioning ourselves as a centre for IP commercialisation. What are some of these? As highlighted earlier, our strong legal and judicial system, status as an R&D and finance hub, top-class IP regime, neutrality and credibility. However, you are right in pointing out that our small market size is a major constraint.

But we have also always been a gateway into South-east Asia and beyond because of our proximity to these markets. And beyond this part of the world, one of the trends we are seeing is that innovation is increasingly becoming open and global. The process of transforming ideas into assets, products and services has become distributed along established and emerging innovation centres in the world. If Singapore can be one of the nodes along a global innovation supply chain, helping ideas access capital and markets in our part of the world, coupled with the ability to quickly adapt and react to changes, then perhaps we can overcome our limitations.

4. There is a recurring debate in talking about innovation: Is the private sector or the government better placed to be the main driver. The initiative emphasizes the role of government; why do you believe that this is the preferred approach?

Actually we see this particular initiative as far more driven by the private sector than in some of the other things that we are doing, for example, in building IP expertise. This is because we believe that private equity, which is much closer to the market than us and has the expertise to grow enterprises, is in a much better place to make the appropriate investment decisions. That said, there is a role for government to play in the innovation space, and that is to introduce the right policies and build the broader ecosystem.

Building an ecosystem may mean that governments sometimes provide funding to get an industry started. A common area not just in Singapore, but around the world, is in R&D. In the case of Singapore, we are investing S$19 billion (or about 1% of our GDP) on R&D over the next five years under the Research, Innovation, and Enterprise (RIE) 2020 plan. As major contributors and recipients of public R&D funds, public agencies should take the lead to develop policies, programmes, and capabilities to boost value capture. Lastly, a lot of work in this area relies on private-public partnerships, because that is how the ideas or IP that is generated from publicly funded R&D can be translated into marketable products and services.

5. The report mentions that one your goals is to strengthen your manpower capabilities to enhance your IP expertise. To what extent do you expect that achieving the goals of the initiative will be accomplished by local skills and talent, and to what extent will you need to rely on contributions from foreigners?

IP skills and expertise is in growing demand in Asia, and requires time and experience to build up. This means that while we want to grow local skills and talent, there will always be space for foreigners to contribute to this highly specialised area. There are a number of areas where we see strong demand over the next few years, but essentially, they tend to revolve around the IP commercialisation space. The challenge here is to take someone who has expertise in a technical area, say law or technology, and help this person develop enough business acumen and sense to understand IP not just from a technical or legal angle, but from a strategic business angle. Good IP managers or consultants who can do this will find themselves with many opportunities to do interesting work in Asia.

Other growth areas will be in the productisation space – people who are expert in translating intangible assets into products. These would be the technology transfer managers and IP brokers. Lastly, we see an opportunity for persons who are experienced in IP financing – whether it is IP valuation, insurance or others who can help monetise IP, and understand how to play around IP as an asset class in itself.

In terms of supporting the development of local expertise, one interesting programme is the one we have launched with the Singapore University of Social Sciences to provide post-graduate training leading up to a Master of IP and Innovation Management. This course, which recently saw its first intake of 24 students, is tailored for working adults who will remain gainfully employed throughout the course, and with a curriculum that focuses on practice and skills through case studies and solving real problems, rather than just knowledge transfer. And of course, it is open to both locals and foreigners. So we do see opportunities for both locals and foreigners to bring their skills and experience into this space, and ultimately support the growing needs of the innovation ecosystem in Singapore.

6. For someone who is not from Singapore, how will he be able to take part in this initiative?

We aim to grow the number of IP professionals to 1,000 by 2020, and most of the work opportunities in this area is not subject to restrictions. That said, in the area of patent prosecutions, foreigners who want to be part of the patent bar will have to sit for and pass the required exams. The same applies for legal advisory work – there are local bar requirements, just like there are in many other countries. For accountants dabbling in IP valuation, there will likewise be the usual requirements of applying to those seeking recognition as local professionals. Beyond these, work in the other areas are not subject to government mandated professional restrictions, and the training courses offered by the local universities offer places to foreign students too.

For those who are involved in IP training in your respective home countries, IPOS is open to engaging overseas partners to co-develop and recognise IP professional certifications and programmes, co-organise Community-of-Practice (COP) sessions to share best practices and case studies, host internships and exchanges for our IP professionals, or even invite guest lecturers to instruct at the graduate programmes. We welcome firms, service providers or financiers to establish themselves here in Singapore and be part of the innovation ecosystem.

7. It so happens that we are both great lovers of tea. What do you recommend to IPKat tea aficionados on their next visit to Singapore?

Tea is so much a part of Asian culture that we sometimes take it for granted, and may not understand the richness of its history and culture. That is why I wrote a book on tea (under a pseudonym), which is unfortunately out of print, but which I am attempting to get a second re-print. Anyway, for first time visitors to Singapore, it may be interesting for a start to try tea as the locals consume it – with sweetened condensed or evaporated milk. It’s quite ubiquitous – you can find it almost everywhere but a decent version to try is the one at Toast Box (there is one at the ground floor food court where IPOS is located). You can try that with kaya toast, a local coconut jam on toasted bread.

There are also tea-shops in Chinatown which serve Chinese tea the traditional way, but you can find these in other parts of Asia as well, so for a more interesting and unique take on tea, I would strongly recommend a trip to Tea Bone Zen Mind. It is housed in a stunningly conserved Peranakan (Straits-born Chinese) shophouse at 98 Emerald Hill and draws on tea traditions from all over the world to present tea with a modern and refreshing twist. I have to say that I’m always partial to the Taiwanese oolongs like the Four Seasons, Lishan, Shan Linxi and Deer Valley, which are all really lovely, as are the oolong and fruit combinations like Apple or Lychee Oolong. If you can afford the time, they also do a 3-course tea tasting, accompanied with tidbits and snacks.

Life is short, so drink good tea.

Photo on lower right by Haneburger, released to the public domain