The Makara Innovation Fund fund appears to be a strategy to import companies to make Singapore a global IP hub

Singapore will be a regional and (it hopes) global innovation leader for the decades to come — the city-state simply has too much internal drive and too much cash for it to fail. But, along this journey, there will be a constant push-pull between an age-old force.

Should the city import foreign companies that have advanced technologies? Or should the government cultivate a grassroots approach and build an economy in which cutting edge technology is being created by Singaporean startups?

Fortunately, Singapore probably has the resources to do both — but the case of the Makara Innovation Fund (MIF) announced yesterday is clearly the former.

Part of the reason this is true is because of where the fund will be focussed. The Managing Director of MIF, Ali Ijaz Ahmad, told the Business Times the fund will focus on fintech, urban logistics, alternative energy, AI, cybersecurity, healthcare and biomedicine.

It is difficult to point to true-blue Singaporean technology company in these fields that has a strong IP advantage over an American or Chinese counterpart.

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This means, if the city wants to compete with these two countries on IP, it needs to import leading technology companies to kickstart the industry.

The press release said that the Intellectual Property Office of Singapore (IPOS) wants IP leaders to make Singapore a base and that it will be fairly geographically agnostic in terms of finding proper companies in which to invest. The statement read,

“These companies will then tap on Singapore’s IP ecosystem to help them deepen their value creation, compete effectively and expand into the global markets.”

An optimist would argue that kickstarting the ecosystem with foreign leaders will then fertilise an economy in which the next IP leader is born and bread in Singapore. Said optimist could point directly at the “block 71” startups as an example. A pessimist would point out that there may be a young local company working right now, and bringing in a foreign firm would kill their ability to compete.

Call me an optimist.

For example, (and to be clear, it is unrelated to this fund) one experience to help understand how Singapore can import IP is the self-driving vehicle company nuTonomy.

nuTonomy is based in the US city of Cambridge, Massachusetts and, for all intents and purposes, is an American company.

However, when the government decided it wanted Singapore to take charge of the self-driving vehicle race, it convinced nuTonomy to make the city its testing bed. While nuTonomy is not a Singapore company, it has suddenly made the city a global leader in autonomous vehicle development.

Now, Singapore is likely to become the world’s first society to integrate autonomous vehicles into day-to-day life. A creative Singaporean entrepreneur can leverage this fact and build supplementary products for the driverless car industry.

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While the truly cutting-edge logistics or fintech IPs are not grassroots Singaporean startups, the existence of MIF may help create them. It is a chicken-egg problem and, hopefully, MIF solves half of the problem.

Ten years ago, Singapore may have had the companies, but no funds. Today, MIF has said, ‘here is a fund, a large one, come get it’.

While the first company that raises US$40 million from MIF may have to move its HQ to Singapre from abroad, there is absolutely zero reason why the next investees can’t born in the city.

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Copyright: andreyst / 123RF Stock Photo

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