by Gearoid Cronin, Commissioning Agents International Inc.
While not a large market in its own right, Singapore has the highest trade to GDP ratio in the world at 407.9%, and it is the world’s 14th largest exporter with 2010 exports totalling US$351.2 billion.
Strategically located near the large population bases of South East Asia and Australasia, the last decade has seen remarkable growth in Singapore’s life science sector, with a keen focus and attention at government level in shifting from manufacturing to R&D, and from traditional pharmaceuticals to biotechnology.
Singapore has remained an attractive foreign direct investment location for a number of reasons ranging from its business friendly legal environment, excellent infrastructure, political stability and low corporate and personal tax rates. It was recently ranked by the World Economic Forum as 2nd in the world for competitiveness, with especially high marks for intellectual property protection (1st in Asia, 2nd globally) and transparency (1st in world).
In 2000 the government identified biomedical sciences as one of four pillars of its economy and employs several boards and councils through which it funds and supports public and private research initiatives and activities. These include; A*STAR, the Economic Development Board’s (EDB) Biomedical Sciences Group (BMSG) and Bio*One Capital, and the Ministry of Health’s National Medical Research Council.
Singapore’s life science manufacturing industry is mostly located in the Tuas Biomedical Park, which has been developed by the Government run JTC Corporation. Following a wave of foreign investment, multinationals from small molecule pharmaceuticals, biotechnology, medical devices and nutrition are all well represented in the park.
There are now over 50 biomedical sciences companies conducting R&D activities in drug discovery, translational and clinical research, as well as medical technology innovation in Singapore.
JTC has also developed the Biopolis Complex which hosts key public and private biomedical research institutes and organisations. Singapore’s private sector has also developed three phases of science parks that are home to more than 350 multinationals, local companies and national institutions, including 9,000 research and support staff.
However, 2011 has seen a relative lull in manufacturing investment after the period from 2008-2011 when six major projects were completed. Singapore faces modest inflationary challenges with inflation expected to be 3.5% in 2011, and it has significantly higher wages than its neighbours, but this is a challenge it has long faced.
It faces a new challenge from across the second link bridge in Malaysia where Bio-XCell is a new custom-built biotechnology park and ecosystem in Iskandar. So far this has attracted some investment and hopes to expand in the coming years to compete with Singapore for life science investment.
In view of competition from lower cost countries Singapore has wisely started to shift from a manufacturing to a knowledge based economy, quite dramatically in the life science sector, where it has invested heavily to develop world class industrial, science and research parks.
Singapore still remains an attractive investment location and its excellent infrastructure and research real estate continues to attract interest. From a life science perspective, however, the challenge for the EDB will be to convert that goodwill and recreate the environment of large capital investments in manufacturing that have recently ended.