How Innovative is Singapore in High Technology Industry Cluster? An Empirical Study of Annual Reports of High Technology Firms

Abstract

As a small country lacking of natural resources, Singapore has been developing innovation-based industry, which is highly associated with high technology. High technology sector has become an important pillar of today's Singapore economy. This paper is to evaluate how innovative Singapore is. The evaluation is conducted through empirical study of Singapore technology firms' annual reports, discussion of Singapore national innovation policy and the world recognition of Singapore's economic performance. The companies selected are within the high technology cluster to which the Singapore National Innovation System (NIS) is applied. Many literatures show that innovativeness involves 2 aspects: 1) Hard aspects - research and development (R&D) expenditure, intellectual capital, new product development, and market development; and 2) Soft aspects - senior management attitudes towards innovation" - entrepreneurship, employees' involvement and collaboration. The analytical study of this paper measures the innovating activities of ten Singapore companies in a given year and compares the results with that of ten companies of The United States of America (USA). As USA is ranked as one of the top innovative countries, comparing innovating results with USA will generate a worldwide standing for Singapore. The analytical study is conducted based on Wong (2003) survey that concludes innovation activity is positively related to sales volume, sales growth and internationalization. This paper reveals that despite Singapore still has a long way to go in R&D activities and innovation behavior, it has achieved a remarkable performance in innovation development, and is making progress towards achieving higher innovation capability. The deficiency in innovation behavior is due to its adverse societal attitude to "failure". Suggestions are given to promote innovation behavior in this paper