Tech licensing more beneficial to S'pore startup scene

Tech licensing more beneficial to S'pore startup scene

Summary: Singapore tech transfer arm ETPL believes the widespread licensing of technology to small and midsize businesses will create more economic value locally than "churning out" startups as favored by markets such as United States.

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SINGAPORE--Exploit Technologies (ETPL) will focus on licensing technology developed by its parent organization, the Agency for Science, Technology and Research (A*Star), to small and midsize businesses (SMBs), instead of rapidly producing startups, as this will provide longer-term benefits to the overall local startup ecosystem.

start-ups

During a media briefing Wednesday, ETPL CEO Philip Lim noted that in other countries, particularly the United States, their tech transfer arms tend to concentrate on "churning out" startups with hopes of uncovering the next Google success story. The impetus to create startups in these markets is because of studies which found that new businesses and startups were greater sources of domestic job creation, he added.

"Why? Because the bigger companies tend to go overseas and create new jobs as it is cheaper [among other reasons]," Lim explained.

By contrast, the executive believes Singapore requires a different model in order to develop its SMB market. He noted that about 60 percent of domestic employment comes from SMBs, and ETPL's aim is to ensure these companies stay "relevant and vibrant" by using some of the latest IT innovations produced by A*Star.

As such, the licensing model ETPL favors enable it to bring the technologies to a wider spectrum of local businesses which might not have the R&D capability to turn early-stage ideas into marketable products. The multiplier effect this creates as companies expand on the use of the technology and create value from it will bring more economic value than simply encouraging the mushrooming of startups, he explained.

Since its inception in January 2002, ETPL has granted more than 400 licenses and 70 percent of these went to local SMBs. The 400 licenses are expected to generate more than S$500 million (US$409 million) to date in realized imputed commercial value (RICV), Lim noted.

RICV refers to the estimated commercial value created from the licensing of the technology, and this can include value created from the production, marketing and other business activities involved in selling the technology.

"Our strategy for economic growth is different. U.S. is a big economy and has its own issues and constraints. In Singapore, we see that we need to be a little more balanced," the executive added.

Mature entrepreneurs, strong startups
This does not mean ETPL does not support the creation of startups though. Lim noted about 50 startups have emerged from A*Star as a result of researchers and scientists venturing out to start their own businesses, and some 40 of them are still active as of 2012.

He attributed the "unusually high survival rate" due to the relative maturity of the entrepreneurs.

"The types of researchers we deal with at A*Star are a lot more mature. They are more risk-savvy and do their calculations before they [venture] out. Most of the time, they are right," the executive pointed out.

Topics: Start-Ups, Singapore, Tech Industry, SMBs

Liau Yun Qing

About Liau Yun Qing

The only journalist in the team without a Western name, Yun Qing hails from the mountainy Malaysian state, Sabah. She currently covers the hardware and networking beats, as well as everything else that falls into her lap, at ZDNet Asia. Her RSS feed includes tech news sites and most of the Cheezburger network. She is also a cheapskate masquerading as a group-buying addict.

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