Thank you for your consolation

[Thriftville]

Agreed that using property as a income stream is a misallocation of resources. It will not boost the competitiveness of local SME.

[KopiKat]

I was actually driving at the same point as you did- globally, electronics isn't a sunset industry but I suspect in our local context it is or at least, certain segments like the manufacturing/assembling. I can imagine that there's a whole flow from designing to production of a electronic product but I'm not sure which part of the process Singapore-based companies would have a competitive advantage in.

Would be great if you could share your thoughts on this.

This is a good question. Unfortunately, I don't know where Singapore companies can have a competitive advantage in Electronics because whatever we can do, others can do as well. To make matters worse, Singapore did not do a good job at controlling its land costs. Besides the rental cost, this also adds to the labor cost because when workers pay a bomb for a roof over their heads, they have to demand higher salaries. Otherwise, how to repay the 30-year mortgage which can be about a decade's worth of their salaries? The interest payments become necessary, unavoidable expenses and this sets a minimum for local wages. The government should do their part at controlling the cost of living and the cost of doing business besides telling the people to tighten their belts and become cheaper, better, faster. Some improvement in terms of listening to the people has been made by the government after the election.

Meanwhile, a vicious cycle has begun. When big MNCs are moving out and smaller ones are dying, the surviving companies suffer a disadvantage because of the poorer support they get locally. When there is a strong cluster of electronics firms around, Singaporean electronics companies get better support in terms of R&D, procurement, logistics. This support is waning and with the survivors already struggling now, it is getting even harder for our electronics companies to compete globally. Chances are that more will die later. My own analysis tells me that this trend is not cyclical. Differing opinions will be most welcome.

Sorry, I do not have a good answer to your question. Perhaps a more enlightened forummer can help.

For the Electronics Industry, one of the earlier stength of local companies was in CEM (Contract Electronics Manufacturing) and Precision Engineering. Many of the local listed cos. were subsequently acquired by the giants in the industry. I think amongst the bigger local CEMs, only Venture is left. But, with the ever tightening margins, I think the Venture owners must be kicking themselves for not having gotten out during the cycle's peaks.

The govt. here through NSTB, EDB and also Temasek had tried their hands at various times to grow/upgrade the Electronics Industries. Unfortunately, these establishments do not appear to have the right experienced technocrats in charge and we witness the many failures eg. Temasek investing in Micropolis (write-off of >$1Bil within a couple of years), CSM (in the red for most of it's life but now gladly sold off),... EDB + NSTB also provides lots of funding and tax incentives to MNCs to relocate their R&Ds here. But, unwittingly (or too trusting of the MNCs), they'd been funding many end-of-life products disguised as R&D transfers eg. Toshiba transferring their whole VCR operations (R&D + Manufacturing) to Singapore when everyone knew that it was going EOL (End-of-Life) and being replaced by DVD Players back then, HP transferring their Pocket PC R&D here, Thomson and Philips transferring CRT CTV R&D here when the whole world was switching to PDP/LCD TVs,... etc. These MNCs, be it US, European or Japanese are most unlikely going to transfer any real R&D (whatever is transferred here are matured products and local Engineers only do simple modifications to launch new models till they EOL) and break their own rice bowls (their Engineer Unions are quite powerful to prevent any transfers).

Local companies on the other hand finds it hard to get the EDB/NSTB fundings. Many gave up and either relocate or die a natural death. Many local R&D Engineers either relocate to more pro-R&D countries like USA Silicon Valley or gave up and switch to Sales & Mktg (better pay and prospects) or other lines.

IMO, if the govt really wants to support the Electronics Industry, they have to move up the food chain to higher value added stuff like R&D (I believe they correctly identified this but so far, had not been very successful in their execution for the past decades). They could follow the Taiwan model. Their govt funds a huge R&D centre (ITRI ERSO) which does real cutting edge R&Ds. Their private sectors are able to tap on the IPs of ITRI ERSO and that's why you see many successful start-ups in Taiwan and of these, some managed to grow to world beaters.

The above are what I'd gathered 15-20 years back but I don't think the landscape had changed that much.

[violinist]

..............

The govt. here through NSTB, EDB and also Temasek had tried their hands at various times to grow/upgrade the Electronics Industries. Unfortunately, these establishments do not appear to have the right experienced technocrats in charge and we witness the many failures eg. Temasek investing in Micropolis (write-off of >$1Bil within a couple of years), CSM (in the red for most of it's life but now gladly sold off),... EDB + NSTB also provides lots of funding and tax incentives to MNCs to relocate their R&Ds here. But, unwittingly (or too trusting of the MNCs), they'd been funding many end-of-life products disguised as R&D transfers eg. Toshiba transferring their whole VCR operations (R&D + Manufacturing) to Singapore when everyone knew that it was going EOL (End-of-Life) and being replaced by DVD Players back then, HP transferring their Pocket PC R&D here, Thomson and Philips transferring CRT CTV R&D here when the whole world was switching to PDP/LCD TVs,... etc. These MNCs, be it US, European or Japanese are most unlikely going to transfer any real R&D (whatever is transferred here are matured products and local Engineers only do simple modifications to launch new models till they EOL) and break their own rice bowls (their Engineer Unions are quite powerful to prevent any transfers).

Local companies on the other hand finds it hard to get the EDB/NSTB fundings. Many gave up and either relocate or die a natural death. Many local R&D Engineers either relocate to more pro-R&D countries like USA Silicon Valley or gave up and switch to Sales & Mktg (better pay and prospects) or other lines.

IMO, if the govt really wants to support the Electronics Industry, they have to move up the food chain to higher value added stuff like R&D (I believe they correctly identified this but so far, had not been very successful in their execution for the past decades). They could follow the Taiwan model. Their govt funds a huge R&D centre (ITRI ERSO) which does real cutting edge R&Ds. Their private sectors are able to tap on the IPs of ITRI ERSO and that's why you see many successful start-ups in Taiwan and of these, some managed to grow to world beaters.

The above are what I'd gathered 15-20 years back but I don't think the landscape had changed that much.

That's what they are trying to do with A-Star, which was formed from combining all the research institutes together under one arm (used to be called NSTB). The 2 councils under A-Star - SERC (Science and Engineering Research Council) and BMRC (BioMedical Research Council) separates engineering (electronics/mechanical/chemical) from biomedical fields. So far how successful are they? I'll leave you all to judge.

One thing R&D needs is a lot of freedom to decide what to do, how to do it. The US has that kind of environment, due largely to it's similar concept of freedom in it's political landscape. Singapore, on the other hand, has a big brother constantly looking over your shoulder. Making sure you cannot do this, cannot do that, etc. So how to be innovative when everyone is asking what is the directive from on top?

[VIChris]

One thing R&D needs is a lot of freedom to decide what to do, how to do it. The US has that kind of environment, due largely to it's similar concept of freedom in it's political landscape. Singapore, on the other hand, has a big brother constantly looking over your shoulder. Making sure you cannot do this, cannot do that, etc. So how to be innovative when everyone is asking what is the directive from on top?

The main issues are:
1. For R&D, out of 10, there will be 9 that fail. Current S'pore culture does not permit failure, person-in-charge will be ACCOUNTABLE for such failure (big time).

In such a environment, who dare to take big risk and might achieve a big breakthrough in technology?

In saying so, there must be a balance between taking a calculated risk vs. money invested.

2. Due to remuneration/rewards, the brightest (most) will join the Banking and Financial sectors, who will join R&D?

Even if they join, most might leave the industry after a few years of frustration....

Just my thought.

[yeokiwi]

One thing R&D needs is a lot of freedom to decide what to do, how to do it. The US has that kind of environment, due largely to it's similar concept of freedom in it's political landscape. Singapore, on the other hand, has a big brother constantly looking over your shoulder. Making sure you cannot do this, cannot do that, etc. So how to be innovative when everyone is asking what is the directive from on top?

For US, both the private funding and DARPA funding provide the funds for R&D. In general, they are less concern with the final outcome of the fund being used. The list of DARPA projects contains many ridiculous or insane ideas.
Even those challenges that are issued by DARPA, you probably will not see it here(nor anywhere except US)
http://www.darpa.mil/NewsEvents/Releases.aspx

Anyway, Singapore is only interested in applied research. If the research topic does not have any economic or social impact, it probably will not be funded.

[violinist]

DARPA's funding created the ARPANET (http://en.wikipedia.org/wiki/ARPANET), which became, as we know it today, the Internet. Together with that many US companies benefited and probably grew bigger due to military fundings - companies like Intel, HP, etc. Of course, everybody wants something useful, something that will grow to become a Block Buster, like Ipad, Google, Facebook etc. But how is it that all these innovations are coming from the US? They take immigrants, we take immigrants as well. It must be the system, something's missing in the system.

Singapore does fundamental research. NUS, NTU and many A-Star institutes are doing blue sky research. The kind of projects that generates no usable products and zero revenues. Some call it "core projects". The justification is without these research (and published papers), we cannot claim knowledge and IP whatever to progress at the same level as developed countries like US/Europe/Japan does.

[VIChris]

Singapore does fundamental research. NUS, NTU and many A-Star institutes are doing blue sky research. The kind of projects that generates no usable products and zero revenues. Some call it "core projects". The justification is without these research (and published papers), we cannot claim knowledge and IP whatever to progress at the same level as developed countries like US/Europe/Japan does.

US used to attract the world best and brightest to join their countries, but S'pore? The best from China will not hesitate to use S'pore as the spring board to these developed countries where they know that the quality of living is much better than there.

I've in the past, worked (in S'pore) with many from Beijing University, Ching Da University and etc (top China Universities)and almost all have left for US and Canada within a few years.

And those from India (good one) moved to British (few years ago).

[yeokiwi]

I think it is more than the quality of life. The quality of work can be much better in US than here.
The leading edge technologies are developed and researched in US.

The exciting projects for scientists and engineers are only available in US.

I mean.. how cool it is to be part of the team that built the latest Mars Rover that is on its way to Mars
http://mars.jpl.nasa.gov/msl/
Or participate in the latest DARPA challenge to build UAV?
http://www.smartplanet.com/blog/thinking...a-uav/7326
Or just join any tech companies in US that are more than likely to offer u better job scope than local jobs.

Well, money is kind of like not much of a big deal when you are part of this exciting team.

[kazukirai]

Hi Buddies,

Really interesting discussion. Thanks KopiKat for giving a really nice background to frame the context. I have absolutely no industry knowledge so I'm coming from a layman's perspective.

It appears to me that in the current electronics engineering environment, it's going to be tough for Singapore to find a niche to fill.

The mass market consumer electronics seems to be filled by: in the PC/Notebooks by the US (i'm thinking Apple, Google, IBM etc.) and NorthEast Asia (HTC, Samsung, Asus, Sony, Fujitsu and the likes). Intel, AMD, Taiwanese semicon manufacturers, Global foundries supply the engines and Foxconn and other contract manufacturers based in China do the assembling.

The smartphone market seems to be following a similar line which isn't surprising since Smartphones are really blurring the line between PCs and Phones.

TVs, DVD players and other household appliances seem to be dominated by the Japanese and Koreans internationally. Chinese lesser brands have their own huge domestic market and the really really premium end seem to be taken up by the Germans (for appliances at least).

Therefore it seems to me that electronics engineering in SG is a bad place to be in. SG companies in the sector would do better by moving where the clients they service are. Either that or they have to be in the part of the industry that services industries physically located in SG.

So the question is, rather than compete with giants in the PC/Notebook/Home appliance/IT services/Semicon manufacturing and R&D, is there a niche in the Electronics Engineering industry for our Engineers to fill? Or is it, given the current environment, more sensible to think of other engineering fields like Environmental, Biomedical etc.?

[wsreader]

Macro forces may be too big to counter. On a individual level, one defence against the vagaries of the electronic industry may be to have a spouse who work in another industry. For those who meet their spouse in the same company, one of them may have to resign and join another industry. Family income would not be too adversely impact in the event of the big R.