Improving Usage of Productivity and Innovation Credit14 Apr 2014
Date: 14 April 2014
Parliamentary Question by Mr Yee Jenn Jong:
To ask the Deputy Prime Minister and Minister for Finance:
(a) Whether the Ministry is satisfied with the distribution of the Productivity and Innovation Credit (PIC) claims between the six different qualifying activities; and
(b) What measures does the Government have to increase the usage of PIC by companies in activities more directly related to innovation.
Reply by DPM and Finance Minister Tharman Shanmugaratnam:
The Productivity and Innovation Credit (PIC) was set up as a broad-based scheme to support a wide range of activities that can help businesses, and SMEs in particular, improve their productivity and foster innovation.
The Government does not have a preferred distribution of the PIC claims. Instead we monitor the claims and feedback from businesses, and make adjustments to enhance support where necessary. For example, in response to feedback that SMEs tend to license IP rights rather than acquire the IP for innovation, we allowed costs incurred to in-license IPRs to qualify for PIC benefits. The information on claims from Year of Assessment 2013 onwards will help to ascertain how many firms benefit from the liberalization of the scheme.
Besides PIC, there are other schemes that support innovation by businesses. In particular, SMEs can tap SPRING Singapore’s grant schemes such as the Innovation & Capability Voucher (ICV) to get help from consultants to upgrade their capabilities. The Capability Development Grant (CDG) provides additional financial support for innovation projects.
The Centres of Innovation, set up by SPRING Singapore in partnership with selected polytechnics and research institutes, provide laboratory facilities, technology consultancy and training courses, and assistance for SMEs to test and develop new technology projects.
SMEs can also leverage on the technical assistance and expert secondment from A*STAR Research Institutes to upgrade their in-house R&D or technical capabilities to develop new products or processes.
For design projects, DesignSingapore Council provides grant support for businesses working with consultants to build innovative design solutions and develop design capabilities.