Singapore's special focus on pharmaceutical companies and medical device makers in recent years has diversified its economy amid competition from lower-cost economies like China and Vietnam to great success.
Companies with manufacturing operations in the city-state, which include GlaxoSmithKline and Merck, have helped Singapore achieve a 40 per cent growth in the biomedical sector in 2004.
At a press conference chaired by the Minister for Trade and Industry, Mr Lim Hng Kiang, The Ministry of Trade & Industry (MTI) will commit S$7.5bn over the next five years to sustain innovation-driven growth through economic-oriented Research & Development (R&D).
Of the S$7.5bn, S$5.4bn would go towards promoting economically relevant public sector R&D by A*STAR.
Another S$2.1bn would go towards promoting private sector R&D investments by EDB.
MTI's R&D plans for the next five years are set out in the Science & Technology Plan 2010 (STP2010), which forms part of Singapore Government's overall strategy to make significant investments in R&D in the next five years, so as to increase national spending in R&D to 3 per cent of GDP by 2010.
Of particular interest under STP2010, the promotion of private sector R&D is paramount in Singapore's future plans. Companies are best positioned to align research investments with commercial opportunities.
"The Economic Development Board (EDB) aims to anchor more flagship R&D projects and attract more multinational companies to locate corporate R&D activities in Singapore. This would also create more jobs in R&D in Singapore," the plan states.
Six of the world's top drug makers operate in Singapore, along with hundreds of smaller biotech firms specialising in everything from stem cell research to studies of flu viruses.
Progress in Singapore's homegrown pharma companies has also not gone unnoticed. A-Bio Pharma (Singapore) commenced its first major partnership with leading vaccines company GlaxoSmithKline Biologicals (Belgium) to develop and manufacture new generation vaccines.
S*Bio (Singapore) has developed a highly competitive oncology program focused on the development of histone deacetylase (HDAC) inhibitors and is on track to deliver its first clinical development candidate in 2006.
However, the encouraging predictions of Singapore's growth have been blighted by some forecasts, which predicted that these rates of growth could not possibly be sustained.
Philip Yeo, chairman of the Agency for Science, Technology and Research, which is tasked with promoting the biomedical industry, was quoted a saying that drug makers worldwide would face strong competitive pressure in the future.
When asked by reporters for a forecast for Singpore's biomedical output for 2005, Yeo replied: "It will be flat. You can't keep growing at 30 per cent or something every year."
Yeo, however, emphasised Singapore's long-term target of increasing biomedical output, compromising pharmaceuticals and medical devices, to S$25bn dollars by 2015 from S$15.8bn dollars in 2004.
The STP2010 is available on-line at MTI's website.