Home » Blog » Singapore ranks as the seventh Most Innovative Economy in the world
According to the latest Global Innovation Index released by Insead and the Confederation of Indian Industry, Singapore is the seventh most innovative economy in the world – ahead of economies such as Japan and USA that have been traditionally associated with innovation. Singapore’s high ranking in the Index has been attributed to its high degree of market and business sophistication; corrupt free environment; strength of its public sector institutions; and free-market economy.
In the aftermath of the financial crisis, most progressive economies have recognized the need and importance of economic restructuring for sustained economic growth. As a result, there is an increased emphasis on business innovation and higher standards of productivity. Countries such as Singapore, Hong Kong and India, in their 2010 Budget proposals, have announced tax breaks to encourage business organizations to increase their investment in R&D and strengthen their co-operation with R&D institutions.
For instance, Hong Kong companies will be entitled to a cash rebate for R&D activities and tax deductions for capital expenditure incurred in relation to purchase of IP rights. India on the other hand has raised the limit on tax deductions for expenditure incurred on research and development. However, the 2010 Singapore Budget’s key measures provides the most significant tax benefits to businesses, especially SMEs that invest in skills and innovation. Companies that spur innovation will benefit from substantial grants and the “Productivity and Innovation Credit Scheme”. The 2010 Singapore Budget’s tax incentives along with industry specific tax incentives adds to Singapore’s appeal as a center for business and innovation.
By nurturing its R&D ecosystem and developing a robust IP regime Singapore is well on its way to becoming the next hotbed for innovation. Moreover, Singapore’s position as the least corrupt jurisdiction in a recent business survey by the Political and Economic Risk Consultancy (PERC) further enhances its attractiveness. MNCs and startups that focus on R&D and innovation stand to gain significant tax benefits by setting up and expanding their business operations in Singapore – a recent case in point being Hewlett Packard’s new advanced research facility in Singapore.
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