IDA keeps close relations with industry

Singapore's special relationship with industry was on full display June 17 when it announced its latest advanced technology initiative. Hoping to jumpstart a nationwide grid computing industry, it lined up vendors to supply the infrastructure by promising them it will become a major customer. Government agencies will consume as much as 40 percent of vendors' capacity for services such as data storage, software as a service and even network computing services.

Singapore's Infocomm Development Authority's philosophy, which includes making direct subsidies to information and communications technology companies, is to assume some of the risk for projects that require huge capital expenditures, said Hock Yun Khoong, IDA assistance chief executive for infrastructure development.

'It's a chicken-egg problem. When we see a chicken-egg, the government looks at what it can do to facilitate,' he added.

IDA isn't trying to create markets that local demand won't support, said Ramakrishna Purushotaman, IDA director of industry development. The government typically provides 10 percent to 30 percent of a development project's start-up funds, he said. The market test is whether vendors provide the remaining funds.

'Unfortunately, we don't have a very vibrant business angel [venture capital] community here,' and that leaves a vacuum for government to fill, he added.

'We want these companies to be successful, because when they are successful, there are economic benefits' We have learned to realize in Singapore that the only way to create jobs is to create a value proposition,' Purushotaman said.

About the Author

David Perera is a special contributor to Defense Systems.

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