In the latest Global Competitiveness Report, for instance, Singapore was ranked 25<sup>th</sup> in terms of firm-level innovation in 2002, way below most developed economies at a similar level of per capita GDP.<sup>10</sup> Singapore ranked highly (top 5-10 in the world) in terms of technologyusing indicators such as quality of school science and technology education, licensing of foreign technologies etc, but was rated much lower in technology-creating indicators like R&D spending, R&D personnel, availability of venture capital and intellectual property protection (10th-17th in the world). At the same time, Singapore ranks poorly in terms of entrepreneurial activities. In the 2003 Global Entrepreneurship Monitor studies, Singapore ranked 21<sup>st</sup> among the 31 countries surveyed in total entrepreneurial activity. Within the subset of 22 OECD/East Asian countries, Singapore stood at a dismal 15<sup>th</sup> .<sup>11</sup> A new strategy to develop Singapore’s comparative advantage in innovation began to emerge from 2000. The central element of the new policy is the holistic approach it assumes. In addition to applied, technological innovations in the manufacturing sector, there is now also a strong emphasis on innovation in the services sector, including the “creative industries”<sup>12</sup> and entrepreneurial activities. Moreover, policy incentives are extended not only to big firms, but also small and start-up companies. Supporting infrastructure, both physical and institutional, are being developed in this connection. There are also efforts to change the “mindset” of Singaporeans, to bring out the enterprising and adventurous spirit in them. In short, the new strategy calls for an aggressive build-up of what some economists call “innovation infrastructure” (as opposed to “efficiency infrastructure”).<sup>13</sup> The new strategy reflects the city’s ambition to redefine its “premium” over other economies in terms of innovation rather than efficiency.

10 See World Economic Forum, 2002.

> 11 See Wong, 2004a.

> 12 Broadly speaking, these are industries which have their origins in individual creativity, skill and talent and which has a potential for wealth and job creation through the generation and exploitation of intellectual property.  The innovations could come from the high-tech and biotech fields, they could also be found in more artistic fields such as music, film, book writing, etc.  What they have in common is that most of them come under the purview of IP laws, and it is the use of IP laws that helps unleash the full economic value of the innovations (see Howkins, 2001). 13   The terms are used to highlight the different natures of the two types of infrastructure.  Efficiency infrastructure refers to facilities that help improve the efficient running of the economy such as public service, transportation system, telecom system, business friendly regulation, good corporate governance, low tax rates etc.   “Innovation infrastructure” on the other hand refers to those that help make a city conducive for innovation activities.  This includes things like R&D facilities, venture capital availability, well defined IP laws, and amenities that can help to attract creative talents.  The latter include physical recreational amenities, public space, cultural districts etc, as well as “softer” infrastructure like a more open culture with high tolerance for different lifestyle choices and encouragement for diversity and non-conformist thinking.  See Yusuf, at el, 2003.

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