Singapore: Seeking a Bridge Between

Staying great is never easy
Although Singapore’s robotics research community is world class and its laboratories consistently output ingenious robotics and allied high-tech complements to robotics, the pace of technology transfer from lab to the commercial marketplace is far from strong.

To leverage robotics as a revenue generator on the global stage and to position Singapore as a core developer of robotics technology, much more will need to be done…and done quickly.

The good news is that there’s a worldwide robotics revolution going on, especially in Asia.

Shipments of Industrial Robots Through 2018

With global sales of industrial robots hitting $10.7 billion in 2014, reports theInternational Federation of Robotics (IFR); and with the Boston Consulting Group projecting sales to skyrocket to $67 billion by 2025—Asia being by far the largest buyer—Singapore has an unprecedented opportunity to supply robotics technology into this nine-year window, if it has the machines, parts and expertise to export into Asia.

To do so would mean new manufacturing jobs designing and building robots, a huge new revenue source for the country, as well as the global prestige that comes with being a provider of essential industrial technology.

Can and will Singapore get in on this multi-billion dollar boom?

Maybe.

All the elements for success are resident in abundance, but there seems to be a lack of decision making as to which robotics technology to prioritize and how to accelerate those prioritized technologies into products and then into marketplace successes.

Part of that potential success already exists in the startup community where some very significant robotics engineering is taking place.  That nascent force needs to be recognized and thoroughly nurtured as well.

The clock is ticking, and Singapore is too small and too vulnerable to afford to make many mistakes or missteps.

A master plan is needed that is simple, straightforward and results oriented. Singapore is renowned for putting such plans together and making them work; one such simple plan is the famous 5-point plan from the 1960s that made Singapore what it is today.

Making robotics work for Singapore has a lot to do with getting back to the basics that made it great.

 A backstory of vigilance
Slightly larger than Chicago (278 sq. mi.) with over twice the population  (5.5 million), the city state Republic of Singapore has always had to live on the sharp edge of economic uncertainty. 

It has no agriculture to speak of beyond supplying a few vegetables and eggs to the city; manufacturing accounts for 5 percent of GDP and employs slightly over 400k people. It imports roughly 90 percent of its food.

Walk 26 miles one way or 14 miles in the opposite direction and that’s it for Singapore’s land mass; and while walking in any direction one would pass over 18 thousand people crammed into every square mile.

Even its water supply is precarious. Water comes from what Singapore calls the Four National Taps: catchment water from rain and storms, desalinated seawater, imports from Johor, Malaysia, and NEWater, which is treated wastewater.

Such a place can make life expensive, and it is. Gasoline at the pump is over $6 per gallon; a 100oz box of laundry detergent is $8; a pair of Nike running shoes is $93; and beer at a local bar is $8. Expenses like that look mighty steep where the average factory worker makes $4900 per month or $1200 per week, which for most any other place in the world would be nice pay to take home to the family.

On the flip side, Forbes commends the city-state’s economic status: “unemployment is very low (2 percent). It has no debt. The economy (GDP $300B) depends heavily on exports, particularly of consumer electronics, information technology products, medical and optical devices, and pharmaceuticals.” Its container shipping business is one of the largest in the world, and its financial sector is in the top five on the planet.

Ngiam Tong Dow, who served in the Singapore Administrative Service for more than 40 years and was former chair of the Economic Development Board, remembers well the grim old days of 1960:

“At the time Singapore’s economy was stagnant and its infrastructure crumbling. It was a city of 3 million people, with over 14 percent unemployed and many living in overcrowded and dangerous housing. Under these circumstances, it was imperative to create jobs fast and then build homes for the people.”

Singapore climbed out of those dark times in large measure to an ingeniously crafted 5-point recovery plan formulated by Dutch businessman and UN advisor to Singapore, Albert Winsemius, and superbly and consistently implemented by the first Prime Minister of Singapore, Lee Kwan Yew, and his young government.

Winsemius recalled later that world opinion was: “Singapore is going down the drain; it is a poor little market in a dark corner of Asia.”

His 5-point plan, which he personally tabbed as “Expectations and Reality” revolved around core basics: factory jobs; housing; key anchor investments from Philips, Esso and Shell; build a financial hub; and build a container traffic hub.

Four decades later, voila, modern Singapore.

Almost six decades later, it now has problems, the end result of which no one wants to see become a repeat of Mr. Dow’s 1960.

Singapore went from a Third World country to a First World country in forty years, but today, with nearly two decades of comfortable living behind it, the economy is in sharp decline.

The island needs to help itself…fast!
According to Channel NewsAsia: “For the full year [2015], manufacturing fell by 5.2 percent, the first annual decline since 2009, when industrial output fell by 4.2 percent. It is also the steepest decline since 2001.”

Ng Weiwen, economist for ANZ Research, said “The steep and continued contraction in the manufacturing sector underscores our view of the ongoing trade recession.”

From the government’s side, it’s paying close attention to the uncertain economic situation, with official estimates predicting growth in 2016 to range from 1 to 3 percent.  Prime Minister Lee Hsien Loong said that the government does not expect a downturn as severe as the 2008 global financial crisis.

But a downturn nonetheless. Words like downturn, recession, and decline are not healthy for a teeny country that has basically lived by its wits and hard work since its early days in the 1960s.

Minister for Trade and Industry S. Iswaran reasons that Singapore must “shift from simply adding value to creating value” in order to build a future of economic potential.  Iswaran also serves as the chair of the CFEs subcommittee for Future Growth Industries and Markets, a perfect vantage point from which to scout the horizon for technology that could generate potentially new revenue streams.

Enter robotics
Robotics presents a perfect scenario for “value creation”.

Such a robotics-centric scenario does not, however, include the integration of robots from manufacturers from Japan, Germany or Denmark into large-scale or SME manufacturing and logistics. As helpful as such deployments can be, they are being implemented in Singapore to increase automation to improve productivity and, as such, are really adding value and not creating it.

Value creation in robotics would entail the island nation developing and building its own robots as end products that could then be exported worldwide, especially to East Asia and other members of the ASEAN Economic Community.

Competing with established manufacturers like ABB, KUKA, Fanuc, Yaskawa, etc.—the big boys of robotics—would seem to be too far a reach; even a relative newcomer like Universal Robots and its revolutionary collaborative robot is, at this stage, way out of Singapore’s league.

Singapore needs to survey the automation landscape for niche robotics industries that it can enter and have a reasonable to a very good chance of winning, even better if those niches presented themselves as very much needed in Asia.

Three such robotics niches are very much evident in Asia and are glaringly under represented or not represented at all:

1. Autonomous mobile robots for manufacturing and logistics for which Singapore already has a nascent indigenous industry that is building remarkable machines. Particularly warehouse robots, which are virtually nowhere in evidence in Asia, except for the newcomer from India, Grey Orange(just opened an office in Singapore).

Market forecast: WinterGreen Research projects the logistics robot market to grow to $31 billion by 2020.

2. 3D printing for both mass production and Cloud manufacturing as well as the 3D printing of specialty parts for both healthcare and aviation. The ease of entry into 3D printing is remarkably low, especially so now that most of the key patents have expired.

Everything from mass produced electronics components to prosthetic limbs are possible with 3D production tools.

Market forecast: 3D printing market ranges from: $7 billion by 2020, on 18 percent CAGR (Paul Coster of JP Morgan), to bull market scenarios as high as $21.3 billion by 2020, on 34 percent CAGR (Ben Uglow of Morgan Stanley).