The deep tech void

Trinity Chua
Trinity Chua8/30/2019 07:00 AM GMT+08  • 16 min read
The deep tech void
Singapore’s high-tech ambitions are not quite matched by the depth of its local talent pool. While attracting employees from abroad, the city state must also build up its domestic workforce if it sees tech as its future.
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Singapore’s high-tech ambitions are not quite matched by the depth of its local talent pool. While attracting employees from abroad, the city state must also build up its domestic workforce if it sees tech as its future.

SINGAPORE (Sept 2): When Chin Yishuen returned to Singapore more than 10 years ago, there were not many people who wanted to work in tech. Many of his friends preferred building trading platforms, as Singapore was on its way to becoming a financial powerhouse. But Chin stuck to engineering, a field he loves because it is always changing, and that keeps him on his toes. And, in a decade, he has risen from the position of mid-level manager at a cloud computing firm to become a systems engineering head at a tech MNC.

“There is a huge shift in tech now compared with when I [first came back to Singapore],” says Chin, who is head of systems engineering of Asean, Greater China and Korea at US-based data firm Pure Storage. He and his team design systems that let customers better utilise new technologies, including artificial intelligence (AI).

Chin is the kind of high-tech local talent that Singapore needs. There are no official figures on how many high-tech jobs are available in Singapore and how many Singapore residents are in these roles — such as software engineers and data scientists. The total number of employed residents aged 15 years and above in information and communications technology (ICT) grew from 2.4% to 3.2% from 2015 to 2018, according to data from the Ministry of Manpower. The total number of employed residents over the same period in science and engineering grew from 4.8% to 5.2%. But the figures pale in comparison to the total number of residents employed as managers and administrators (12%) and business professionals (12.1%) in 2018.

Employers and market observers are lamenting the lack of local talent in frontier technology, also known as deep tech, which could substantially change how things are done for businesses and people. And such technological capabilities are crucial ingredients if the country is to become the “smart” city it aspires to be.

Singapore officially announced its Smart Nation ambition in 2014, when it set up the Smart Nation Programme Office. It wants to transform the whole city state through technology, and in turn create new jobs and business opportunities to spur the next leg of economic growth. Part of its technological push is also a response to stay relevant in a time of rapid technological disruption. The government has since launched AI Singapore, a national AI programme that brings together local research institutions, start-ups and companies to develop AI products. A government-owned agency, SGInnovate, was also tasked with quickly building up Singapore’s tech ecosystem. Today, it makes investments in deep tech start-ups here.

The city state’s push to grow deep tech capabilities is also becoming more urgent as its external trade-reliant economy slows down. The official 2019 economic growth is projected to be between 0% and 1%, much lower than the 3.2% growth in 2018. This comes after a dismal 0.1% growth y-o-y for 2Q2019, the slowest in a decade.

For some economists, deep tech capabilities may better Singapore’s odds of staying competitive in an increasingly uncertain global economy. “The advantages are showing up for some countries,” says Chua Hak Bin, Maybank Kim Eng senior economist. “If you look at the market capitalisation of tech companies in the US stock market, it is double that of the banks. We too want to see some homegrown successes [such as those tech companies]. Today, tech companies make up a small percentage of our [stock exchange]. In terms of tech, countries are tapping 5G technology and cybersecurity. If we do not develop expertise in those areas, we are going to be vulnerable.”

Where’s the local talent?

The key to its success as a Smart Nation is Singapore’s ability to grow its engineering capabilities, especially in more senior roles. Yet, employers from MNCs to start-ups tell The Edge Singapore that locals skilled in deep tech are hard to come by, especially those in experienced roles.

To be clear, the tech talent crunch is not unique to Singapore. “These are all emerging tech fields that have arisen in tandem with the current wave of digitalisation in conjunction with the Fourth Industrial Revolution. While these technologies have been around discretely, their integrative deployment into what is known as ‘cyber-physical systems’ to power the Fourth Industrial Revolution explains the current global demand for such talents,” says Calvin Chan, an associate professor at the Singapore University of Social Sciences’ (SUSS) business school.

But the crunch is felt more keenly for a small country such as Singapore. It not only impedes its Smart Nation ambition but also its ability to attract global tech firms to locate their headquarters here, says Chua. In other words, Singapore needs a critical mass of these workers to grow its tech ecosystem, attract foreign investments and build tech companies — a message echoed by numerous local politicians over the past years.

Singapore recently unveiled a two-year programme that will make it easier for companies or MNCs here to hire tech talent. Called Tech @ SG, the pilot scheme, jointly launched by the Economic Development Board (EDB) and Enterprise Singapore (ESG), will facilitate the employment pass applications of “core team members” of certain technology companies, particularly those that operate in the digital, medtech, biotech, cleantech, agritech and fintech sectors. The Edge Singapore understands that the companies include those that have high potential for growth and possess a good funding track record.

The employees that these companies are expected to hire include those with frontier technology skills in areas such as data science, AI, cybersecurity and the Internet of Things (IoT). There will reportedly be some flexibility in employing these individuals. For instance, skills in deep tech may be considered in place of academic qualifications, and stock options may be counted as remuneration with regard to the salary requirement of at least $3,600 a month for the Employment Pass.

The move is warmly welcomed by both tech MNCs and local companies here. Market observers see the programme as a way to cultivate a local tech workforce by enabling them to work alongside global top talent. This is a tried-and-true method that has served Singapore well across the decades, according to Chua.

“In the 1990s, we established the banking system and grew the private asset management industry,” he says. “We got the international bankers [to come here] and that [helped grow the industry]. Now, [the] local asset companies [are flourishing]. Singapore has a vibrant financial sector; it is an international financial centre with hundreds of local and foreign financial institutions. There is a wide range of specialised jobs in banking and finance, from structured products [creators] to hedge fund managers to insurance specialists and so on. This took decades to build up, including the local talent pool.

“We did the same with the [semiconductor] companies. A lot of the smaller listed firms [such as Venture Corp] gained their experience from the likes of Hewlett-Packard.”

The semiconductor industry in Singapore produced $64.8 billion in output in 2015. Can the city state replicate the same success in the tech industry?

Overwhelming demand

According to recruitment agency Michael Page, the demand for jobs in Singapore’s tech industry has gone up 20% in the last one year. In particular, the firm says in its Salary Benchmark 2019 report that there is a high demand in Singapore for those who specialise in data science, e-commerce and digital marketing. Meanwhile, the number of start-ups in the field increased to 4,000 in 2017, from 2,800 enterprises in 2003, according to ESG. The tech start-up space employs about 22,000 people.

According to the 2018 Graduate Employment Survey, graduates from the Information and Digital Technologies cluster found employment quickly after graduation; about 94.8% of survey respondents secured work six months after graduation. The survey polled 14,987 full-time graduates from the National University Singapore (NUS), Nanyang Technological University (NTU), Singapore Management University (SMU), SUSS and Singapore University of Technology and Design (SUTD). The employment rate for such tech graduates has also been on a steady increase in the last three years, rising from 93.5% in 2016 to 94.2% in 2017 and 94.8% in 2018.

The industry is set to grow further. EDB, the Infocomm Media Development Authority and ESG have formed the Digital Industry Singapore joint office and aim to create 10,000 tech jobs in the next three years.

To meet the demand for a skilled workforce, the local universities have been ramping up deep tech programmes, but observers say the supply still falls short.

“There are too many jobs and too few qualified people to do them, [especially in] software engineering, AI and data science,” notes Ben Leong, an associate professor of computer science at the School of Computing at NUS.

Enrolment in computer science and engineering courses has almost tripled and now only straight-A students are accepted. NUS says it took in 1,250 undergraduate students this year for its School of Computing and Computer Engineering programme. Four years ago, 450 students were accepted.

“Five years ago, probably only Google, Grab and Sea had engineering teams in Singapore. Now, we also have Stripe, Apple, Shopify, Alibaba [Group Holding], ByteDance, Yitu, SenseTime and others. These companies pay very well for software engineers,” says ­Leong.

To be sure, there have been efforts to increase the number and variety of tech-related programmes in tertiary institutions here. Some universities have set up blockchain courses for undergraduate students as well. NTU recently introduced a new degree — Bachelor of Science in Data Science and Artificial Intelligence — available to students who matriculated in 2018 or later. According to NTU, the programme was rolled out in response to the rapidly developing field of data science and AI that has been gaining unprecedented traction in the global job market. Meanwhile, SUTD has introduced a minor in AI for students who have matriculated in year 2017 onwards. The university also says the undergraduate cohort for the Information Systems Technology and Design programme has tripled in size since 2014.

Earlier this year, the Singapore government announced plans that all upper primary students will take coding classes starting next year.

How to close the talent gap?

Even with all these initiatives, observers say Singapore’s growing number of graduates will not be sufficient to meet the industry’s appetite, especially as more global tech companies set up shop in Singapore. It is an absolute numbers game: There are just not enough tech workers here compared with larger markets such as India and China, says Maybank KE’s Chua. Most companies say they did not find it difficult to find local fresh graduates in deep tech, but it is challenging to employ those with a few years of experience under their belt. A former executive of a global tech company says it pays more than $6,000 for fresh graduates.

Google and Alibaba declined to disclose their tech staff breakdown between local and foreign employees. Some MNCs that spoke to The Edge Singapore say local staff make up about 50% of their tech teams, although one company reported higher figures.

“The majority of deep tech professionals are mostly foreigners,” says Khor Chern Chuen, managing director of enterprise software giant SAP Singapore. “However, deep tech is a growing field that is set to expand and evolve with the convergence of technologies such as AI, robotics and blockchain. With its growing application, demand for deep tech professionals is set to increase and attract locals towards deep tech roles.”

Other executives say they need people who possess technical skills as well as business acumen, and this is apparently a combination that is hard to come by in Singapore. “It is tough to get the deep tech capabilities that we need, ranging from technical operations and data science or data engineering to AI, because it is not just about R&D but also about using these skills to create solutions as operational tools and commercial products,” says Chris Murray, head of operations at engineering MNC Rolls-Royce. “We need people who not only have the technical knowledge but also understand operations.” Murray points out that as the company targets the niche aviation market, the available pool of skilled talent is even smaller. “Of the 80-plus core technology staff in Singapore, my R2 Data Labs team of 18 members is highly diverse, [comprising] 14 nationalities.”

Skills transfer

Singapore has always opened its doors to high-skilled foreign talent for economic growth, and in the process, this has helped build up the local workforce.

When Tech @ SG was launched, Chng Kai Fong, managing director of EDB, said it would allow Singaporeans to work alongside top global engineers and entrepreneurs. This will enable the country to upskill its local talent pool. An older programme, EntrePass, allowed eligible foreigners to start a business in the country and aimed to create jobs for Singaporeans.

But observers are divided over just how much skills transfer happens. To begin with, they point out that it takes significant effort to create a culture that fosters mentorship and knowledge transfer, not to mention the proactive effort on the part of local staff. Some tech MNCs say they do not have an internal mandate to facilitate such skills transfer and would prefer it to happen organically. “I think there is a need for flexibility and you cannot impose [mandatory skills transfer],” Maybank KE’s Chua says. “Global talent is mobile and well paid. Competition is very high. If there are too many restrictions, they would just go elsewhere.”

Certainly, as a comparatively small economy, Singapore needs to remain open to global business and talent in order to thrive or survive. But it could also do more to cultivate its own skilled workforce, particularly one that complements its economic growth goals.

“Having [foreign] talent here will not automatically lead to skills transfer. These [global workers] are recruited primarily to develop ‘smart solutions’ and not to train local talent. If the intent is to get these practitioner talent to transfer their skills to the locals, then purposeful approaches need to be designed to ensure that the transfer of skills to local talents will take place,” says SUSS’ Chan.

Annie Koh, vice-president of the business development unit at SMU, says: “It should be the social responsibility of these [employment pass holders] to mentor our local talent. The deep tech talent pool will need to have other talent to work with, not just those who graduated from degree programmes in universities.”

To be fair, the Singapore government has started a number of programmes to cultivate local talent in deep tech. This includes tech training programmes such as Tech­Skills Accelerator and the Capability Transfer Programme. The latter aims to transfer global capabilities to the local workforce by funding the salaries and training of foreign and local trainers. The programme is expected to involve 100 companies. Observers say there have also been efforts to attract Singaporeans in tech fields from overseas to Singapore. SGInnovate backs Entrepreneur First, a deep tech incubator that was started in Singapore three years ago. Entrepreneur First has built more than 50 start-ups here.

“Having a strong local talent pool in these cutting-edge skills is important because it represents talent security that is going to be committed to stay and contribute to the local economy in the medium to long term,” says Trevor Yu, associate professor at NTU’s business school. “At the same time, local talent can be cultivated through efforts to not only attract the best international talent but also to support the locally grown start-ups in the field.”

Small measures need to get bigger

While some efforts are being made to develop a deep tech workforce locally, the industry itself needs to step up. There must be concerted effort on its part, such as giving students or trainees enough industry exposure, including participation in R&D at the global tech companies based in Singapore. Proficiency in deep tech requires years of training and exposure and short-term programmes may not help in developing the right skills set.

“The problem in Singapore is that we don’t have the experienced engineering managers to provide guidance to our young engineers. So, we actually need Google to send its experienced engineers here to train the young ones,” says NUS’ Leong.

A local graduate says there were only a handful of professors he could turn to when he was studying computational biology at NUS. “The resources for my field were very limited,” says Chen Gengbo, who is now the principal data scientist for biotech start-up Biofourmis. “What we need is exposure to the industry and exposure to real-life data sets. The industry and universities need to work closer together so that students will be ready to enter the sector when they graduate.”

Some of the biggest companies are making efforts in this area. Hewlett Packard Enterprise takes in up to 25 interns under divisions that help hone digital and business skills. About half of the interns will be offered full-time employment. Alibaba runs a doctorate programme with NTU that is open to Singaporeans and permanent residents who want to pursue a doctorate in computer science-related fields. Students also have the opportunity to work at Alibaba’s labs in China and Singapore. There have been more than 1,000 applicants since the programme started, and about a few dozen have been accepted. Separately, SAP worked with SkillsFuture Singapore to launch SAP Skills University Singapore last year. It delivers training programmes for Singapore in emerging tech fields such as AI and IoT. The programme has taken in some 210 candidates so far.

“We used to hire only graduates. We’ve now started hiring polytechnic graduates as well,” says IBM Singapore’s managing director Abraham Thomas. “We put them through a one-year internship, offering them an opportunity to work with our clients or partners.”

Other industry players agree that skills transfer needs to be intentional and that there is still a lot more that companies here can do. Tok Soon Chong runs the local subsidiary of London-based autonomous mobility firm Aidriver. He brings in engineers from the UK to train the three Singapore tech staff he has here. Tok says there are plans to train the Singapore staff to become regional leads.

Pure Storage’s Chin says companies can provide more flexibility for staff to learn across various disciplines. “Sometimes, we get caught up with chasing goals and numbers, but we need to give employees a chance to try something new. It is also important to send them overseas for training and do deals outside of Singapore for exposure,” he notes.

As a small country, Singapore needs to attract global companies and workers. But it also should not take things for granted amid growing geopolitical tensions and protectionist sentiment that may force companies to return to their countries of origin. And, as the city state continues to be open to the world’s talent, it must not overlook the potential of its domestic workforce. — With additional reporting by Uma Devi, Benjamin Cher and Kok Xinghui

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