112. Singapore is pleased to co-sponsor agenda items 11 and 12 and will address them together. I would first like to thank the US for drafting the paper to wrap up and summarise the fruitful discussions that the membership had in 2020 and early 2021 on "Making MSMEs Competitive Through IP and Innovation", in relation to Trademarks, Inclusive Protection of Various IPRs and Green Technology. Various Members' national policies, initiatives and platforms were showcased, which provided food for thought for us on how governments, business, academia and other key stakeholders can come together to synergise and identify the best ways to ensure IP can benefit our citizens, businesses and the whole world at large. Singapore was happy to have contributed to these discussions in a substantive manner, and we are heartened to note that engagement on this topic was high throughout the year.
113. We would also like to thank the UK for submitting the discussion paper on "IP for Investment/Financing/Funding", which touches on how Members could tap on the potential in financing from the innovation process to bring benefits to more people. The UK's paper is useful in stimulating discussions on understanding how businesses can overcome difficulties in using their existing or potential IP assets to unlock funding and improve cash flow, and how various Members can support such efforts. Allow me to now share two recent projects that Singapore launched on IP financing, and the lessons we learnt from our experience.
IP Financing Scheme (IPFS)
114. Singapore launched the IP Financing Scheme (IPFS) in April 2014 to help IP-rich (but physical asset-light) companies to increase access to IP financing. Under this scheme, the Singapore Government shared the risk of the IP loan with the Participating Financial Institution (PFI) to encourage financial institutions to accept IP assets (namely patents, trademarks, and copyright) as collateral in support of the loan. A valuation report by a panel of valuers (appointed based on their experience in IP valuation) was required for the application. PFIs will undertake the due diligence process in assessing the credit worthiness and the business case of the applicants. The scheme was retired in 2018, after a total loan amount of SGD 12 million was disbursed from the PFIs. Three companies from various sectors successfully collateralised their IP assets to obtain funding necessary to support their working capital needs, and research and development and expansion plans.
Intangible Disclosure Evaluation and Audit Scheme (IDEAS)
115. In 2020, the Intellectual Property Office of Singapore (IPOS) and Singapore Exchange (SGX) jointly launched the Intangible Disclosure Evaluation and Audit Scheme (IDEAS) programme exclusively for SGX-listed companies and companies preparing for a listing. The programme aimed to raise awareness and encourage companies to undergo intangible assets (IA) evaluations and promote a more robust IA disclosure environment. This will help investors better appreciate the value of intangible assets and support companies in capital raising. The IDEAS programme provided companies with government support to undergo an IA evaluation and audit process. The process enabled companies to identify important IA information that are key drivers to their businesses and make recommendations on disclosing such important information to communicate business value to the market. Greater transparency and clarity in IA disclosures will help companies build investor trust and enhance the effectiveness of the Singapore capital market in helping IA-rich business raise capital, as the knowledge economy shifts away from the traditional indicators of performance grounded in intangible asset values.
Learning Points and Future Plans
116. Singapore's effort in developing our IP financing sector has helped create market awareness that IP is a valuable asset. We remain committed to supporting our enterprises' growth and profitability through leveraging their intangible assets for commercialisation. Our experience has shown that a number of factors, such as cost of financing, market familiarity with the value of IP/IA assets, and a vibrant IP marketplace, are important in driving the development of IP financing. As outlined in the Singapore IP Strategy (SIPS) 2030 launched on World IP Day 2021, going forward, Singapore aims to build an enabling infrastructure for IA/IP financing and transactions by:
a. developing a credible and trusted IA/IP valuation ecosystem;
b. enhancing financial institutions' appreciation and assessment of IA/IP so the underlying risks and rewards of financing innovation-driven businesses are reflected accurately; and
c. providing platforms and connections to facilitate transactions.
117. We look forward to hearing from other Members on their national experiences.