the emerging digital economies of asia

8/6/2019 The Emerging Digital Economies of Asia

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Development, Policies &Opportunities in

The EmergingDigital Economiesof Asia

The Transformation of Research &Developmentin East Asia and Japan Seminar Series

US-Japan Technology Management CenterSchool of Engineering, Stanford University30 September 1999

Harry SK TanAsst ProfessorNanyang Business School


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Why Focus R&D inWhy Focus R&D inElectronic CommerceElectronic Commerce

Technologies? Technologies?


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HarrySK Tan,

1998 US Dept of Commercereport

How long to reach 50 mil users? Radio in 38 years; TV in 13 years; Internet by 4 years

[1994 -3mil users] - [1997-100milusers]

Traffic X2 every 100 days Domain names

[26,000 - Jul 1993] - [1.3 mil - Jul 1997]


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HarrySK Tan,

1998

2001Total WWW users (million) 6.8623.31

Total WWW buyers (million) 1.186.83

Overall e-commerceper year (US$m) 700.42

16,538.18

(from Asia/Pacific Internet Market Forecast for Internet Commerce,(from Asia/Pacific Internet Market Forecast for Internet Commerce,

1996 2001 by IDC in 1996)1996 2001 by IDC in 1996)

Internet Commerce in Asia PacificInternet Commerce in Asia Pacific


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HarrySK Tan,

What is this presentationWhat is this presentationabout?about?

Part I -Part I - Competitive Strengths of AsiaCompetitive Strengths of AsiaPacific Digital EconomiesPacific Digital Economies

Part II -Part II - Transformation of Singapores R&D Transformation of Singapores R&Dlandscapelandscape

Part III -Part III - High Tech R&D and BusinessHigh Tech R&D and BusinessOpportunities in SingaporeOpportunities in Singapore


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Part IPart I


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The Emerging AsiaPacificDigital Economies

Malaysia Japan

Australia Singapore


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What do we look at?What do we look at?

1. General political, current events &1. General political, current events &policiespolicies

2. Competitive Factors2. Competitive Factors LabourLabour

Technology Infrastructure Technology Infrastructure

Sources of CapitalSources of Capital Taxes Taxes

MarketsMarkets


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MalaysiaMalaysia


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Malaysia - generallyMalaysia - generally

Recovering from Asian Flu and other eventsRecovering from Asian Flu and other events Ambitious Vision 2020 masterplan - to becomeAmbitious Vision 2020 masterplan - to become

a fully-developed, matured and knowledge-richa fully-developed, matured and knowledge-richsocietysociety

Has a much publicised national plan for IT & E-Has a much publicised national plan for IT & E-Commerce HubCommerce Hub

Low cost and good quality of lifeLow cost and good quality of life

Multimedia Super Corridor (MSC) beingMultimedia Super Corridor (MSC) beingconstructedconstructed


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What is the MSC?What is the MSC?

Area - 15km by 50km, encompassing theArea - 15km by 50km, encompassing theKuala Lumpur City, Putrajaya and CyberjayaKuala Lumpur City, Putrajaya and Cyberjaya

Putrajaya - new electronic government capitalPutrajaya - new electronic government capital

Cyberjaya - the intelligent city of intelligentCyberjaya - the intelligent city of intelligentbuildings for multimedia industries and R&Dbuildings for multimedia industries and R&Dcentrescentres

2.5-10 gigabyte fiber-optic network being built2.5-10 gigabyte fiber-optic network being builtinto the MSCinto the MSC


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MSC Bill of GuaranteeMSC Bill of Guarantee2. Allow2. Allow unrestricted employmentunrestricted employment of local andof local and

foreign knowledge workers.foreign knowledge workers.3. Ensure3. Ensure freedom of ownershipfreedom of ownership by exemptingby exempting

companies with MSC Status from localcompanies with MSC Status from local

ownership requirements.ownership requirements.7. Ensure7. Ensure no Internet censorshipno Internet censorship ..9.9. Tender Tender MSC infrastructure contracts toMSC infrastructure contracts to

companies willing to use the MSC as theircompanies willing to use the MSC as their

regional hub.regional hub.


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- conomy ompe ve- conomy ompe veFactorsFactors LabourLabour

Large labour force BUT also need large amount of ITLarge labour force BUT also need large amount of ITprofessionals by 2000professionals by 2000

Multimedia University in CyberjayaMultimedia University in Cyberjaya started its operations in Cyberjaya in May 1999 with anstarted its operations in Cyberjaya in May 1999 with an

initial intake of about 3000 students.initial intake of about 3000 students.

Multimedia University to provide R&D facilitiesMultimedia University to provide R&D facilities unrestricted work permit policies for foreignunrestricted work permit policies for foreign

knowledge workersknowledge workers

InfrastructureInfrastructure

Telecommunications backbone for 2.5 - 10 Gbps Telecommunications backbone for 2.5 - 10 Gbps One-stop client centre that will expedite visas andOne-stop client centre that will expedite visas and

other licences and permitsother licences and permits


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D-Economy CompetitiveD-Economy CompetitiveFactorsFactors

Sources of CapitalSources of Capital Malaysian Exchange of Securities DealingMalaysian Exchange of Securities Dealingand Automated Quotation (MESDAQ)and Automated Quotation (MESDAQ)

Tax Framework Tax Framework 0 % income tax for up to 10 years in MSC or0 % income tax for up to 10 years in MSC or 100% investment tax allowance100% investment tax allowance No duties on multimedia equipmentNo duties on multimedia equipment

MarketsMarkets Small consumer market with relativelySmall consumer market with relativelylow IT skillslow IT skills


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Japan Japan


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Japan - generally Japan - generally

EEconomic powerhouse (?)conomic powerhouse (?) GGood IT infrastructureood IT infrastructure

GGovernment also recognises theovernment also recognises theimportance of EC and raising investmentimportance of EC and raising investment

Top NII in Region Top NII in Region

High Cost of Living & High PressureHigh Cost of Living & High Pressurecultureculture


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Japan High Tech R&D Japan High Tech R&D

Push for Research and development of thePush for Research and development of theNext Generation InternetNext Generation Internet Ultra high-speed data transmissionUltra high-speed data transmission

Secure and reliable transmission of electronicSecure and reliable transmission of electronicmoney datamoney data

Digital watermarks for protection of IPRsDigital watermarks for protection of IPRs

Improved reliability of the Internet in generalImproved reliability of the Internet in general

Authentication of web sitesAuthentication of web sites

http://www.mpt.go.jp/whatsnew/CyberBusiness.htmlhttp://www.mpt.go.jp/whatsnew/CyberBusiness.html


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HarrySK Tan,

D-Economy CompetitiveFactors Labour

availability of highly specialised pools of labour

Technology world leader in application of technology and

electronic consumer products R&D some companies already have a ten-year history

with smart cards

Infrastructure

Japanese national backbone running at the samespeed as the U.S. backbone. Fastest international line ever on the Internet at

that time at 45Mbps


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HarrySK Tan,

D-Economy CompetitiveD-Economy CompetitiveFactorsFactors Sources of CapitalSources of Capital

depressed markets dampen interest in WWWdepressed markets dampen interest in WWW

9.6 billion yen from govt. to provide interest free9.6 billion yen from govt. to provide interest freeloans for small businesses.loans for small businesses.

Tax Framework Tax Framework relief to help stimulate capital investment forrelief to help stimulate capital investment for

companies and in communications.companies and in communications.


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AustraliaAustralia


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HarrySK Tan,

AustraliaAustralia

A developed nation - seriousA developed nation - seriouscontender after Japan for top in EC incontender after Japan for top in EC inthe regionthe region

Stable economy - growth even in theStable economy - growth even in theAsian financial crisisAsian financial crisis

A major content producer as well asA major content producer as well asinnovative IT solutionsinnovative IT solutions

High Quality of LifeHigh Quality of Life


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HarrySK Tan,

Australian projectsAustralian projects

Intends to be the EC hub of Asia PacificIntends to be the EC hub of Asia Pacific Prime mover to standardise efforts,Prime mover to standardise efforts,

echnology and regulation for APEC E-echnology and regulation for APEC E-

CommerceCommerce Developing high bandwidth connectionDeveloping high bandwidth connection

with rest of Asiawith rest of Asia

Deregulated telecommunicationsDeregulated telecommunicationsindustryindustry


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HarrySK Tan,

D-Economy CompetitiveFactors

Labour highly educated workforce English language augmented by multilingual diversity

Culture of creativity promotes entrepreneurialactivities needed for electronic commerce

Technology SME delayed the adoption of new technology

because they do not see immediate benefits. Bigger corporations also view the technology

as unreliable.


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HarrySK Tan,


InfrastructureInfrastructure excellent infrastructure, competitive skills of itsexcellent infrastructure, competitive skills of its

workforce and low cost of operationsworkforce and low cost of operations

Optus - high-speed high bandwidth (155Mbps)Optus - high-speed high bandwidth (155Mbps)accessaccess

Sources of CapitalSources of Capital Venture funds and capital funds are notVenture funds and capital funds are not

centrally availablecentrally available

State of Victoria highly motivated in EC R&DState of Victoria highly motivated in EC R&D


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HarrySK Tan,


Tax Framework Tax Framework Currently no tax breaks available forCurrently no tax breaks available for

investorsinvestors

MarketsMarkets sophisticated consumer marketsophisticated consumer market

The domestic market is huge and well The domestic market is huge and well

connectedconnected English educatedEnglish educated


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SingaporeSingapore


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HarrySK Tan,

SingaporeSingapore

Stable financially and politically in aStable financially and politically in aturbulent regionturbulent region

NII in place -NII in place - Singapore ONESingapore ONE

GG overnment investing heavily in ECovernment investing heavily in EC

Population has high IT literacyPopulation has high IT literacy

Widespread application of Widespread application of information technologies in homes,information technologies in homes,businesses & schoolsbusinesses & schools


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HarrySK Tan,

D-Economy CompetitiveFactors Labour

Currently available large pool of IT knowledgeworkers but still insufficient to meet demand

Multiracial, Multilingual population National programme to train up to 250k workers

to be IT literate in 5 years on track

Technology Multiple uses for Smart cards - e.g. Electronic

Road Pricing 10,000 smart card readers distributed for EC

transactions using 128 bit encryption technology Homes and Offices are already wired for speed

C i i


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HarrySK Tan,


InfrastructureInfrastructure 36% (1 in 3) of Singapore household36% (1 in 3) of Singapore household

own computers but only 14% of theown computers but only 14% of thepopulation own email accountspopulation own email accounts

Singapore ONE - Multimedia content &Singapore ONE - Multimedia content &servicesservices

Fast broadband home access to theFast broadband home access to the

Web via Cable Modem (10 Mbps) &Web via Cable Modem (10 Mbps) &ADSL (5.5 Mbps)ADSL (5.5 Mbps)

D E C i i


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HarrySK Tan,


Available infrastructure servicesAvailable infrastructure services Online Secure PaymentOnline Secure Payment - SET; Cashcard- SET; Cashcard

(C-ONE)(C-ONE)

Directory ServicesDirectory Services - National Contact Information System,- National Contact Information System,- Business Information Locator- Business Information Locator- Calendar ONE & Shopping Village- Calendar ONE & Shopping Village

Electronic IdentificationElectronic Identification - Infrastructure for- Infrastructure forElectronic Identification (IEI) Project usingElectronic Identification (IEI) Project usingDigital Signatures (ongoing)Digital Signatures (ongoing)

D E C i i


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HarrySK Tan,


Infrastructure (Continued)Infrastructure (Continued) New Finance & Venture CapitalNew Finance & Venture Capital

Legal and Policy Framework for ECLegal and Policy Framework for EC

Electronic Transaction Act 1998Electronic Transaction Act 1998 Electronic Transactions (Certification Authority)Electronic Transactions (Certification Authority)

Regulations 1999Regulations 1999

Nation wide EC ApplicationsNation wide EC ApplicationsCPF Online; URA; SNS Tradenet; NCSCPF Online; URA; SNS Tradenet; NCSSelfserve; AsiaOne; Sistic; POSB InternetSelfserve; AsiaOne; Sistic; POSB InternetBanking etcBanking etc


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HarrySK Tan,


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Part IIPart II

Transformation of Transformation of Singapores R&DSingapores R&Dlandscapelandscape

Part IIPart II

Transformation of Transformation of Singapores R&DSingapores R&Dlandscapelandscape


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HarrySK Tan,

The questions... The questions...

Where is mainstream highWhere is mainstream hightechnology R&D going and why?technology R&D going and why?

How has it changed the R&DHow has it changed the R&D

landscape?landscape? Singapore Model for R&D:Singapore Model for R&D:

((High Tech Entrepreneurship =High Tech Entrepreneurship = Technopreneurship) Technopreneurship)


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... challenge for the Singapore

... challenge for the Singaporeeconomy in the 21st century was toeconomy in the 21st century was torapidly transit from a capital-rapidly transit from a capital-intensive manufacturing and intensive manufacturing and services economy to a globally services economy to a globally competitive advanced competitive advanced knowledgeknowledgeeconomy economy with a strong and with a strong and vibrant vibrant technopreneurshiptechnopreneurship sector within thesector within thenext decade. next decade.

DPM Dr Tony TanDPM Dr Tony Tan

... challenge for the Singapore... challenge for the Singaporeeconomy in the 21st century was toeconomy in the 21st century was torapidly transit from a capital-rapidly transit from a capital-intensive manufacturing and intensive manufacturing and services economy to a globally services economy to a globally competitive advanced competitive advanced knowledgeknowledgeeconomy economy with a strong and with a strong and vibrant vibrant technopreneurshiptechnopreneurship sector within thesector within thenext decade. next decade.

DPM Dr Tony TanDPM Dr Tony Tan


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What is SingaporesWhat is Singaporesnew Strategic plan?new Strategic plan?What is SingaporesWhat is Singaporesnew Strategic plan?new Strategic plan?


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HarrySK Tan,

Technopreneurship 21 Technopreneurship 211.1. New FundsNew Funds - US $1 billion - seed money for- US $1 billion - seed money for

developing Singapore into a venture capital centredeveloping Singapore into a venture capital centre

2.2. EducationEducation - to build a risk-taking mind set- to build a risk-taking mind set

3.3. FacilitiesFacilities - build comfortable, attractive, safe and- build comfortable, attractive, safe andconducive facilities to attract talentconducive facilities to attract talent

4.4. Deregulate & Laws changedDeregulate & Laws changed - to support the- to support theentrepreneurial environment.entrepreneurial environment.


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1. Funding1. Funding

So rces of C pit l &Sources of Capital &


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HarrySK Tan,

Sources of Capital &Sources of Capital &FundingFunding EDB - Economic DevelopmentEDB - Economic DevelopmentBoardBoard

GIC - Government Investment CorpGIC - Government Investment Corp

NSTB - National Science &NSTB - National Science & Technology Technology

BoardBoard NCB - National Computer BoardNCB - National Computer Board

Si ' US$1b h lSi ' US$1b t h l


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HarrySK Tan,

Singapore's US$1b technologySingapore's US$1b technologyfundfund National Science and Technology Board (NSTB)National Science and Technology Board (NSTB) willwill

manage US$250 million to co-invest with the privatemanage US$250 million to co-invest with the privatesector to develop Singapore-based startups withsector to develop Singapore-based startups withideas at seed-stage.ideas at seed-stage.

Government of Singapore Investment CorporationGovernment of Singapore Investment Corporation(GIC)(GIC) will manage the remaining US$750 millionwill manage the remaining US$750 millionthrough two fundsthrough two funds

US$500 million broad-based Fund of FundsUS$500 million broad-based Fund of Funds

US$250 million Strategic Fund.US$250 million Strategic Fund.


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HarrySK Tan,

NSTB FundsNSTB Funds Business Angel FundBusiness Angel Fund

Technology Incubator Program Technology Incubator Program

Technology Development Fund Technology Development Fund

Patent Application Fund (PAF)Patent Application Fund (PAF) Research and Development AssistanceResearch and Development Assistance

Scheme (RDAS)Scheme (RDAS)

Innovator Assistance SchemeInnovator Assistance Scheme

Incubation Support (Innovation Centre)Incubation Support (Innovation Centre)

Technopreneur Assistance Centre Technopreneur Assistance Centre


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HarrySK Tan,

NCBNCB

IT Cluster Development FundIT Cluster Development Fund Local Enterprise Electronic CommerceLocal Enterprise Electronic Commerce

ProgrammeProgramme

IT Co-Investment Fund (ITCF)IT Co-Investment Fund (ITCF) Broadband R&D GrantBroadband R&D Grant Business Headquarters ProgramBusiness Headquarters Program Initiatives in New Technology SchemeInitiatives in New Technology Scheme Pioneer Status Investment AllowancePioneer Status Investment Allowance


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HarrySK Tan,

Other ResourcesOther Resources

National Patent Information CentreNational Patent Information Centre National Technology DatabankNational Technology Databank

People NetworkingPeople Networking

Innovators ClubInnovators Club

Technology Networking Group Technology Networking Group

Mentoring ProgrammeMentoring Programme


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2. Education2. Education


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HarrySK Tan,

Review of EducationReview of Education

Universities to be more independentUniversities to be more independent in managing its fundsin managing its funds

staff recruitment andstaff recruitment and

governance structuregovernance structure

Undergraduate & PostgraduateUndergraduate & Postgraduate

programmes and Forums inprogrammes and Forums in Technopreneurship at both Universities Technopreneurship at both Universities


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HarrySK Tan,

NANYANG T h l i l


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48HarrySK Tan,1999

School of Mechanical and Production EngineeringSchool of Mechanical and Production Engineering

Introduce students to essential business skills and toIntroduce students to essential business skills and toprovide them with a road-map on the high techprovide them with a road-map on the high techentrepreneurial process.entrepreneurial process.

SCOPE:SCOPE:

(1) Starting and running a business modules(1) Starting and running a business modules

(2) Enrichment modules on business skills and strategy(2) Enrichment modules on business skills and strategy

(3) Visits to companies(3) Visits to companies(4) Project with emphasis on technology, business(4) Project with emphasis on technology, business

survey and planningsurvey and planning

NANYANG TechnologicalU N I V E R S I T Y SINGAPORE


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49HarrySK Tan,1999


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3. New Facilities3. New Facilities

kSi S i P k I


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Singapore Science Park ISingapore Science Park I& II& II


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52HarrySK Tan,1999

New Buona Vista Science HubNew Buona Vista Science Hub Being built at cost of $5 billion, where ideasBeing built at cost of $5 billion, where ideas

born within a scientific community areborn within a scientific community arecradled, nurtured and developed intocradled, nurtured and developed intocommercial ventures.commercial ventures.

176 ha of the Buona Vista area, (three times176 ha of the Buona Vista area, (three timesthe size of the present two Science Parks)the size of the present two Science Parks)

Next to National University of Singapore,Next to National University of Singapore,

INSEAD and Johns Hopkins University willINSEAD and Johns Hopkins University willestablish a presence thereestablish a presence there


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4. Deregulation &4. Deregulation &Changing of Changing of LawsLaws


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54HarrySK Tan,1999


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55HarrySK Tan,1999

Laws ChangedLaws Changed Easier for foreigners to set up businesses inEasier for foreigners to set up businesses in

Singapore - e.g. long term visas withoutSingapore - e.g. long term visas withoutemploymentemployment

Bankruptcy Laws:Bankruptcy Laws: Minimum threshold for filing bankruptcy increasedMinimum threshold for filing bankruptcy increased

from S$2,000 to S$10,000from S$2,000 to S$10,000 Debts of under $500k can be discharged lowered toDebts of under $500k can be discharged lowered to

3 years (from 5 years)3 years (from 5 years)

Employee can defer tax liabilities for 5 yearsEmployee can defer tax liabilities for 5 years

when exercising their stock option rightswhen exercising their stock option rights Investors may qualify for tax deduction forInvestors may qualify for tax deduction for

investing in failed start-upsinvesting in failed start-ups


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56HarrySK Tan,1999

Public Housing RegulationsPublic Housing Regulations

Amended Housing RegulationsAmended Housing Regulations Permit HDB property owners to:Permit HDB property owners to:

Use their homes as their registered place of Use their homes as their registered place of

businessbusiness As a garage to develop their productsAs a garage to develop their products

Subject to minor conditionsSubject to minor conditions

Public & Statutory BoardPublic & Statutory Board


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57HarrySK Tan,1999

Public & Statutory BoardPublic & Statutory BoardPracticesPractices

Standard minimum requirementsStandard minimum requirementsfor public tenders and contractsfor public tenders and contractslowered to allow new start-ups tolowered to allow new start-ups to

bidbid


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Part IIIPart III

High Tech R&D andHigh Tech R&D and

Business OpportunitiesBusiness Opportunitiesin Asiain Asia


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60HarrySK Tan,1999

B i O i i


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61HarrySK Tan,1999

Business OpportunitiesBusiness OpportunitiesBusinesses -Businesses -

Asian Content servicesAsian Content services Super intermediary services for AsianSuper intermediary services for Asian

retailers in USretailers in US

Supply chain solutions for SMEsSupply chain solutions for SMEs Logistics & Distribution Centre in US forLogistics & Distribution Centre in US for

Asian businesses - and in Asia for USAsian businesses - and in Asia for USbusinessesbusinesses

Innovative Culture-centric MarketingInnovative Culture-centric Marketing World Class Asian Portal Sites - e.g. CNETWorld Class Asian Portal Sites - e.g. CNET

AsiaAsia


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Thank You Thank You

Contact SingaporeContact SingaporeMs Serene TanMs Serene Tan

210 Twin Dolphin Drive210 Twin Dolphin DriveRedwood City, CA 94065Redwood City, CA 94065

email: [email protected]: [email protected]: (650) 5913828tel: (650) 5913828url:url:

htt : www.contactsin a ore.or .s


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HarrySK Tan,

- End of Presentation -

Harry SK Tan Assistant Professor

Nanyang Business School, S3-01C-102Nanyang Technological University

Nanyang Avenue, Singapore (639798)

Tel: (65) 790 4630Email: [email protected] OR

[email protected]

Law OnlineLaw Online @@ NBSNBS


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SK Tan,1999

Business LawBusiness Law @nbs@nbshttp://www.ntu.edu.sg/nbs/blhttp://www.ntu.edu.sg/nbs/bl

Asia Business Law Review HomepageAsia Business Law Review Homepagehttp://www.asiabizlaw.ntu.edu.sghttp://www.asiabizlaw.ntu.edu.sg

Law & Ethics of Information TechnologyLaw & Ethics of Information Technologyhttp://www.ntu.edu.sg/nbs/mba/courses/http://www.ntu.edu.sg/nbs/mba/courses/

Management & Resolution of BusinessManagement & Resolution of BusinessDisputesDisputes

http://www.ntu.edu.sg/nbs/bl/mrbdhttp://www.ntu.edu.sg/nbs/bl/mrbd

Law OnlineLaw Online @@ NBSNBS

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