BY AMIT ROY CHOUDHURY

EVEN with the current economic crisis, technology companies in Singapore are forging collaboration agreements - alliances and joint ventures, among others - with both local and foreign companies, thus increasing their interdependency, according to a new study by PricewaterhouseCoopers (PwC).

The global study, Technology Executive Connections: Managing the risks and rewards of collaboration, shows that growing complexity and interdependency of technology products are driving home the need for various formal kinds of collaboration with third parties.

Greg Unsworth, PwC's Asia Pacific technology industry leader, noted that the collaboration, whether it is strategic alliances, joint ventures or other arrangements, makes sense as it is becoming difficult for any single company to deliver all things to all customers.

Results driven

Speaking to BizIT, Mr Unsworth noted that like their global and regional counterparts, Singapore-based technology companies' move to collaborate more effectively for results is driving new behaviours, business models and relationships.

'As more companies are using Singapore as a distribution hub, the need to integrate their supply chain with others in the region is becoming more necessary,' Mr Unsworth noted.

He added that utilising business partners to enter and expand into new and emerging markets is also becoming increasingly important.

Mr Unsworth noted that Singapore is already being used as the centre of competence for managing business partner arrangements for the region for many of these multinationals.

'These companies are also often choosing Singapore as a location to manage portfolios of intellectual property (IP), which also further encourages collaborative efforts around research and development.'

Partner selection and establishing the appropriate legal structures and agreements to manage these arrangements - especially if they cut across borders - are two key issues for companies in establishing integrated supply chains, he said.

The need to ensure effective performance of partners, whether through service agreements or relationship management programmes, is also becoming more important for companies, especially those who have learnt from past experiences.

'The other reason why we expect collaboration to take off in a more serious way in Singapore in future is the role that collaborative R&D efforts will be expected to play within Singapore-based technology companies,' Mr Unsworth said.

The PwC official observed that government funding has been encouraging the development of Singapore as an R&D centre.

In this context, he noted that a lot of interest and attention has been placed around the newly announced $230 million Singapore Media Fusion fund.

'With local enterprises keen on developing media content, applications and services and develop the local media talent base, the fund provides a much needed help to grow. Coming on top of plans to develop Mediapolis at One-North, this gives a tremendous boost to Singapore's digital media development ambitions.'

Without doubt, collaboration will be critical to the growth of digital media and related technologies, Mr Unsworth noted.

He added that the need for a convergence play, centred around digital capabilities and integrated services through enhanced technologies, will be even greater.

'With further development of advanced mobile devices and software enabling greater levels of interactivity, collaboration in this space will open up opportunities in the new digital media space.'

'Coopetition' models

Mr Unsworth, however, added a note of caution.

'Asian companies have not matured as far in developing their collaborative efforts as in the US and Europe, especially when it relates to 'coopetition' models which involve working together with competitors on specific projects of mutual interest and benefit, as indicated in one of the findings of the PwC survey,' he said.

Perceived risk relating to protecting IP and fear of proprietary strategic plans falling into the hands of competitors are clearly reasons why Asian companies have not exactly warmed up to collaborating with industry peers, he added.

Like other countries, Singapore-based companies do need to consider reputational risk, data security and integrity, and governance as they take on new business partners and expand their business into new markets.

'With Asian companies, including Singapore-based technology companies, upping the ante in collaboration, as the PwC survey findings bear out, IP needs will only expand in the future.'

Mr Unsworth noted that Singapore has always been seen as having a robust and transparent legal system to help ensure IP protection - 'this is one of the key pillars that the Singapore government is relying on to spur increasing research and innovation in Singapore'.

Having a reliable IP protection environment helps establish Singapore as a regional, and in some cases global, hub for management of IP portfolios for many companies, he added.

This article was first published in The Business Times.