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The Challenges in Singapore Newater Development: Co-Evolutionary Development for Innovation and Industry Evolution

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The Challenges in Singapore Newater Development: Co-Evolutionary Development for Innovation and Industry Evolution Technology in Society 33 (2011) 200–211 Contents lists available at ScienceDirect Technology in Society journal homepage: www.elsevier.com/locate/techsoc The challenges in Singapore NEWater development: Co-evolutionary development for innovation and industry evolution Michele Y.C. Chew a,*, Chihiro Watanabe a, Yuji Tou b a Faculty of Engineering, Division of Engineering & Technology Management, National University of Singapore, Block EA, #05-34, 9 Engineering Drive 1, Singapore 117576 b Graduate School of Decision Science and Technology, Tokyo Institute of Technology, Japan abstract Keywords: Co-evolutionary dynamism between innovation and institutional systems by transforming Indigenous capability external crises into a springboard for new innovation is crucial for innovation and industry Water evolution in resource-constrained nations. This has been demonstrated by Japan’s success Singapore in overcoming the energy crises in the 1970s and subsequent high-technology miracle in Co-evolution the 1980s. Similar to Japan’s energy security, securing water is crucial for Singapore as Acclimatization approximately a third of the water supply is imported. This study traces the extensive stepwise endeavors Singapore undertook to address this problem. Initial attempts of learning from imported technology lead to the development of indigenous capabilities followed by export acceleration. This in turn has lead to a phenomenon observed and described as co-evolutionary “acclimatization”, which has enabled the nation to success- fully substitute 30% of water demand with technology-driven NEWater. This paper demonstrates the challenges faced in developing and disseminating these leading-edge technologies. The final result is “localizing” knowledge and creating local innovation using the knowledge from leading global firms thereby providing mutual benefits to competitors leading to the co-evolution between innovation and institutional systems. This co-evolutionary process provides new insights into innovation and industry emer- gence, particularly for inducing the economies at the bottom of the pyramid. Ó 2011 Elsevier Ltd. All rights reserved. 1. Introduction given that its energy self-sufficiency rate was only 18% and it was 99% dependent on imported oil [4]. Importantly, this Japan constructed a sophisticated co-evolutionary substitution was also enabled by trans-sectorial assimila- dynamism between innovation and institutional systems tion, learning and the utilization of core technologies. In by transforming external crises into a springboard for new addition, it involved long-term planning as well as appro- innovations [1]. This can largely be attributed to some priate and timely government intervention which unique institutional features of the nation including contributed to the successful growth of Japan’s high tech- a strong motivation to overcome the fear of xenophobia, nology industry in the 1980s [5]. uncertainty avoidance, abundant curiosity, assimilation Similarly, the water security issue is one of the most proficiency, and thoroughness in learning and absorption crucial problems for Singapore’s sustainability as it is [2,3]. These underlying factors played a role in Japan’s dependent (33%)1 on imported water. As a consequence of successful technology substitution for energy in the 1970s. this, strategic options include increasing local catchment, This technology substitution was critical for Japan’s survival 1 Figures as of Dec 2008 from “NEWater: From Sewage to Safe”. Last * Corresponding author. assessed on 30 Oct 2010 http://www.adb.org/Water/Actions/sin/ E-mail address: [email protected] (M.Y.C. Chew). NEWater-Sewage-Safe.asp. 0160-791X/$ – see front matter Ó 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.techsoc.2011.06.001 M.Y.C. Chew et al. / Technology in Society 33 (2011) 200–211 201 importing water, desalination and recycling water. Table 2 Singapore has leveraged these options uniquely to develop Trend in NEWater dependency in Singapore (2003–2011) – %. NEWater (recycled water) by innovation. The production Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 process of NEWater involves a comprehensive system of NEWater 1.7 3.7 5.3 9.0 16.4 22.2 24.6 27.4 30.4 innovation conferred by a sophisticated combination of dependency innovation in membrane technology and the optimal utili- zation under extremely subtle operating parameters, technology leapfrogging was successfully elucidated, the enabling technology substitution for conventionally treated conceptualization and operationalization of this dynamism ’ water. Singapore s sophisticated level of information tech- is required for broad application. nology (IT) developed under the auspices of its unique This paper uses an empirical analysis utilizing diffusion institutional features, accelerated this substitution. Reduc- [8–10], learning [11–13,22], and substitution [5,14–16] tion in the cost of NEWater was critical for success, and this theories. It then does a cross evaluation and interpreta- was triggered by the intensive research and development tion based on the analyses of the co-evolution [17,18] with fi (R&D) efforts of leading rms such as The Dow Chemical institutional systems [5,19–22] and “acclimatization” [23] Company and Asahi Kasei. The cost was reduced over time as theories, in order to demonstrate that innovations a result of a virtuous cycle of successive R&D, learning effects emerging from research and development in NEWater and economies of scale. Today, NEWater systems (core improves the institutional systems which in turn induces technologies and operation/management know-how) are further innovation. being exported globally and inspiring a new tech- Section 2 demonstrates an empirical analysis of the nopreneurial model in the 21st Century. development trajectory. Section 3 analyses the trans- fi A total of ve NEWater factories are in operation in formation of imported technology into indigenous tech- Singapore (Table 1). The Bedok and Kranji NEWater facto- nology development. Section 4 elucidates the co- ries were commissioned in 2003. A year later, the Seletar evolutionary acclimatization dynamism based on export NEWater factory was commissioned. These NEWater acceleration. Section 5 briefly summarizes our new find- factories are owned, operated and maintained by the ings, policy implications and future research. government. The NEWater factories commissioned after 2004, such as the Ulu Pandan NEWater factory (commis- 2. NEWater development trajectory2 sioned in 2007) and the Changi NEWater factory (commissioned in 2010) are owned, operated and main- 2.1. NEWater dependency tained by the private sector for a specific duration, typically fi between twenty and twenty- ve years. Table 2 demonstrates NEWater (NW) dependency in NEWater demonstrates leading-edge technologies Singapore over the period 2003–2011. The figures match developed through a comprehensive innovation system. A the target as released by the Ministry of the Environment critical element of this innovation system is internalizing and Water Resources3 that NEWater is targeted to meet fi knowledge from leading global rms. As a result of this 30% of the nation’s water needs by 2011. Table 3 identifies system of innovation, NEWater can inspire emerging the diffusion trajectory representing the trend in NEW- economies in Asia, the Middle East and Africa by exporting ater dependency toward 2011 using a logistic growth the advanced NEWater systems which in turn further function accelerates innovation and industry emergence leading to a sophisticated co-evolutionary dynamism that is scalable p pðtÞ¼ and transferable. 1 þ eÀatþb While this co-evolutionary phenomenon provides new where pðtÞ: NEWater dependency; p: its upper limit; t: insights to innovation and industry emergence, particularly time trend; and a, b: coefficients. in inducing the businesses at the bottom of the pyramid Fig. 1 compares the actual and estimated trend in (BOP) [6], no previous research has attempted to elucidate, NEWater dependency in Singapore over the period 2003– conceptualize and operationalize this unique dynamism in 2011. By incorporating the quarterly trend (t ) and quarterly the context of Singapore. In this research, the development q total of used water into the estimated function, the quar- trajectory of NEWater in Singapore was analyzed along terly trajectory (pðt Þ), and the quarterly NEWater with the steps described above and technology leapfrog- q production (based on capacity of production) over the ging was postulated [7]. While the dynamism enabling its period 2003–2009 were estimated. Table 1 NEWater factories in Singapore. 2.2. Trend in learning Name of NEWater Plant capacity Year commissioned factory (mgd) Using the quarterly production figures of NEWater (NW) Bedok 18 2003 and the trend in the fixed price of NEWater (pn), (deflated Kranji 17 2003 Seletar 5 2004 Ulu Pandan 32 2007 2 Changi 50 2010 Numerical analyses of this section largely depends on [7]. 3 Sum of Combined 122 mgd Water for All, Ministry of the Environment and Water Resources Capacity website. Last assessed on 11 Feb 2011. http://app.mewr.gov.sg/web/ Contents/Contents.aspx?ContId¼960. 202 M.Y.C. Chew et al. / Technology in Society 33 (2011) 200–211 Table 3 (t) 2008Q2 Estimated trajectory for NEWater dependency in Singapore (2003–2011). 0.09 Coefficient Estimated value t-value adj. R2 0.08 p 31.0 26.7 0.994 a 0.76 11.0 0.07 b 3.77 13.5 0.06 by Manufacturing Product Price Index for manufactured 0.05 goods), the dynamic learning coefficient (pðtÞ) was esti- 0.04 t mated using the following equation: 2003 2004 2005 2006 2007 2008 2009 X ÀlðtÞ Fig. 2. Trend in learning coefficient (2003–2009). Pn ¼ A NW P fi where A: coef cient; NW : cumulative stock of NEWater firms to work alongside established players and in the lð Þ fi production; t : dynamic learning coef cient; and t: time process to pick up the know-how of the trade. Learning of trend. the know-how with regards to NEWater factory construc- fi lð Þ The dynamic learning coef cient t can be depicted by tion, design, operation and maintenance reached its peak the following equation as a function of time trend t [22]: after the construction of the Ulu Pandan NEWater factory in Xn À Á 2007.
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