Digital Transformation as a Catalyst for Innovation in Singaporean Startups: Econometric Evidence from Patent Outputs and R&D Investment

Abstract

This study examines the impact of digital transformation on innovation in Singaporean startups, using patent applications and R&D expenditure as quantitative indicators. An Autoregressive Distributed Lag (ARDL) model is applied to time-series data (2015–2025) to capture both short- and long-run dynamics. The results reveal a significant long-run elasticity of 0.78 between R&D investment and patent output, indicating efficient conversion of digital inputs into innovation. Government grants and venture capital also exert positive effects, with elasticities of 0.35 and 0.42, respectively. The implementation of the RIE2025 innovation strategy is associated with a 28% increase in patenting activity. The error-correction term suggests rapid adjustment, correcting 52% of disequilibria annually. These findings highlight the effectiveness of Singapore’s integrated innovation ecosystem and provide policy-relevant insights for fostering digital-driven entrepreneurship.