An almost fully automated baggage transfer system might be piloted at an airport terminal here in as little as two years, which could cut the number of staff required for the process by up to half.

Robotic arms would take the place of baggage handlers to load luggage onto autonomous driverless vehicles, which would then transport the bags to the aircraft.

A few ground handlers would take over for the last 50m to manually load the luggage onto the aircraft, but the crew would be substantially leaner.

This would make a difference in the labour-intensive airport operations sector, where labour costs form up to 70 per cent of total operational costs.

This innovation is likely to be the first to come out of a new $53 million laboratory, launched jointly by the Nanyang Technological University and ST Engineering yesterday.

Named the ST Engineering-NTU Corporate Laboratory, its two main research areas will be in airport precision and airside technology - which includes baggage transfer systems, aerobridges and aircraft tow trucks - and better intelligence support for crisis management.

Professor Lam Khin Yong, NTU's chief of staff and vice-president of research, said it was important for research work to translate into innovations that would be commercially useful.

He said the collaboration would help advance this goal by leveraging on ST Engineering's knowledge of the industry.

"ST Engineering will work very closely with NTU professors and PhD students to ensure that, even as (they) undertake the basic research, it will be steered towards commercial adoption," he said.

The laboratory will be funded by NTU, ST Engineering and the National Research Foundation (NRF), under its Corporate Laboratory@University Scheme, which supports the setting up of key laboratories through public-private partnerships.

When running at full capacity, the laboratory will have more than 100 researchers and staff, including 37 PhD students from NTU.

Up to 30 engineers will be seconded from ST Engineering. The aim is to have at least 10 technologies successfully commercialised within five years.

Speaking at the launch, Deputy Prime Minister Teo Chee Hean, who is also NRF chairman, noted that many countries including Singapore are facing the challenges of an ageing population and a shrinking workforce.

Hence, technology is increasingly being tapped to make up for labour shortfalls. "Developing intelligent systems and robotics solutions thus serves a very real need for both the economy and society," he said.