Speech by Minister Chan Chun Sing at Enterprise Singapore Year-In-Review 2020

1. Good morning members of the media. Approximately two weeks ago, I spoke to you at the Economic Development Board’s Year-in-Review where I shared about the investment outlook, the role of frontier global companies in Singapore and our key economic strategies for this year.

2. This morning, at Enterprise Singapore’s Year-in-Review, I would like to bring the focus back to our local enterprises and share how we have been helping them not only to survive, but to grow and thrive and be in a position where they are able to seize new opportunities in the new economy. 

3. While the difficult challenges last year required ESG to focus on helping local companies to survive the crisis, it has not slowed ESG’s resolve to help our companies transform and seize opportunities in new markets and through the offering of new products and services and the development of new processes. 

4. First, I want to commend the team at ESG for a job well done in an unprecedented year. Their work may go under the radar most of the time and I would like to take the opportunity today to highlight some of the important roles ESG has played behind the scenes last year.

a. Till today, there are still many safe distancing operations in place. In fact, there are more than 750 safe distancing ambassadors that have been working round the clock to ensure that our businesses can continue to operate efficiently and effectively. They also established a call centre overnight in a short period during the circuit breaker and post circuit breaker period. The centre handled more than 100,000 calls to help our businesses stabilise their operations and find new ways to overcome supply chain disruptions. There were also many efforts by ESG, together with other economic agencies, to help our companies secure new supplies and establish new supply lines. 

b. The team went above and beyond its original areas of responsibility and tapped on global networks to support the national fight against COVID-19 and ensure that Singaporeans have access to food items and other essential supplies. That job has not stopped, even today. ESG and the respective agencies play a critical role in ensuring the continuing supply of essentials for the local population – as while things have stabilised, there are still many uncertainties and the stability of global supply chains is still being challenged. 

c. Even while working on new COVID-related measures, the ESG team did not slow down on its core mission to push for business transformation. In fact, they rolled out many measures to support businesses and encourage transformation during this challenging period. 

Covid-related Measures 

5. We are by now all familiar with the economic impact that the pandemic has had on our economy. Advance estimates indicate that Singapore’s economy contracted by 5.8% in 2020, the largest contraction recorded since our independence. The circuit breaker measures, put in place to stem community transmission, had a significant impact on all our industries. 

6. We are aware that many of our enterprises were very badly affected in a multitude of ways and we quickly put in place the necessary measures to support our businesses through this period. 

7. At the start of the pandemic, our immediate priority was to help our businesses survive the immediate challenges and save as many jobs as possible. 

8. ESG quickly introduced a suite of measures to sustain businesses and save jobs. 

a. ESG worked with participating financial institutions to disburse 32,000 loans valued at S$18 billion to 21,000 enterprises to help them with their cashflow challenges;  

b. And supported more than 23,000 enterprises in adapting to challenges that arose from the Covid-19 situation. These include (i) The expanded Productivity Solutions Grant, which supported Covid-related solutions for remote working and (ii) The Food Delivery Booster Package and E-Commerce Booster Package which helped F&B establishments and retailers continue operations amidst the pandemic. 

9. Over the last year, I have met with many business leaders – from global companies and local companies alike. Every time I meet them, I will do an informal poll to ask them when they think their business will go back to pre-Covid levels.

10. When I first started doing this poll around the middle of last year, the majority of them would indicate that they expect things to go back to the way they were in a number of years. But over the last few months, I have seen more business leaders indicating that we will never go back to the pre-COVID days. They understand that things have changed. This is an important distinction as it determines the steps that our business will take going forward.

11. If our business leaders believe that things will eventually revert to the way they were, they will be less inclined to make the necessary structural changes to their business models, operations and even human resource policies.

12. But for the increasing number of business leaders who realise that there is no return to the pre-COVID days, they will double down on their transformation efforts to ensure that they remain resilient and competitive in a changed economy.

13. I am glad to see more enterprises and businesses leaders falling into the latter category. This is evidenced by the many enterprises that took advantage of the capability upgrading and transformation programmes that ESG enhanced last year.

14. In 2020, ESG supported more than 15,000 enterprises through a range of  financial and non-financial assistance measures. These include  project and market facilitation and capability development schemes such as the Enterprise Development Grant, Productivity Solutions Grant and Market Readiness Assistance Grant. In total,  we saw a 50% increase in the number of enterprises supported under these schemes, which is significant.

Economic Strategies

15. At the EDB YIR, I highlighted four key strategies to drive economic recovery and position ourselves for continued growth. Today, let me go into a bit of detail on how these strategies are relevant to our local enterprises and the support that we will provide in these areas.

16. First, strengthening our position as a critical node in the global value chain. In addition to bringing in frontier global companies that can partner our local enterprises to grow new capabilities and provide valuable exposure, we must also build our own strong core of local companies that can compete globally in niche areas.

17. For example, I visited AEM a few months ago. AEM is a local company in the semiconductor equipment space that started off 30 years ago as an automation company but has since grown into a leader in testing and handling solutions. Today, they serve some of the world’s largest global semiconductor manufacturers and are expected to continue growing - with revenue expectations recently adjusted upwards to between S$480 - S$500 million.

18. AEM is an example of the ambition we have for our local companies. Through programmes such as Scale-up SG, which AEM is a part of, we want to develop a pool of global champions that will anchor Singapore’s future growth, generate good jobs for Singaporeans, and create greater value for our economy.

19. Our commitment to our companies is this - as long as they have the ambition, aptitude and attitude to pursue growth, we will find the necessary resources to support them.

20. Second, forging new trade rules in new growth areas. The new Digital Economy Agreements (DEAs) that we have signed with countries such as Australia and separately with Chile and New Zealand, present new opportunities for our companies.

21. In addition to facilitating trade and business, DEAs also make it easier for our businesses to conduct their trade activities digitally by increasing their operational efficiency while lowering costs. Most importantly, it allows them to access new markets that trancsend the constraints and size of our local markets. I urge our businesses to tap on these agreements and seize growth opportunities in new markets.

22. Covid-19 has also emphasised the limitations of Singapore’s small domestic market and underscored the importance of internationalisation efforts. While internationalisation activities slowed in 2020, we maintained a positive momentum and supported 1,600 enterprises in  their efforts to venture overseas, notwithstanding COVID-19.

23. Going into 2021, ESG will continue to support our companies to seize new opportunities in key markets and deepen partnerships with key economic partners through initiatives such as SMEs Grow Digital, the expanded Market Readiness Assistance Grant and GlobalConnect@SBF.

24. Third, pursuing an innovation-led and sustainable economy. The creation of new products and services is not confined to larger companies alone. We want to spur innovation among our local companies regardless of size and support the growth of our startup ecosystem.

25. We will build the capabilities of our startups to contribute to innovation efforts and offer relevant solutions to enterprises as they transform by:

a. Catalysing the formation of new innovative startups through the enhanced Startup SG Founder programme.

b. Encouraging more private sector investments in deep tech startups through Startup SG Equity.

c. Boosting apprenticeship initiatives through the I&E Fellowship Programme and Global Ready Talent Programme.

d. Tapping key global innovation nodes through the Global Innovation Alliance.

26. In 2020, we generated demand for innovation through open calls such as the National Innovation Challenges and technology matching sessions. These help to identify opportunities available in wide-ranging growth areas such as trade and connectivity, healthcare, sustainability and energy. We will continue to look for opportunities to partner demand drivers from both the public and private sectors.

27. We also recognise the potential for our companies in the green economy and will support them in areas including developing sustainability-related standards such as carbon verification, growing capabilities in sustainability and accessing new business opportunities in this space.

28. Last but not least, we will double down on transformation efforts to help our companies and workers stay resilient and competitive in a Covid-world. In many ways, this is the core mission of ESG and is reflected in the support provided by ESG over the last year. 

29. We have adopted a targeted approach towards helping our local companies at different stages of development to grow to their fullest potential. For companies with the potential and ambition to become local or even regional and global champions, we will develop targeted pathways to help them grow through programmes like Scale-up SG and Enterprise Leadership for Transformation. By enabling more local companies to become leaders in their respective fields, we are also creating better prospects for our workers who will benefit from a wider variety of job opportunitiesand prospects for higher wages.

30. We also have a  suite of enterprise development programmes to help companies to boost their capability and capacity. For example, we have initiatives to help companies tap new growth markets through internationalisation or product innovation. Through these efforts, we hope to help all companies reach their growth potential and differentiate themselves from the competition.

31. We will also continue to partner the Trade Associations and Chambers to provide industry-specific development programmes for enterprises in their respective domains We will continue to provide enterprises with easy to access solutions that they can use to level up and grow. We will also ensure that they are able to easily access the support they require through key touchpoints such as the TACs, GoBusiness Gov Assist, Heartland Enterprise Centre and business advisors in our SME Centres.

Conclusion

32. It has been a tumultuous year for everyone in the world. We are grateful for the patience and understanding our companies have shown during this difficult period, as they make the necessary adjustments to continue to serve local, regional and global markets in this difficult environment. 

33. Although we are hopeful that the global economy will see signs of recovery in the second half of this year, the economic situation remains extremely uncertain given the recurring waves of infection that continue unabated in many countries, ongoing geopolitical tensions and the shifts in production and supply chains that will continue through and post-COVID.

34. While the Government has responded swiftly and decisively to support our businesses and workers through the course of the pandemic, our resources are finite and we must use them in a judicious manner.

35. This means that while we will continue to support our businesses, we will not be able to do so indiscriminately. Our support will increasingly become more focused and targeted on helping businesses build new capabilities, grow and seize new opportunities and penetrate new markets.This will provide the best outcomes not only for our businesses and our workers but the overall economy and all Singaporeans. 

36. The weight of our efforts going forward must increasingly be more targeted and shift towards helping our enterprises seize new opportunities in new markets, through new products and services. It is not sufficient to play defensive by trying to preserve existing enterprises and current jobs. It is even more important for us to create new opportunities for our enterprises and job opportunities for our workers. The faster we help our companies and workers seize the new opportunities, the better our prospects for our companies and wage growth for our people.

37. Thank you and I will now be happy to take some questions from the media.