SPEECH BY MR SAM TAN, SENIOR PARLIAMENTARY SECRETARY, MINISTRY OF
TRADE AND INDUSTRY & MINISTRY OF INFORMATION, COMMUNICATIONS
AND THE ARTS AT THE 3RD ENTERPRISE DEVELOPMENT CENTRE (EDC)
CONFERENCE, NTUC AUDITORIUM, 22 MARCH 2011 AT 9.15
AM
Mr Lawrence Leow, President of the
Association of Small and Medium
Enterprises
Distinguished Guests
Ladies and Gentlemen
Good Morning
I am pleased to join you today for the third Enterprise Development
Centre (or EDC)
Conference.
Economic Outlook -Opportunities and
Risks
Last year, when I spoke at this conference, the world was just
beginning its recovery from a massive global economic downturn.
Since then the recovery has picked up steam especially in Asia. The
Singapore economy has also rebounded with an impressive 14.5% GDP
growth in 2010.We will continue to benefit from the continuing
momentum of global economic recovery. This year, the economy is
expected to post a healthy growth of between 4% and 6% in 2011.The
crisis measures that we undertook to build resilience and maintain
our competitive edge has also stood us
well.
Going forward, the external environment will present us with both
opportunities and risks. With Asia becoming a key driver of global
economic growth, opportunities abound for businesses keen to
capitalise on the emerging markets of Asia. At the same time, we
will need to be watchful and prepared for bumps in the road ahead.
Inflation is a growing concern not only in Singapore but worldwide.
Disruptions to food supplies due to bad weather, and strong demand
from rapidly growing economies are some of the factors that are
pushing global commodity prices up. The ongoing unrest in Middle
East has also driven up oil prices. SMEs are thus facing the
challenge of rising costs.Another emerging source of concern is the
disruption to Japan’s economic activities in the immediate
aftermath of the Sendai earthquake. This could have some negative
impact on trade flows between Japan and Singapore in the near term,
although the full impact is uncertain as the situation in Japan
remains
fluid.
At the recent Budget, the government announced measures that will
help companies become globally competitive and also provide support
for companies to cope with rising costs.In particular, the
government recognises SMEs' concerns on foreign worker levy
increases and its immediate impact on business costs. I would like
to assure SMEs that there is government assistance to help them
raise productivity and reduce reliance on foreign workers. The
first thing SMEs can do is to take advantage of the Productivity
and Innovation Credit (PIC) scheme. PIC offers a 400% tax deduction
for expenditures on each of the six qualifying items, including
training, automation and R&D. Cash-strapped SMEs also have the
option of converting their expenditures into a non-taxable cash
payout, capped at $30,000
annually.
Besides PIC, I would also urge SMEs to apply for other government
assistance programmes to help them increase productivity and build
long term competitiveness. Officers from SPRING Singapore and the
Enterprise Development Centres present here can advise and assist
you.
Potential for higher
Productivity
The number of SMEs in Singapore with sales turnover below $10
million is about 145,000, comprising 95% of the total number of
enterprises. They employ 40% of total workforce [1].However, the
value-add (VA) contribution by this SME cohort to our economy is
only 16% and overall productivity is about half that of the
national average.There is therefore much potential for our SMEs to
grow even more by achieving higher productivity and in turn,
strengthening their long-term competitiveness. In the last year,
the government has introduced many measures to help our SMEs
improve their productivity, let me give an update on some of these
initiatives.
Dedicated Productivity@Work
Portal
As part of a national effort to improve productivity, the
SME-Productivity Roadmap, or SME-PRO in short, was introduced last
year by SPRING Singapore and WDA. It aims to help SMEs take a
systematic approach to tackle the root causes of productivity
problems.I will now highlight two key initiatives under SME-PRO
which I would like to urge SMEs who have yet to embark upon,
consider doing so as soon as
possible.
The first is the Productivity@Work website by SPRING
Singapore.Through this self-help portal, SMEs can learn
productivity concepts, access tools to diagnose their productivity
performance, and leverage on resources and case studies for advice
on productivity.The website has proven to be a popular resource
portal. To-date, close to 45,000 unique visitors have used the
website.
New Interactive IMPACT Assessment
Tool
Productivity enhancement for a company starts with measuring its
existing performance, diagnosing the gaps and doing a stock take of
the current situation.To help our SMEs do this quickly and easily,
I am pleased to share that a new online interactive assessment tool
is now available at the Productivity@Work
website.
The IMPACT Assessment Tool enables enterprises to pinpoint areas of
strengths and weaknesses in productivity management, and the key
levers to address to improve productivity.Furthermore, the company
will receive a customised report with useful information to help it
prioritise and tackle key deficiencies first.As the bank of cases
starts to build up, comparative benchmarks will be developed for
companies to take reference from.SPRING is aiming is to have 1,000
enterprises sign up and utilise the assessment tool
annually.
Productivity Management Programme
@EDCs
The second initiative under SME-PRO is the Productivity Management
Programme, or PMP which was introduced in October last year.
Spearheaded by our Enterprise Development Centres (EDCs), the PMP
adopts a hands-on approach, providing face-to-face advice to SMEs
to diagnose productivity gaps, educating them on the appropriate
tools and techniques to improve productivity, and disseminating the
relevant government schemes which they could use.I am pleased to
note that within five months of PMP’s launch, the EDCs have reached
out to about 1,000 SMEs and assisted 600 of
them.
Let me cite one such case where a company benefitted from the PMP.
Warburg Vending Pte Ltd, a provider of food and beverage vending
solutions, wanted to develop an automated system that minimises
human errors.With guidance and assistance from the EDC@SMa, Warburg
automated its coin sorting and packing system, and computerised its
data collection and inventory management. This resulted in a 63%
improvement in turnaround time for coins exchanged, from eight
hours to three hours.The implementation of a scanning and
bar-coding system for its warehouse also eliminated manual counting
and inventory recording, saving an estimated 10 hours, which is an
83% improvement in
efficiency.
New On-line Services in
EnterpriseOne
Enhancements are also being made to existing initiatives to provide
even more support for SMEs. The EnterpriseOne website for example,
currently provides a single point of access to a whole range of
comprehensive information on assistance programmes offered by the
government, business chambers and industry associations. Some
90,000 unique visitors have tapped on EnterpriseOne so far, and the
site has an average of one million page views per
month.
I am happy to announce that two new e-services will be available on
EnterpriseOne.The first is the GeBIZ Alerts service.GeBIZ is the
government’s procurement portal.With the alert service, a company
can identify its area of interest and receive business leads posted
on GeBIZ via its subscriber mailbox. The government will also
benefit through more competitive
bids.
The second addition is BizMap, which will help businesses explore
premises available for rent or lease from agencies such as SLA
(Singapore Land Authority) and HDB (Housing and Development
Board).Businesses can search for properties based on location,
rental rates, size and property types. The search results will then
be displayed in an interactive map.With this, businesses can now
conveniently search and compare the available rent and lease
options, and hence make better informed business decisions on
suitable premises. It is estimated that more than 30,000 businesses
would benefit from these two new
e-services.
Re-Definition of “SME”
To ensure our SMEs continue to benefit from the schemes, I am
pleased to announce a new SME definition based on sales turnover
and employment. With effect from 1 April 2011, an SME will be
defined either as an enterprise with an annual sales turnover under
$100 million, or as an enterprise with an employment size below
200.This new definition will apply to all enterprises across all
sectors.
This re-definition is based on the recognition that quite a number
of our SMEs today are asset-light. By using sales turnover instead
of fixed asset investment as a criterion, the revised definition
better reflects the changing profile of our SMEs. It seeks to
ensure that small businesses which meet the new definition of
'small' either by sales or staff strength, will be able to qualify
for support, regardless of their fixed assets. The new definition
is also in line with international benchmarks in the United States
and the European Union.
Conclusion
I would like to conclude by thanking the five EDCs for organising
this conference. The theme for today’s conference is very apt. I
urge all our local enterprises to make full use of the various
measures that the government has put in place to build up your
capabilities for long term growth, expansion and sustained
competitiveness. On this note, I wish all of you a rewarding
morning.
Thank you
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[1] As a reference, in 2010 there are about 154,000 SMEs in
Singapore. They make up 99% of enterprises, employ 6 in 10 workers
and contribute nearly half of total enterprises’ value-added in the
economy.