SPEECH BY DR KOH POH KOON, MINISTER OF STATE, MINISTRY OF NATIONAL DEVELOPMENT & MINISTRY OF TRADE AND INDUSTRY AT THE INDUSTRIE 4.0 SYMPOSIUM HELD AT MANDARIN ORCHARD ON TUESDAY, 4 APRIL 2017, 9:20AM
Dr Christian Storost, Head, Foreign Trade Promotion, German Federal Ministry of Economic Affairs and Energy
Dr Steffan Koch, Acting Head of Mission, German Embassy in Singapore
Dr Tim Philippi, Executive Director, Singaporean-German Chamber of Industry and Commerce
Dr Markus Waechter, Managing Director, German Institute of Science and Technology – TUM Asia
Ms Jeanne Liew, Principal and CEO, Nanyang Polytechnic
Distinguished Guests
Ladies and Gentlemen
Introduction
1. Good morning. Thank you for the invitation to participate in the Industrie 4.0 Symposium.
2. Singapore and Germany enjoy strong bilateral ties, and the strength of our cooperation spans areas such as defence, research and education. It is in the economic sphere where we enjoy particularly close relations and cooperation. There are German companies like Siemens, Bosch and Pepperl+Fuchs who are here today, but have actually also accompanied Singapore through multiple economic development cycles. Siemens and Bosch have been present in Singapore since 1908 and 1923 respectively. Today, Singapore and Germany share commonalities as highly industrialised and export-oriented countries that are committed to keeping manufacturing as key elements of our economies.
Positioning our Manufacturing Sector for the Future
3. The manufacturing sector contributes about 20 per cent of Singapore’s nominal Gross Domestic Product (GDP). In February this year, the Committee on the Future Economy (CFE) recommended to the Singapore Government that we retain manufacturing at 20 per cent of our GDP so as to continue anchoring high-value and complex activities in Singapore. This should be done by encouraging the growth of areas that sit at the confluence of high-tech manufacturing and high-end services. Some examples included advanced manufacturing that is enabled by the Industrial Internet of Things (IIoT).
4. The Government accepted the CFE’s recommendation as part of our objective to create good jobs for our people and to build a diversified and resilient economy. Based on MTI estimates, a S$1 billion increase in manufacturing value-added through final demand will generate about S$340 million of value-added and 2,500 jobs in the rest of the economy, including business services and wholesale trade.
5. However, manufacturing is a globalised and highly competitive sector that is fundamentally changing as part of the Industrie 4.0 phenomenon. Increasingly, the difference between advanced and traditional manufacturing is the digitalisation and automation of manufacturing operations and workflow processes. It is this difference that will help our manufacturing industries stay ahead even as emerging economies seek to compete in our traditional fields of expertise.
Industry Transformation
6. To position Singapore’s economy for the future and to keep our manufacturing industries competitive, Industry Transformation Maps (ITMs) are being developed for 23 industries across the economy, of which, 6 will be tailored for manufacturing industries such as Electronics, Aerospace and Energy & Chemicals. As an example, we launched a Precision Engineering ITM in October last year. Under this ITM, EDB has plans to groom Precision Engineering companies that are ready to embark on transformative projects to digitalise their factory operations as ‘digital champions’. To help the Precision Engineering industry shift towards higher value-added activities, EDB will also grow complementary sectors such as additive manufacturing, sensors, advanced materials, robotics and lasers & optics.
7. We plan to launch the remaining ITMs over the next few months. Where relevant, the ITMs will lay out plans to help their industries and companies adopt Industrie 4.0 initiatives. Our manufacturing companies in particular, need to deeply understand Industrie 4.0 and how it will impact their businesses and workers. Only then will they be ready and able to leverage Industrie 4.0 technology and strategies. They must also start building up relevant capabilities and training their workers to take on redesigned jobs. Done well, the impact of Industrie 4.0 can be tremendous. A Boston Consulting Group study commissioned by EDB indicates that the average salary of new jobs created by Industrie 4.0 adoption, such as robot coordinators and data scientists, can pay up to 50% higher than traditional manufacturing jobs. Low skilled jobs will also increasingly be replaced by higher skilled higher paying jobs.
8. Hence, I was pleased when EDB supported Siemens in opening the Siemens Digital Manufacturing Design Consultancy in September last year. The consultancy aims to assist companies in assessing the current state of their facilities, and thereafter structure an Industrie 4.0 roadmap to digitalise their factories. This serves a critical market gap in helping companies access Industrie 4.0 strategies and was the first of its kind in Singapore. Siemens’ decision to establish their manufacturing consultancy business in Singapore was also testament to the benefits that Singapore offers as a lab for test-bedding Industrie 4.0 strategies in a cosmopolitan consumer base with diverse preferences.
9. Over the last two years, Singapore has been actively building up our advanced manufacturing ecosystem by attracting leading technology providers, including German companies like Mann+Hummel, Tuv Sud and SAP to develop their latest solutions out of Singapore. Singapore will continue helping our manufacturing industries transform by encouraging lead adoption of technology. In fact, I co-chair a Manufacturing Sub-committee comprising representatives from government agencies, manufacturers, Institutes of Higher Learning, manufacturing trade associations and unions. The sub-committee will take a deeper look into the development and implementation of the manufacturing ITMs, which could include tracking the take-up rates of initiatives like digitalisation and additive manufacturing. The sub-committee will also track relevant outcomes such as the improvement of labour productivity, and look beyond each manufacturing industry by exploring synergies across the manufacturing sector.
Memorandum of Understanding
10. Cooperation between Singapore and Germany on education is another pillar of our relationship. Singapore’s Institutes of Higher Learning have signed Memoranda of Understanding (MoU) with over 30 German institutions and companies for exchanges of students and academic staff, joint research collaborations, internships and information sharing. I am pleased to be here today to witness the MoU that will be signed between Nanyang Polytechnic and TUM Asia. As both institutions work towards developing Industrie 4.0 strategies in engineering and technology, the MoU will allow for collaborative efforts in the areas of professional training and research. It will also provide valuable opportunities for the exchange of staff and students, facilitating the development of new capabilities for the future of manufacturing.
Conclusion
11. In closing, I would like to extend my thanks to the Singaporean-German Chamber of Industry and Commerce for their kind invitation. I am confident that our joint efforts to propagate Industrie 4.0 initiatives will position our economies well for the future. I wish you all very fruitful discussions and a pleasant day ahead. Thank you.