SBF Chairman Mr Teo Siong Seng,
SBF Foundation Chairman Mrs Theresa Foo,
Ladies and gentlemen,
1. Let me begin by congratulating the Singapore Business Federation (SBF) on the official opening of the SBF Centre and SBF Foundation Office.
SBF plays a key role in preparing Singapore for the future
2. As Singapore’s apex business platform with over 24,000 members, SBF is an important bridge between businesses, unions and the Government. Given its vantage, SBF is also uniquely positioned to contribute to issues of national significance.
3. For example, while economic and technological trends create new opportunities, the dividends of growth are not always evenly distributed. By enhancing the employability of disadvantaged segments of society and promoting corporate social responsibility, SBF and the SBF Foundation play an important role in ensuring that Singapore remains an inclusive economy and society.
Internationalisation, trade facilitation and building digital capabilities
4. I welcome SBF’s timely initiative to review its positioning and strategies. In particular, it is apt that SBF is focused on a larger international role. The Committee on the Future Economy (CFE) has emphasised that our enterprises must venture overseas for new growth opportunities. SBF’s international networks already open doors for our businesses. Looking ahead, these networks must be broadened to reach markets in emerging cities, provinces and economies. This is especially important to help our SMEs navigate unfamiliar overseas markets.
5. The Government and SBF play complementary roles in this internationalisation effort. The Government strengthens cooperation with other countries through free trade agreements and regional economic integration efforts. SBF, through its networks, can help more Singapore-based enterprises benefit from these treaties, as well as government programmes that support expansion overseas.
6. SBF can also spearhead projects to encourage the adoption of digital technologies and enhance the capabilities of our enterprises and industries. SBF, with its partner Trade Associations and Chambers (TACs), can help to develop and implement such projects at scale in order to maximise the impact.
The Government is also transforming to serve businesses and industry better
7. With the changes in the business environment and shifts in technology, we have urged our companies and industries to transform themselves in order to succeed in the future economy. This message of transformation applies equally to Government agencies. As industry trends and the needs of businesses evolve, so too must government policies and regulations. Government agencies must be prepared to adapt their programmes and, when necessary, restructure themselves to better serve Singaporeans and our companies.
8. We have seen some recent examples of this ethos which is ingrained in our Government system.
(a) In response to the convergence and the opportunities that arise from the convergence of IT, communications and media, the Info-communications Development Authority (IDA) and the Media Development Authority (MDA) were re-structured to form the Info-Communications Media Development Authority (IMDA).
(b) The JTC Act Amendment Bill tabled by MTI will transfer HDB’s industrial properties to JTC, thereby creating a single agency for all industrial land and space needs, to better serve industry.
9. We need a similar re-think of the way our economic agencies work with local enterprises. Today, we do this mainly through SPRING Singapore and International Enterprise (IE) Singapore.
(a) SPRING focuses on building the capabilities of startups and SMEs. SPRING also develops standards for Singapore products and services, helping to build our reputation for trust and quality. In addition, SPRING is responsible for consumer protection.
(b) IE aims to develop Singapore as the preferred international trading hub from which companies expand overseas. IE also provides tailored programmes and in-market support to help Singapore-based enterprises export and internationalise.
10. SPRING and IE have developed strong networks and deep capabilities in their respective functions. IE has offices in over 35 cities, and in the first half of 2017 alone, helped more than 24,000 enterprises with overseas expansion. Over the same period, SPRING has helped to build capabilities in SMEs through projects that are expected to generate $4 billion in value-add. Both agencies are doing good work and their efforts have had a material impact. One measure is productivity, which grew by 1% in 2016, and even more strongly in the first half of this year, at 2.8%.
11. But, we are in a new phase of economic development. With tighter domestic constraints, external demand will be an even more important driver of growth. To tap on these opportunities, our companies must be able to respond nimbly to political and economic shifts, shorter technology cycles, and business model disruptions. They must have extensive networks internationally, superior capabilities, innovative products and strong brands to compete in this globalised digital economy. As emphasised by the CFE, the capacity to innovate, harness new technologies, scale up and internationalise are deeply intertwined for all companies regardless of their scale or stage of development.
12. Hence, to better support industry and enterprises in this dynamic economic environment, we will build on the strengths of SPRING and IE by merging them to form a new government agency – Enterprise Singapore. Enterprise Singapore will integrate its knowledge of industries with its network of local and overseas partners, to comprehensively support our enterprises in their efforts to innovate and internationalise. In arriving at this decision, we have carefully studied the feedback gathered from the CFE’s extensive industry consultations, as well as the call from various parties, including SBF and the SME Committee, for a consolidated government agency to champion the growth and development of SMEs.
(a) Through Enterprise Singapore, startups will not only benefit from the capability development support that SPRING has been providing, but will also be plugged into IE’s international networks, especially in fast growing regional markets. In the digital age, where speed and scale are critical, this will put our startups in a much better position to succeed.
(b) SMEs will continue to receive assistance from Enterprise Singapore to build innovation capacity and strengthen competitiveness (programmes that are currently under SPRING). Enterprise Singapore will also enable SMEs to scale up and grow their international footprint through its wide network of overseas centres (presently under IE). For example, Enterprise Singapore can not only support a manufacturing company with a grant to augment its production capacity but also concurrently work with them to develop an export marketing and channel strategy for its increased output.
(c) Large Local Enterprises can work with Enterprise Singapore to strengthen collaboration within their industry clusters and deepen the capabilities of the SMEs that support them. These partnerships can be extended to jointly exploring opportunities in overseas markets.
(d) With a holistic approach to meet the needs of companies, Enterprise Singapore will be better able to work with industry, TACs, educational institutions and unions to create more good job opportunities for Singaporeans, and help Singaporeans in the workforce develop the essential skillsets and exposure to global markets.
(e) Finally, as we continue to drive industry transformation, this merger will enable us to respond more quickly and flexibly to changes in the economic environment, and position our industries for new growth areas.
13. Enterprise Singapore and the Economic Development Board (EDB) will form two critical and complementary economic pillars that will help formulate and implement strategies for the development of industry clusters and enterprises. Enterprise Singapore will also work with EDB to strengthen collaboration between multinational corporations, SMEs and innovative startups, to enhance the competitiveness of Singapore’s economy, and our position as a global trading hub.
14. As part of this restructuring, the Competition Commission of Singapore (CCS) will take over SPRING’s oversight of consumer protection. This will reinforce CCS’s focus on ensuring that our markets function well, with robust and fair market practices that benefit both business and consumers, while Enterprise Singapore focuses on enterprise development.
15. Given the scale, complexity and importance of the mission, and transition in particular, we will appoint Mr Png Cheong Boon, Second Permanent Secretary for MTI, as the Chief Executive Officer (Designate) for Enterprise Singapore. Cheong Boon has served with distinction in various economic agencies, including as the Chief Executive of Jurong Town Corporation and SPRING Singapore. His industry knowledge and networks will be valuable to the work of Enterprise Singapore.
16. These changes to the organisation of our economic agencies will take effect in the second quarter of 2018. In the meantime, IE and SPRING will continue with their programmes to serve the business community, and implement the CFE recommendations for the transformation of Singapore enterprises and industry. We will ensure that there is no disruption to the support given to our SMEs, and that the core competencies of IE and SPRING Singapore are preserved and built on by Enterprise Singapore. A smooth transition is our utmost priority.
Conclusion
17. With the formation of Enterprise Singapore, we will be better positioned with one consolidated agency to build strong local enterprises and create exciting new jobs for Singaporeans in this new phase of our economic development. However, no government agency can address the challenges of the future economy on its own.
18. The future economy calls for transformation at all levels – individual, enterprise, industry and economy. Economic transformation is a national effort that requires the active support of all stakeholders including SBF and the other TACs, the unions as well as educational institutions. We look forward to working closely with all our partners as we build a vibrant economic future for Singapore.
19. Thank you.