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Speech by SMS Koh Poh Koon at the Singapore Networking Event at Hannover Messe

Speech by SMS Koh Poh Koon at the Singapore Networking Event at Hannover Messe

Distinguished Guests, 

Ladies and Gentlemen,
 
Introduction

1. Good afternoon. Thank you for joining us here today at this networking event to discuss the “Growth Opportunities with Industry 4.0 in Southeast Asia”. 
 
ASEAN presents huge growth opportunities for companies in Industry 4.0 

2. Industry 4.0 is upending traditional business models and work flows, from how we design the shop floor and what equipment we purchase, how and where we build our next products, who we hire and what skills we equip them with, to how we control for quality, how we gather data and what we do before, during and post-production. Yet, this is just the beginning as we continue to work and experiment with technology, and what we are seeing around us here at Hannover Messe indeed expands the realm of possibilities. 

3. Industry 4.0 holds immense opportunities for ASEAN. The region has seen steady progress over the last five decades, with our combined GDP growing from US$23 billion in 1967 to US$2.9 trillion in 2018. This is expected to continue, and we foresee ASEAN to continue growing over the near time, and if it continues on this trajectory, ASEAN may become the fourth largest economy in the world by 2030. By using the technology in the Fourth Industrial Revolution, ASEAN will continue to benefit further. A study by McKinsey estimates that Industry 4.0 is expected to deliver up to US$3.7 trillion of benefits globally by 2025, and of this, ASEAN has the potential to capture up to US$600 billion. ASEAN is a market that many companies that are looking at Industry 4.0 and its technologies are keen to pursue. As a new, developing economy, ASEAN is also less burdened by legacy systems, and is hence in a good position to start fresh and leapfrog into a new era of advanced manufacturing.

4. Singapore remains globally competitive as a high-value manufacturing hub. For Singapore, manufacturing has been a key pillar of our economy since our independence more than 50 years ago. Last year, manufacturing came in at 21.4 per cent of our GDP, and the Future Economy Council of Singapore has committed to maintain manufacturing as a significant percentage of our GDP at 20 per cent for the foreseeable future.

5. Over the years, Singapore has built up a diverse base of industries, and achieved leading positions in areas such as Aerospace, Semiconductor, Specialty Chemicals and Biomedical Sciences. For example, Singapore produces 5 of the world’s top 10 drugs and is the 5th largest producer of refined oil. We are also the 4th largest global exporter of high-tech products in terms of value, behind China, Germany and the USA. 
 
With its advanced manufacturing initiatives, Singapore is determined to lead the way in Industry 4.0 in ASEAN 

6. Nonetheless, as a small country with no natural resources, Singapore is extremely aware of the importance to leverage on technology to improve our competitiveness and productivity. With the emergence of new technologies, it was important for Singapore to embark on strategic initiatives in advanced manufacturing to not only support the transformation of existing industries and uplift our existing manufacturing base, but also to contribute thought leadership and share best practices with the rest of the region.  

7. In 2017, we launched the Smart Industry Readiness Index, or SIRI for short, to provide a common framework for all companies to learn the key concepts of Industry 4.0 and evaluate their Industry 4.0 readiness levels. SIRI has received a lot of interest from ASEAN member states since and was presented at the World Economic Forum on ASEAN last year. To build on this effort, we launched the SIRI Prioritisation Matrix yesterday with the aim of helping companies start, scale and sustain their Industry 4.0 transformation plans. 

8. Another initiative that we have started in 2018 is the hosting of the Industrial Transformation Asia Pacific trade show, or ITAP. With this Asia Pacific edition of Hannover Messe, we bring together an ecosystem of leading manufacturers, technology providers and thought leaders to exchange ideas, build networks and co-innovate. I would like to take this opportunity to welcome all of you to attend the second edition of ITAP, in Singapore this October.

9. We are also setting up an infrastructure space called the Jurong Innovation District (JID). This is a place for the ecosystem players – the innovators, educators, training providers, technology providers, and manufacturers – to co-locate in one place. This is where we can train the workforce to keep pace with the technology evolution, testbed new technologies, as well as for the Government to look at policy innovation and create sandboxing areas where companies can trial cutting-edge technologies.

10. The JID will also include an underground logistics distribution network that will allow sensors to be installed and to test autonomous vehicles for delivery of upstream and downstream products between manufacturing sites in this area.

Singapore is working closely with ASEAN to help businesses leverage new opportunities in Industry 4.0
 
11. In addition, to help companies seize opportunities in Industry 4.0 in Southeast Asia, Singapore is also working closely with ASEAN member states on specific initiatives to embrace and invest in digital technologies. 

12. One such initiative is the ASEAN Digital Integration Framework, which seeks to assess the digital ecosystem in ASEAN and identify how we can better enable all stakeholders to benefit from ASEAN’s digital integration efforts. 
 
Singapore as the gateway to ASEAN
 
13. Last but not least, many recognise Singapore’s strengths in manufacturing and our strategic location as a key launchpad into the rest of Asia and ASEAN. Today, there are many multinational companies, including some 1,800 German companies, based in Singapore. 

14. The eventual ratification of the EU-Singapore Free Trade Agreement (EUSFTA) will improve Singapore and European companies’ access to each other’s markets, and provide a stable and fair regime for foreign investors. This will not only strengthen our commitment to multilateral trade, but will also serve as a vital building block to a potential ASEAN-EU FTA in the future.

Closing
 
15. To conclude, there is much value to be reaped as ASEAN embarks on its Industry 4.0 journey. I look forward to closer collaborations between Singapore, ASEAN and Germany, bring innovative ideas and solutions to our region and beyond. I wish you all a fruitful networking session ahead. 

16. Thank you.

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