Ladies and Gentlemen,
1. This year is the silver jubilee of the Business Excellence (BE) initiative in Singapore. This is an occasion for celebration and I am pleased to be here again for the BE Awards, to recognise the achievements of organisations in their BE journey. The BE initiative was launched in 1994 with the vision of enhancing organisations’ competitiveness to prepare Singapore for the future. This vision is even more relevant today. With dark clouds looming, we need to ready ourselves for the challenges ahead.
2. The global economic environment has been weakening. Since the start of the year, the IMF has lowered its growth forecast for global GDP growth twice – from 3.5% in January to 3.3% in April and 3.2% in July. In fact, the IMF will be releasing its latest growth forecast in a few hours.
3. This is not just a temporary storm that we need to weather. The changes in the global economic environment are likely to result in permanent shifts, which will have enduring impact.
a. The US-China trade dispute has evolved beyond tariffs to other areas, such as technology. While the US and China will begin their latest round of trade negotiations this week, a trade deal is unlikely to solve the underlying US-China tensions. A worst-case scenario would be if there is no trade deal and US and China continue their tit-for-tat trade measures. The IMF estimated that the US-China tariffs could cut global economic output by 0.8 percentage-points next year.
b. The actions by various major economies have disrupted the norm for WTO members to abide by WTO rules in resolving trade disputes. This has emboldened other WTO members to use trade measures as a tool to resolve bilateral issues. Even if the US-China trade dispute is resolved, there will be a long tail to these other bilateral trade disputes. The multilateral trading system is under stress, and this will drag down growth.
c. Another concern is Brexit. The deadline for Brexit is 31 October. The EU will decide by the end of next week whether a Brexit deal is possible. If there is no deal by 19 October, the UK Prime Minister is required to request for a delay to Brexit. Regardless, the question of Brexit has already caused uncertainty and weakened global economic growth.
4. We can no longer take the multilateral trading system and our access to overseas markets for granted. This is going to be the new normal.
5. Our response to the current slowdown must carefully consider these long-term structural forces while addressing the short-term cyclical issues.
6. But I want to assure all of you that it is not all doom and gloom. There remain bright spots and opportunities for Singapore businesses to grow if we steer the right course.
7. As supply, production and distribution chains shift, we need to strengthen our value proposition to anchor and orchestrate these value chains in and through Singapore. We have a narrow window of opportunity to get it right.
8. We need to strengthen our existing fundamentals that have allowed us to punch above our weight as a small country. These include:
a. A stable political environment with a competent leadership and cohesive society that balances long-term planning with short-term needs, and executes its plans efficiently and effectively.
b. A pro-business environment, with strong rule of law, feedback channels such as the Pro-Enterprise Panel to ensure that our rules facilitate business operations, and regulatory sandboxes to allow business innovation.
c. Superior physical connectivity in air, land and sea.
9. We must also build new strengths to maintain our competitive edge.
a. First, we need to establish Singapore as a global trusted hub for Intellectual Property. Singapore is already ranked top in Asia for IP protection. We need to build on these strengths in enforcement, while growing our IP ecosystem to help companies create, manage, and utilise IP for growth. This is critical because innovation and intangible assets will increasingly drive the next wave of global growth.
b. Second, we need to better harness technology, particularly digitalisation, which enables us to expand our markets and transcend our geographical constraints. Digitalisation is transforming industries, cities and economies. The digital economy is now deeply intertwined with the conventional economy. We are working to build a network of Digital Economy Agreements (DEAs). The DEAs will foster greater digital cooperation and connectivity especially in newer digital areas such as digital identities and AI. We are also committed to developing multilateral rules for e-commerce under the WTO. Together with the DEAs, this will ensure that international rules and policies facilitate the growth of the digital economy.
c. Third, we need to build globally competitive teams comprising local and global talent. Innovation flourishes best in teams with different skills and experiences. Even as we build our local talent pool, we need to remain open to global talent so that we can work with the global best and network with the world. The Tech@SG programme, which will be launched in the fourth quarter of this year, is an initiative that aims to provide high-potential companies in growth areas with access to business networks and the talent needed to grow in Singapore and expand in the region. Complementing that will be the Global Ready Talent Programme that we will launch later this week. This programme will develop Singaporeans and help them gain exposure in international markets.
10. These existing and new fundamentals are critical because we cannot compete on price, but on quality and innovation. We are putting these in place, so that we have a conducive environment for growth, and businesses are well-equipped to cope with the new normal.
11. But business transformation is ultimately up to each business. With over 200,000 enterprises in Singapore, the Government cannot reach out to all of them on our own. Trade Associations and Chambers (TACs) are important multipliers. They are our partners in spreading the message of transformation and driving initiatives to uplift the business community.
12. With support from TACs, we are closely monitoring the economic situation. We will continue to provide support to firms and workers. We are ready to step up our support where and when needed.
13. While retrenchments have remained at low levels, fewer jobs are being created as businesses grow more cautious about hiring. This has understandably caused concerns among our working people who are uncertain about what the short-term future might hold.
14. I want to assure our working people that the Government is working closely with both companies and you to help those who are displaced find new jobs, while continuing to create good jobs for all Singaporeans. Workforce Singapore (WSG) and NTUC have helped about 18,000 jobseekers secure jobs in the first half of this year. This is about 9% more than the same period last year. We will continue our efforts in this area.
15. We will also continue to bring in the right investments that will create high-value, high-quality jobs for Singaporeans. Our investment pipeline this year has been very healthy with multi-billion dollar investments from ExxonMobil, Micron and the two integrated resorts to name a few.
16. If we get our fundamentals right, we will be well-placed to ride the new currents of growth. We introduced Scale-up SG earlier this year to support local companies with high growth potential to develop into global or regional leaders in their respective sectors. The first cohort of 25 companies started their Scale-up SG programme in July, and feedback has been positive. We will expand the programme to more batches of capable and aspiring local enterprises. We are also developing more programmes for the local enterprises to achieve breakthroughs in their growth journey. Our philosophy is not to just try to control costs and compete on price, but to expand our top line and market share by competing on quality and innovation. We also have a suite of support for companies that are at different stages of their growth journey, and are committed to upgrade and transform. We hope that more businesses can look ahead to the longer-term opportunities, and take the right steps today.
17. I am heartened that Enterprise Singapore is undertaking a comprehensive review of the BE initiative to ensure its continued relevance and to encourage more organisations to aspire towards excellence. The BE initiative is, at its core, a developmental tool to help organisations build capabilities and be future-ready. This review will address emerging challenges faced by organisations, such as sustainability, rapid digitalisation, and changing workforce demographics and needs.
18. Once it is completed, BE will provide organisations with a roadmap to achieve sustainable performance and become more resilient in meeting the challenges of the future economy. We look forward to the support of BE organisations and industry partners in this review.
19. Congratulations to all BE Award winners on your accomplishments. Together, by building on the right fundamentals, we can work towards a better future for Singaporeans.