1. A very good morning to all. Let me start by thanking everyone as many of you here have played a very important part in our journey to help our businesses and government work closer together in simplifying rules and regulations to develop businesses. Special thanks to the PEP panel members and all of you who have supported the PEP.
2. We are here today to celebrate the contributions of businesses and government agencies to Singapore’s pro-enterprise environment. This has been facilitated by the PEP and TACs, including our co-organiser today, SBF. Mr Teo Siong Seng, Chairman of SBF, earlier mentioned ‘agile regulations’ in his speech. When I first used the words ‘agile regulations’, people thought that it was an oxy-moron. Regulations are not meant to be agile, and agile things are not called regulations. In Singapore, we have the habit of combining two conflicting ideas to bring out the best in them.
3. Today I want to focus my speech on how we see regulations as core to our competitive advantage. It is about how we use regulations to create competitiveness for our businesses and consumers.
PEP 1.0: Protective, Efficient, Predictable
4. Let me first talk about what I call PEP 1.0. This means that rules must be protective, efficient and predictable. Past efforts have generally focussed on these three issues.
5. Protective Regulation is about being effective in protecting public interest.
6. This includes ensuring the safety of a product or service. The high level of trust and quality associated with the “Singapore brand” locally and globally is evidence of our effectiveness. Our companies benefit from consumer confidence in Singapore’s products and services. Recently when I launched our efforts to help small and medium enterprises in the food industry, they said that when the ’lion head’ logo is printed on their products, it commands a premium overseas because it stands for the Singapore brand. Therefore, protecting public interest and achieving the brand equity is in sync.
7. Next, the ‘E’ in the PEP 1.0 stands for ‘efficient regulations’. Efficient regulation is about minimising compliance and enforcement cost. This is something we want all public agencies in Singapore to do. Every regulation has a cost. It has a cost to the business, as well as to the agencies involved. The question is how do we make this as simple and as efficient as possible. Rules that are most effective are often simple.
8. In my role as Minister-in-charge of the Public Service, I always tell my colleagues in public service that every agency needs to bear in mind the cost to business when formulating, communicating, enforcing and reviewing their regulations.
a. The PEP has greatly facilitated this process.
i. Since its formation in the year 2000, the PEP has taken in over 2,000 suggestions, which have influenced over 1,000 rule changes.
ii. We continue to receive a significant amount of suggestions. This signals the confidence businesses have in the PEP, but also the amount of work we still have to do.
b. More importantly, regulators are increasingly aware and proactive in seeking out and implementing suggestions.
i. For example, MOH has committed to collaborate with the PEP on the pro-enterprise clinics that we have organised with TACs. From next year, MOH will support quarterly clinics to extend assistance in health regulatory matters to businesses.
c. Regulators are also proactively initiating pro-enterprise changes.
i. For example, BCA now allows firms to pool resources and competencies at the project level to meet tender requirements. This is expected to open opportunities for hundreds of firms, especially SMEs in partnership with the larger players.
9. Lowering compliance cost for businesses often leads to lower enforcement cost for regulators.
a. For example, several agencies used to conduct inspections before approving food services establishments. On review, HSA decided that they could remove their inspection, which meant savings for them and for companies.
10. Finally, predictable regulation is about adopting a consistent logic in rule-making.
a. For example, data collection has emerged as an area that many consumers are concerned about from a privacy perspective. Some of the biggest companies in the world utilise the data collected through their platforms to offer better service offerings to consumers and strengthen their business model. However, this can create significant barriers to entry for new firms.
b. The question we need to ask ourselves as regulators is how we can protect the varied interests of consumers without diminishing varied companies’ competitiveness.
c. In answering this and other issues, the core principle is that rules must always be based on clear economic principles and considerations. For data collection, this means investigating concerns to assess and respond to actual risks.
d. We must exercise this discipline in rule-making to give businesses the long-term confidence that the necessary evolution of Singapore’s rules will be based on a consistent logic that becomes predictable for businesses.
Transition from PEP 1.0 to PEP 2.0
11. PEP 1.0 can be summarised as the efficient and predictable protection of public interests. That was the past. Today, we need to transit from PEP 1.0 to PEP 2.0. We need to now move one step higher, so as to generate the next level of competitive advantage for Singapore.
12. We need to augment our regulatory stance with PEP 2.0, which can be summarised as the risk-managed and timely facilitation of business growth. PEP 2.0 requires progressive, enabling and pioneering regulation.
PEP 2.0: Progressive, Enabling, Pioneering
13. Progressive regulation is about optimising regulations at the system level.
a. This requires agencies to work together to devise and implement a coherent regulatory journey from the perspective of businesses.
b. We have started to employ the Service Journey approach for regulatory reviews.
i. The GoBusiness Licensing Portal is the result of 16 agencies working together to streamline the process of setting up a food services business. From the previous 14 touchpoints, businesses now just need to deal with a single application form.
c. The Service Journey approach will be increasingly important as new products, services and business models tend to be cross-sectoral in nature. These days, regulating a system is unlikely to fall under the purview of just one agency. Yet, some parts of the system may not fall under any agency. Agencies will thus need to be prepared for changes in their jurisdictions to address emerging regulatory gaps.
14. The second is enabling regulation. In the past, we tended to take a defensive view towards regulations. When we take on the concept of enabling regulations, it means that our rules must also enable better things to happen. This is so that new business ideas can be facilitated and enabled, without being hindered.
15. New ideas often carry uncertainty over the range and magnitude of potential risks.
a. Trying to address all potential risk from the start would result in premature regulation that is likely to kill the idea. At the same time, ignoring the risk can carry significant threat to public interest.
b. There thus needs to be a process of discovery and fine-tuning of regulations.
16. This is where regulatory sandboxes can make a critical contribution.
a. PEP’s recently announced New Idea Scheme will serve as a direct channel for companies to raise new business ideas. The scheme will help accelerate and standardise the facilitation of new business ideas. The scheme will tap on existing regulatory sandboxes administered by agencies or coordinate the creation of new ones.
17. Our commitment to developing enabling regulations will give businesses greater confidence to invest in researching and developing new business ideas in Singapore. Today, amongst the many suggestions that we have, many more of them have to do with enabling new business models rather than just tweaking the old rules that already exist. This is a good sign that our business community and government agencies are working together to look at new things, and not just refreshing old ones.
18. Finally, pioneering regulation, which has two aspects.
19. The first aspect is about identifying and assessing major trends before they evolve into business ideas.
a. For example, MAS acted early to establish the necessary structures to keep pace with rapid FinTech developments. MAS set up a FinTech Ecosystem Office to conduct horizon-scanning for nascent technology that could potentially be applied to the financial industry. MAS also set up an International Technology Advisory Panel, which includes thought leaders in technology and innovation. The Panel is equipped to help MAS assess the emerging technology.
b. Such horizon-scanning, coupled with strong connections with researchers and scientists, needs to be adopted across government for us to deal with the pace of technological change.
20. The second aspect of pioneering is about going beyond our borders to establish regulatory networks as a competitive advantage for our businesses.
a. As a small economy, our businesses need access to global markets in order to grow. Increasingly, market access is restricted not by tariffs but by regulatory barriers.
b. Our economic agencies do not have the breadth or depth of technical knowledge to address these barriers. It is critical that regulators do not limit their role to guardians of domestic consumers, but contribute their expertise to facilitate business growth overseas.
c. There are three ways we should build regulatory networks:
i. First is exporting our regulations as reference standards for other countries. This can occur naturally when we are pioneers in developing enabling regulations. In some cases, it may require us to invest in technical assistance for countries that are in an earlier stage of their regulatory journey.
ii. Second is taking into account interoperability with key markets when we formulate our regulations. When we are in regulatory networks with other countries, it makes it easier for our businesses to enter those markets.
iii. Third is establishing multilateral and bilateral agreements that promote common standards or the recognition of different standards that meet the level of protection required by the importing country. Again, it is very important for us to make sure that we have such networks so that our businesses have the ability to move seamlessly into such markets.
21. The two aspects of pioneering regulation gives our businesses a head-start in testing the commercialisation of their ideas and thereafter enables them to export their products and services. This will make our companies globally competitive from both product maturity and regulatory compliance standpoints. On the other hand, when we share regulatory standards with other countries, it also benefits the local consumers when our consumers are able to get better cheaper products without having to pay the extra compliance cost.
Importance of Partnership
22. Whether it is PEP 1.0 or PEP 2.0, fundamentally both have to do with partnership. In a few moments, we will officially unveil the new PEP logo. The key to unlock PEP 2.0 is in the tagline. “Enabling Business – Government Partnership”. This is something unique to Singapore for our competitive advantage, where the government works together as a team to compete with others.
23. We will not succeed with Partnership 1.0, where businesses provide feedback to the government who then try to deliver a solution.
24. We need Partnership 2.0, where businesses and government debate, deliberate, and co-create the business environment that is conducive to growth. This is also key to how we see government. In Singapore, the government and businesses will all come together to solve the problem because we are Team Singapore.
25. Partnership 2.0 starts with mutual understanding.
a. Businesses need to understand the variety of public interests that the government is tasked to protect. The task is more complex where there are competing legitimate interests.
b. The government is committed to developing a more pro-enterprise mindset with accompanying capabilities. MTI together with PSD will lead this effort.
i. First, we have set up a Regulatory Advisory Group comprising regulatory leaders that can drive adoption of smart regulation.
ii. Second, we are arranging structured staff development programmes for regulators at different levels. This will include training in smart regulation approaches as well as postings to the private sector.
c. TACs have an important role to play in this partnership. They are the critical bridge between government and businesses, and between businesses.
i. We look forward to deepening and expanding our partnership with TACs who are prepared to synthesise feedback and work with the government on solutions.
26. Ladies and gentlemen, our work on PEP 2.0 starts on the best possible foundation.
a. The World Economic Forum recently recognised Singapore as the world’s most competitive economy. This included having the least burdensome regulations and being the most responsive to change.
27. However, there is never room for complacency and always room for improvement, including on growing our entrepreneurial culture.
28. None of us individually possesses all the answers or means to ensure the continued competitiveness of Singapore.
29. Enabling business-government partnership unlocks our collective wisdom, creativity and competencies to create solutions and opportunities that benefit all Singaporeans and Singapore businesses.
30. I thank you very much for all the contributions that you have already made, and look forward to working with and for you to deliver a Singapore that we can each call our own that we can all be proud of. Having ranked number one in the World Economic Forum Global Competitiveness Report, our next challenge is to beat ourselves to have higher standards and higher benchmarks for ourselves. Not just because we can be number one in the world ranking, but so that we can do justice to the potential of our people and businesses. That is why it is our commitment on the public sector front and from MTI, to work closely with our businesses to make sure that Singapore will set pro-enterprise standards.