Mr Peter Ong, Chairman of Enterprise Singapore,
Fellow panellists,
Ladies and Gentlemen,
Introduction
1. A very good afternoon to all of you. Thank you for inviting me and giving me this opportunity to speak to you. When I visited my constituency over the weekend, I noticed a sense of optimism in the air as our businesses re-open. I see many happy faces of shopkeepers and residents who are out enjoying a meal with their family and friends. Despite this positivity, we should not draw the wrong conclusion that things are going back to what they used to be. The battle against COVID-19 is not over. The virus is still in our community and we remain in a COVID environment. There is still a need for us to take safety precautions to prevent a second wave of infection.
2. The COVID-19 pandemic has accelerated many changes in our economy and society. To thrive in such an environment, businesses must be agile and constantly adapt to new operational challenges and requirements, and consumer preferences.
Digitalisation, Design and Determination
3. There are three important Ds when businesses embark on enterprise transformation. These are Digitalisation, Design and Determination.
4. Let me start with Digitalisation. Without knowing how long the pandemic will last, learning how to make good use of technology has become even more critical and urgent for many businesses. It is no longer a luxury but a necessity. Companies must diversify their revenue sources, strengthen their value proposition, and figure out a way to operate safely while remaining commercially viable.
5. Customers are looking for new business models and new ways of transacting with businesses. The adoption of digital solutions enhances the company’s resilience and opens up new possibilities.
6. Take for instance, Scent by Six, a company that retails perfumes and home fragrances. It conducts B2B fragrance customisation through its outlet at Bugis Junction. They had set up a website and used social media, such as Facebook and Instagram, to gather more than 12,000 online followers. This has given them a head-start over their competitors during circuit breaker as they were able to quickly switch their business models and sell their products online without compromising safety. With this additional source of online revenue, Scent by Six will have a head-start on its competitors as the economy re-opens.
7. I believe many of us are familiar with the first D on digitalisation, because it is what we usually focus on when we think about technology adoption. However, my belief is that technology should not be implemented in isolation. It needs to be accompanied with good design and a good understanding of its impact on users and on society.
8. When we place human needs at the centre of technology and at the centre of design, it pushes the boundaries of what technology can do, and it also provides the impetus for continual improvement. Many of us would think of companies like Apple and Dyson when we speak of the importance of design in technology. These companies have pioneered superior technology, but what makes their products unique and attractive to consumers is the integration of technology with innovative human-centric design. Technology is important but they don’t just rely on technology alone. They combine it with human centric, innovative design. This is what we hope to achieve through multi-disciplinary programmes offered in our institutes of higher learning (IHLs), including the Singapore University of Technology and Design (SUTD) which adopts a whole-of-university approach that is purpose-built for a seamless integration of engineering, technology, design, and the humanities.
9. Another aspect of design is the concept of design-thinking. It enables companies to focus on the user experience, not only in the development of its products – but also in the improvement of its work processes and operating environments. With COVID-19, design thinking skills will come in quite handy when companies look at how to change the way they operate.
10. Let me share with you a story of one Singaporean company that has embraced design-thinking to achieve a competitive advantage. This is not the story of a young start-up. Rather, it is a story of a 70-year old rock sugar company called Cheng Yew Heng. Inspired by a business mission to San Francisco with Enterprise Singapore, Cheng Yew Heng’s executives decided to pioneer the use of design-thinking to develop a product for a new generation of consumers and to re-invent its traditional business processes for the modern age. The company not only conducted extensive market research and design ethnography to understand customer pain points – but also worked with our universities, polytechnics and ITEs to develop a new methodology to crystallise rock sugar on a stick and to infuse sugar with different colours and flavours.
11. The result of their painstaking three-year journey was the creation of its new product line, the Jewel Rock Sugar Sticks. Since the launch of this new product, Cheng Yew Heng has seen a three-digit growth in its rock sugar revenue and successfully renewed its brand image with a younger generation of consumers.
12. This story of one of Singapore’s oldest rock sugar company illustrates not only the importance of “Design” – but also “Determination”, which is the third D I want to talk about.
13. Before the company decided to re-invent itself, it had been struggling with an increasingly competitive rock sugar market, with plenty of cheaper alternatives coming in from Malaysia, China and Thailand. Without innovation and product differentiation, traditional rock sugar is a commodity. When we compete based on commodity, the competition will be based on price. If we compete on this basis, the odds are not in our favour as Singapore companies face higher cost structures than their rivals in regional countries.
14. Instead of giving up and keeping to its old ways, the Cheng Yew Heng leadership team rallied its stakeholders together, overcame initial resistance to reinvent itself, and emerged stronger with new product offerings. I am sure Cheng Yew Heng’s journey involved many setbacks and failures along the way. We only see the end results and it seemed so simple, but it was a three year process and they suffered many setbacks and failures. However, they never gave up. They persevered and had the determination to press on despite facing obstacles before they eventually found the winning formula. This shows the importance of the third D – Determination. If we combine the three Ds, this will help our companies embark on a more successful enterprise transformation.
Partnerships for Stronger Business Outcome
15. Building on the 3Ds of enterprise transformation, let me now touch on the importance of partnerships with key allies to achieve strong business outcomes. I want to talk about two types of partnerships today: partnerships with solution providers and partnerships with our trade association and chambers (TACs).
16. We have seen many solution providers emerge as key partners during this pandemic. For instance, social enterprise Foreword Coffee Roasters has worked with a solutions provider to leverage on their expertise to adopt an online food ordering platform, raise its online sales revenue, and upskill its employees. Having benefited from its partnership with a solutions provider, Foreword Coffee plans to adopt more digital solutions in other categories to qualify for the recently announced Digital Resilience Bonus, which will strengthen their business operations and strategies.
17. Besides solution providers, our trade association and chambers are important allies too. With their strong sectoral links, TACs can support your capability development efforts and introduce alternative sources of funding – such as through the SG Together Enhancing Enterprise Resilience programme, or STEER. There is a matching grant given by the Government when the TACs set up such resources to help their members.
18. For example, Enterprise Singapore partnered with the Singapore Chinese Chamber for Commerce and Industry and Meituan Dianping (美团点评) for a promotional campaign in China, titled “Dine Singapore”, from 15 April to 14 May 2020. This promotional campaign featured 12 famous Singapore food brands such as Bee Cheng Hiang, Imperial Treasure, Jumbo Group and Paradise Dynasty. This increases their brand awareness and market presence amongst Chinese consumers. Through such partnerships, our companies can share resources and benefit from collective Singapore branding when they venture overseas. Rather than go on their own, there are some synergies that can be reaped when they go together.
Seeking Opportunities Beyond Singapore
19. This brings me to my final point, on helping business to tap on opportunities beyond Singapore. Let me share an example. Established in 2017, BioMind AI system is an award-winning deep tech company that builds predictive AI applications for the healthcare industry. At the height of the COVID-19 outbreak in Wuhan, the company rapidly adapted its AI solution to develop a COVID-19 screening module based on chest CT scans, and deployed their product across various cities in China – successfully establishing a foothold in this market.
20. The Government understands that the internationalisation journey is not easy, which is why we are here to support our businesses. The Grow Digital initiative by IMDA and ESG is one of the many programmes to support you. This initiative aims to help our businesses go global easily through e-commerce platforms – without having to invest in a physical presence overseas.
21. More than 500 SMEs in Singapore have gained access to new overseas market through digital platforms under this initiative. For example, Nanyang Optical, a local eyewear chain that many of us are familiar with. Last month, the company decided to sign up for the Multichannel E-Commerce Platform under the Grow Digital initiative to create an online presence locally to reach more customers during circuit breaker.
22. I am pleased to share that the results have been encouraging for Nanyang Optical. The company is now planning to further expand its e-commerce business overseas, starting from Indonesia by adopting JD and Shopee’s e-commerce platforms. This is an example of turning crisis into opportunity. There are many benefits to the Grow Digital initiative, and I encourage all of you to find out more and sign up for it.
Conclusion
23. The road ahead will be tough. The journey for enterprise transformation is not going to be easy. However, please do not give up. It is a journey that is worth embarking on. The Government and our TACs is committed to support you and to work closely with you every step of the way.
24. Thank you and I look forward to our panel discussion later.