Mr Lennon Tan, President, Singapore Manufacturing Federation,

Your Excellencies,

Yang Berbahagia Tan Sri Dato’ Soh Thian Lai, President of the Federation of Malaysian Manufacturers,

 

Ladies and gentlemen,

Introduction

1. Good morning, everyone, happy new year to you.

2. It is really an honour for me to be here at the inaugural Singapore Manufacturing Federation's (SMF) Manufacturing Day Summit 2024. I wanted to frame this opening address as a reflection and discussion of what we can do together for the manufacturing industry.

3. The theme for today’s summit is “Navigating Global Shifts, Building Resilience, and Driving Tomorrow’s Innovation”. As I was reflecting on this theme, and having worked closely with our SMEs and our manufacturing sector, I wanted to share what I felt was relevant for those present here. I will talk about the global shifts that will be key for the manufacturing sector, and how we can navigate these shifts – by investing in innovation and our workforce.

 

Global Shifts

 

4. Singapore is a regional powerhouse for manufacturing. Our manufacturing sector represents over 20 per cent of our GDP and we were the world’s eighth-largest exporter of high-tech goods[1] in 2022. Singapore is also home to several high-value industries like pharmaceuticals and semiconductors. This did not come about by chance; this has been a result of very painstaking work, the result of our ambitious steps that we took decades ago to grow our manufacturing sector, post-independence.

 

5. But there are three global shifts that will not only challenge us but provide many opportunities for the manufacturing sector.

 

a) First, technological advancements, which present both opportunities and risks for our businesses. Let me share a few examples. Artificial intelligence and machine learning are already affecting – and boosting – our manufacturing capabilities. Businesses are already switching to predictive maintenance, so that they can have better quality control and manage supply chains easily. Many of you are already leveraging on Internet of Things (or IoT) technology to help you monitor your work processes in real-time, and to boost your efficiency exponentially. But to adopt these practices, businesses must be ready to disrupt your own processes and your own way of doing things, because if you do not disrupt yourself, then you risk being disrupted by your competitors.

 

b) Second, reconfigurations of global supply chains, which have the potential to affect Singapore’s position as a global node, such as what is happening in Ukraine and Russia, and more recently, the challenges in the Red Sea. These challenges are real and have affected global supply chains. So, what are manufacturing companies doing in response to these challenges? You diversify your supply chains to source your materials and components from multiple countries or suppliers. You go overseas to source materials closer to their source countries; companies are bringing production closer to consumer markets or even back to their home countries. These could significantly disrupt our businesses and our manufacturing sector.

 

c) Third, going green. Consumers are increasingly scrutinising and prioritising sustainable practices amidst growing environmental concerns. Many of you would agree that this has placed pressure on your companies to adopt greener practices in how you produce, how you source, and throughout your supply chains. So, as the impact of climate change becomes more immediate and severe, I think we all agree that the pressure on all of you to be even more green and reduce your carbon footprint will inevitably grow.

 

6. As the world shifts, so too must we; and as we shift, I am confident that we can strengthen Singapore’s attractiveness as a manufacturing hub. But to capture the opportunities, we must double down on what we are good at – the core value propositions unique to Singapore – our connectivity, our stability, and our continued work on enhancing our innovation ecosystem.

 

Leveraging innovation to navigate and adapt to global shifts

 

7. In this current business climate, everybody is facing intense competition, including Singapore. We must continue to invest significantly in research, innovation, and enterprise efforts.

 

a) But we are not starting from scratch. In 2020, we launched our Research, Innovation and Enterprise 2025 plan, putting S$25 billion into this effort, part of which supports research and development (R&D) in our manufacturing sectors. R&D is key to our mission to continue growing Singapore as a global business, thought leadership, and talent hub for our manufacturing sector. Investing in research and development will help us achieve this ambition.

 

b) Second, we must partner. We have tapped on public-private partnership models to help our companies move up the manufacturing value chain, such as pairing Queen Bee companies with our small and medium enterprises (SMEs). Further, the A*STAR Advanced Remanufacturing and Technology Centre, or ARTC, provides a collaborative platform for industry players, public sector research institutes and academia to help SMEs adopt technological practices and IOT technology in manufacturing or additive manufacturing. So, if you’re an SME, I encourage you to  talk to ARTC, so that they can help you  create products to cater to increasing consumer preferences.

 

i. More recently, ARTC has also delved into new growth areas like sustainability. It has partnered the industry and national platforms like the National Additive Manufacturing Innovation Cluster to enhance environmental sustainability in companies’ production process.

 

c) The Singapore government is also committed to supporting manufacturing businesses in this journey, through our National AI Strategy 2.0, which we announced late last year. The National AI Strategy 2.0 will focus on manufacturing as a key cluster.

 

8. The third approach that we must take is to go green. Beyond developing these technologies, going green is important, as we are grappling with environmental and social consequences of the traditional way of manufacturing. Earlier, I also mentioned that consumer preferences were shifting towards sustainable practices and products.

 

a) As the industry association responsible for our manufacturing companies, SMF has demonstrated your commitment to sustainability. You have appointed a Chief Sustainability Officer, who will help your members access sustainability-related expertise and implement green practices.

 

b) I encourage more manufacturing firms to talk to SMF and explore how you can incorporate the Chief Sustainability Officer as a service to implement sustainable practices and capture new opportunities without expending additional costs.

 

Investing in and uplifting our people

 

9. Lastly and most importantly, the importance of investing in our people. As we shift, as we transform, we must make sure that we bring our people along in this journey and uplift them. Technology cycles are shortening rapidly; similarly, the half-life of knowledge and our skills are also shortening: you learn something, and very soon, it goes obsolete. We must continually upskill and reskill our workers to ensure our workforce remains globally competitive.

 

a) Our manufacturing sector accounted for over 220,000 local jobs in Singapore in 2022. Therefore, we are committed to developing a local pipeline of manufacturing talent, including young people and women. We expect new investments and projects in the industry will create more than 4,600 jobs over the next five years.

 

b) The Government remains committed to continue investing and encouraging businesses and the workforce to adopt lifelong learning through SkillsFuture. If you work in manufacturing, or if you intend to, I encourage you to use your SkillFuture Credits to defray out-of-pocket training expenses. If you’re a business, I similarly encourage you to use your SkillsFuture Enterprise Credits to train and transform your workfare.

 

c) But manufacturing is also hands-on, and training must go beyond the classroom. Therefore, we need transform human resource (HR) policies to develop more effective on-the-job learning and to attract and retain talent. MTI, and the Government as a whole, is here to support you. For example, DPM Heng and I launched the Manufacturing Employers’ Handbook at the Industry Transformation Asia Pacific in 2022, which helps companies, especially SMEs, develop and adopt progressive HR strategies to recruit and retain talent.

 

d) But the manufacturing sector does not have to go at this alone. Trade associations and chambers, like SMF, play a very important role alongside the Government. For example, SMF’s Centre for Corporate Learning, provide training solutions to help companies train their people. I look forward to working with SMF to scale up this effort.

 

Conclusion

 

10. As we step into this new year, which is also a dragon year - an important year for those observing the lunar calendar - some of us might feel that we are already beset with last year’s challenges. But many of us are just as optimistic.

 

11. Having journeyed closely with the manufacturing sector over the last few years, I am confident that we will do well this year too. Like the dragon which we will celebrate in this lunar new year, I believe that the manufacturing sector is creative, resilient, and tough. We will continue to strengthen the manufacturing sector together.

 

12. Once again, I thank SMF for having me here, and I wish you success in 2024.