Mr Lee Yi Shyan at Spirit of Enterprise Awards Ceremony 2008

SPEECH BY MR LEE YI SHYAN, MINISTER OF STATE FOR TRADE AND INDUSTRY AND MINISTER-IN-CHARGE OF ENTREPRENEURSHIP, AT SPIRIT OF ENTERPRISE AWARDS CEREMONY 2008, 10 OCTOBER 2008, 7.15 PM AT PAN PACIFIC HOTEL BALLROOM

Mr Henry Tan, President of SOE

Distinguished guests,

Ladies and gentlemen,

A very good evening to all.

Introduction

I am happy to join you here this evening for the Spirit of Enterprise Awards 2008.The entrepreneurship path has often been likened to a marathon. It involves a lot of hard work and perseverance. It is a path that few would choose to take. But those who do often enjoy great satisfaction -- of creating a business, usually out of nothing more than an idea. I am very glad to see many of you here this evening, who have endeavored to turn your business ideas into reality. Tonight, we will honor the 43 winners of the Spirit of Enterprise 2008.The nominees also deserve no less mention, as you have likewise demonstrated the spirit of enterprise.

As we honor our entrepreneurs tonight, we are cognizant that our businesses operate in a highly volatile environment. Indications are that the financial crisis in US and Europe are affecting the real economy, reducing consumption and demand for goods from exporting countries in Asia. Most forecasts predicted a slowing Asian economy in 2008 and 2009.

The advance estimates announced by the Ministry of Trade and industry this morning has indicated that the Singapore economy is estimated to contract by 0.5 per cent in the third quarter of 2008 compared to the same period last year. The decline has largely been the result of one or two industries, namely pharmaceuticals and electronics, which collectively account for about 13% of the economy. On other fronts, we have yet to see a significant decline in economic activities. Our services-producing industries have held up well so far. Most of the segments within services e.g., business services, transport and storage, and info-comms should remain on track for growth for the rest of the year. Given the slowing world economy and volatile financial situation globally, we cannot rule out the possibility that conditions will worsen in the coming quarters. Given this backdrop of volatility in the financial markets and the slowing down of the major economies, how to sustain your business operations and keeping the enterprising spirit alive are amongst the many questions we ask.

Importance of Entrepreneurship to Singapore

This spirit of enterprise is important to Singapore in our next phase of economic growth. We have done well in the past attracting foreign MNCs, being efficient employees and adding value to these businesses. Going forward, we are transiting to a new economy that is knowledge-driven, built on innovation and technology.

Consider Apple iPod as a value proposition. A recent study shows that while a $300 iPod sold in the US results in a $150 increase in the US trade deficit with China, China’s value capture is at most a few dollars (1% of the IPod's retail value). A sizeable amount of the value-added ($163) still accrues to the US, in supply chain management, IP and producing key components. Since the bulk of the Apple iPod’s value is in the conception and design, Apple gets US$80 for each iPod it sells, the largest piece of value added in the entire supply chain. The question we ask ourselves is in the entire value chain, where do we want our players to play at. If we are at the lower end of the chain, what does it take to help our companies move up?

Another study in the USA has shown that small and start-up companies are a source of innovation and creative concepts. This is why over the years, the Action Community for Entrepreneurship or ACE, has been encouraging new business formation. In fact, more businesses have been started, from about 5,500, in 2003 to 6,700 in 2007

[1]

[1].We are also seeing more young people embarking on entrepreneurship as a career. In the Start-up Enterprise 2008 or STEPS Survey, the results showed that 20% of our start-ups were set up by young people below the age of 30.

Launch of YES! Schools – Young Entrepreneurs Scheme for Schools

SOE is an important partner to ACE’s work, and a driving force in seeding enterprising spirit with start ups and small businesses. One example of SOE’s good work in inspiring youths is the SOE Primary and Secondary Entrepreneur Programme. With this program, students are provided with a mentor and given $1,000 in seed money to start a business. Over this past year, 135 students from 10 schools have benefitted from the program. Students learn to sharpen their instinct and ability to identify and on a winning idea to create value. They learn about risk-taking and recovery from failures.

To reach out to more youths, I am pleased to announce that the government will set aside $4.5 million for a Young Entrepreneurs Scheme for Schools (YES! Schools). Through this fund, SPRING Singapore, with support of MOE, will support schools that have a comprehensive plan to develop entrepreneurial mindsets and skills through “learning by doing”. Polytechnics, ITE colleges, junior colleges and secondary schools can tap on this fund to establish holistic and structured entrepreneurship programmes and activities to engage students in meaningful entrepreneurship learning opportunities.

Entrepreneurs giving back to raise Young Entrepreneurs

Besides funding, the success of such programmes depends on the support of entrepreneurs to coach the teachers and students. There’s nothing like learning from the practitioners. Teachers and students who are passionate about entrepreneurship can benefit immensely from mentors who are willing to share with them their perspective and guide them. SOE has done well in engaging past award recipients to be mentors for the school projects. This spirit of giving back to develop the next generation of entrepreneurs is just as important as the spirit of enterprise itself.

One of the mentors, Ms Serena Wee, told me that she derives great personal satisfaction from being involved in mentoring youths who are keen to explore entrepreneurship. She said, “It was most heartening to be able to instill the spirit of entrepreneurship among our younger generation by sharing personal stories of ups and downs as well as the sheer grit and perseverance necessary to succeed. "It is not just about sharing knowledge and skills. It is also about sharing your experience, your can-do attitude, and encouraging them. This is what will make a difference in the lives of our young people.

I would like to encourage entrepreneurs here to play a part to develop our next generation of entrepreneurs. You have built your enterprises and understand what it takes in the process. It would create a significant impact if you can commit your time to share these valuable experiences with budding entrepreneurs. I am sure it will be your proud moment when you see your protégés here, receiving the SOE award.

To all the award recipients, my heartiest congratulations. May I wish you the very best in all that you do.

Thank you.