Mr Lee Yi Shyan at the 34th BlueSky Exchange

OPENING ADDRESS BY MR LEE YI SHYAN MINISTER OF STATE FOR TRADE & INDUSTRY AT THE 34TH BLUESKY EXCHANGE (“ENTREPRENEURSHIP DURING CRUNCH TIMES”) ON 31 MARCH 2009, 9.30AM, AT THE SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

Ladies and gentlemen,

Good morning.

Thank you for joining us at the 34th BlueSky Exchange organised by the Action Community for Entrepreneurship or ACE. I am heartened to see so many like-minded entrepreneurs and business people gathered here today to network and learn from one another.

As the minister-in-charge of entrepreneurship, I am deeply convinced of the importance of a vibrant and competitive enterprise sector. In America, a study shows that every year, there were 600,000 new firms formed and 1,000 of them would ultimately become high-growth companies, contributing to 1/3 of the GDP growth. In Singapore, our SMEs account for 2/3 of jobs created and more than half of our GDP. The more competitive our SMEs are, the more resilient our economy.

In this unusual time - how do we help SMEs ride out this crisis - is a topic close to the hearts of many. This is why at the parliamentary debate in February, we devoted much time on the various ways to sustain jobs (e.g. Jobs Credit Scheme), reduce business costs (e.g. Property Tax Rebate), to unclog financing for businesses (eg Special Risk Sharing Initiatives, Financial Facilitator Programme) and build long term capabilities development (e.g. Business Upgrading Initiative for Long-term Development - BUILD).

Since the parliament has spent much time discussing and deliberating the above issues, I would not belabor them. Let me however, use the time given to me here, to talk about Entrepreneurship Development.

As you already know, the Action Community for Entrepreneurship (ACE), is an important initiative in driving entrepreneurship. Over the years, ACE has reached out to 32,000 aspiring entrepreneurs. Together with other entrepreneurship groupings, ACE has created a strong fraternity, promoting a pro-enterprise culture and the sharing of best practices amongst them. More educated and young Singaporeans are now willing to consider entrepreneurial undertaking as so-called “career choices”. Our recent survey suggests that 65 per cent of start-ups’ founders are below 40 years old. And more than one-third of our start-up entrepreneurs are graduates.

We have created a conducive environment for start-ups. Our smaller companies and start-ups already enjoy the world’s lowest effective tax rates. It takes less than 15 minutes and $300 to register a company in Singapore. Singapore has been ranked by the World Bank as the world’s easiest place to do business for three years running.

But we do not stop here. Recognizing that start-ups too will be affected by this crisis, we have recently enhanced our support in three ways - Providing working capital and equity; Encouraging further investments in innovation; Providing greater opportunities for student entrepreneurs.

In the current economic climate, start-ups, like all enterprises, may be vulnerable to cash-flow problems. Our Government loan schemes, especially the enhanced $100,000 micro-loan programme, will provide loan assistance to all small enterprises, including start-ups.

Recognizing that equity capital may also be affected, SPRING recently enhanced the Start-up Enterprise Development Scheme (SEEDS) by increasing the funding ratio from 1:1 to 2:1; allow follow-on funding after the initial investment and raise the funding cap from $500,000 to $1 million per start-up. These enhancements are available to both new and existing start-ups.

Beyond increasing funding options for start-ups, we are also helping nascent start-ups to commercialize their ideas. The Technology Enterprise Commercialization Scheme (TECS) launched last year provides $50 million to help start-ups create their first prototypes for market trials and acceptance. So far, SPRING has supported 17 such technology projects, providing up to $500,000 for each start-up.

We recognize that the spirit of enterprise has to be inculcated from young. SPRING introduced The Young Entrepreneur Scheme or YES! in October last year, providing $4.5 million of funding to help schools develop entrepreneurship learning contents. Under YES!, we would also fund student ventures with a 4:1 matching ratio.

Conclusion

In entrepreneurship, the government’s role can only be facilitative. The drive, aspiration, ingenuity and business acumen of a successful entrepreneur will have to come from the entrepreneur himself or herself. There are many things we can do to support entrepreneurial undertaking, but we fall short of manufacturing entrepreneurs.

In conclusion, let me say that even in this global economic downturn and with declining demand, there remain opportunities for SMEs, so long as they are quick to adapt and able to seize new opportunities. We would like to hear from you, from the discussion at this forum, your ideas and suggestions on the new ways of doing business and venturing new markets that can propel your business out from recession to recovery.

Thank you.