Mr Lee Yi Shyan at the ACE BlueSky Conference

Welcome Address by Mr Lee Yi Shyan, Minister of State for Trade and Industry and Minister in charge of Entrepreneurship at the ACE Blue Sky Conference on 17 July 2008, 9.15am at Raffles Ballroom

Prime Minister Lee Hsien Loong,

Distinguished guests,

Ladies and Gentlemen.

A very good morning to all.

Introduction

The Blue Sky Festival is an annual event organized by the Action Community for Entrepreneurship, or ACE, to celebrate entrepreneurship and to recognize the role of entrepreneurs in Singapore’s economic development. This year, our celebration is special, as it also marks the fifth anniversary of ACE.

ACE and its Achievements

In the past five years, the importance of entrepreneurship has taken on a larger mindshare in business community, research institutes, financial institutions, universities and schools. We are also seeing more and younger entrepreneurs, pursuing entrepreneurial dreams in knowledge-based start-ups. Parents and students are receptive to entrepreneur pursuits as alternatives to comfortable jobs in professional positions.

This sea-change in mindset is the result of the work of many in our society. ACE is fortunate enough to have played an integrator and catalytic role in four areas.

Culture & Education

The first area is about changing mindset and culture. The Culture Action Crucible, led by Elim Chew and Antony Ng, worked tirelessly and conducted 150 seminars and workshops in reaching out to 32,000 students of all ages. Some schools and polytechnics now provide shop fronts run by their students while others conduct business plan competitions to familiarize students with parameters of running a business.

At the tertiary level, entrepreneurship-related modules have been introduced at undergraduate and post-graduate levels. In classrooms, students learn about business functional skills such as marketing, human resource and financial management. Outside the classrooms, experiential learning takes the form of shadowing CEOs of start-up companies in Singapore and overseas.

We do not know when a student might decide to pursue an entrepreneurial dream. But if we can sensitize and equip them adequately about the risk-rewards of being an entrepreneur, some of our brightest might just take the plunge when opportunities present themselves. ACE believes that developing entrepreneurial traits in our young has unquantifiable long-term value to the individual and society.

Our growing pool of promising start-ups is not limited to Singaporeans alone. At my recent visit to NUS incubator, I met Stanley Han, a 27-year-old Singapore PR from China and founder of Personal E-Motion. His company developed an interactive online publishing platform so simple that even a 6-year-old child can be taught to use it to create interactive e-books by integrating video, 3-D, flash, animation and other multimedia. Using the KooBits Authoring software, young authors can in real-time tell stories, publish e-books, share resources, build communities, and even sell their digital books worldwide through the Koobits portal. Maybe some time in the near future, we could have our versions of Harry Potter and Gong Fu Panda.

Improving Access to Financing

Now let me move on the second area - access to finance. Consider the case of Mr Mohan Mulani, CEO of Harry’s Holdings. Since 2006, he has expanded his F&B outlets from 16 to 33 and more than doubled his revenue. He has been able to do so largely because of the $5-million capital he has raised through the Over-the-Counter (OTC) Trading Platform operated by Phillips Securities. This form of fund-raising would not have been possible five years ago.

The ACE Finance Action Crucible, led by Mr Inderjit Singh worked single-mindedly to increase the financing options available to start-ups and small businesses. His team worked closely with SPRING Singapore and financial institutions to launch various initiatives to plug the existing gaps. Thanks to the team’s lobbying to amend the Securities and Futures Act, the OTC was established by Phillip Securities to allow for private equity trading. SMEs can now have alternative means to raise funds without paying high fees or laboring on a prospectus. To-date, $11 million has been raised through the OTC platform.

Responding to feedback from small business and start-ups, the Government has rolled out a range of initiatives to help our entrepreneurs grow their businesses. SPRING’s $110-million Start-up Enterprise Development Scheme (SEEDS) and Business Angel Scheme (BAS) are aimed at helping start-ups raise funds, while the $50-million Technology Enterprise Commercialization Scheme (TECS) supports the commercialization of high-tech Intellectual Properties. The National Research Foundation (NRF) is also contributing to entrepreneurship by investing $350-million into driving innovation and enterprise in Singapore. A*STAR, on the other hand, has established EXPLOIT to accelerate commercialization of R&D results.

We have also enhanced our tax environment for start-ups greatly. As announced by Finance Minister earlier this year, start-ups investing a significant amount into R&D can now convert losses into cash grant of up to about $20,000[1]. Collectively, through these efforts, we want to create a supportive environment for high-growth, scalable start-ups to multiply and grow.

Liberalizing Rules

In recent years we have seen innovative ideas like the Duck Tours, table-top advertising in food centers, even hot-air balloons here in Singapore. Many of them would not have taken off – literally, if not for willingness to rule change by the agencies involved.

Led by Mr Patrick Daniel (of SPH), the Rules Action Crucible works closely with the Pro-Enterprise Panel (PEP) to actively solicit feedback on rules and regulations that hinder businesses and stifle entrepreneurship. One company that benefited was Dade Behring. This company deals with diagnostic-test kits, and works with controlled drugs that have to be licensed. Previously, Dade Behring used to require one license for every product consignment. With the help of the Rules Action Crucible, the company now only needs one instead of multiple licences. This has helped save the company much time and costs.

Over the past five years, the Rule Action Crucible worked with the Pro-Enterprise Panel to review 1,600 suggestions for rule change and accepted about 800 of them. ACE continues to welcome and invite suggestions from start-ups and small businesses. Through rules reduction, simplification and elimination, ACE hopes to reduce compliance costs for small businesses and hence, enhance the operating environment for start-ups. Tomorrow, ACE will also honor the top 10 government agencies that provide the most business-friendly services and support to businesses.

Promoting Internationalization

The fourth area of ACE’s work is to help small businesses scale up their operations to a level that they become self-sustaining.

Muvee Technologies, a start-up with a software that allows novices like most of us here, create professional movies in 3 easy steps, has captured 30% of global market share with customers such as Nokia, Dell, LG and Fujitsu. If you use a digital camera or mobile phone to edit videos, chances are, you may be using a muvee’s product. Muvee’s CEO, Terence Swee is helping out younger start-ups by offering them office space and mentoring their businesses.

The ACE Internationalization Action Crucible, led by Mr Wong Ngit Liong (from Venture Corporation) and Mr Richard Eu (from Eu Yang Sang International), now focuses on mentoring more young companies and links them up with markets and investors. The Internationalization Action Crucible is also recruiting more entrepreneur-mentors into their team.

The public-private sector partnership model.

As a collaborative movement, ACE is unique. It draws on the free-wheeling spirit of enterprise, and supports it with organizational resources of the government for alignment and synergy. The result is an effective partnership between the public and private sectors in creating a supportive environment for enterprise.

ACE’s achievements in the past five years could not be due to the efforts of a few. In fact, many entrepreneurs and volunteers have given much of their time and resources because they believe in ACE’s vision.

On this occasion of ACE’s 5th anniversary, I would like to acknowledge the contributions of ACE pioneers, and thank Minister Raymond Lim and Minister Vivian Balakrishnan, as the first and second ACE Chairman respectively for their leadership and for building the strong foundation we see of ACE today.

I would also like to specially thank our Prime Minister for gracing this occasion. Your presence and support are indeed a strong encouragement for all of us in ACE that much more can be achieved in the next five years in creating a more entrepreneurial Singapore.

Last but not least, I would like to thank you, all of you in the audience and our supporters out there, for your participation and contributions. Together, we can build a vibrant community of entrepreneurs and partners.

Ladies and gentlemen, please join me now to warmly welcome Prime Minister Lee on stage to address us. Prime Minister, please.

[1] Start-ups that have yet to make taxable profits within their first three years can convert up to $225,000 of the company’s losses that arise from tax deductions for R&D which the company does in Singapore into cash grants of up to $20,250 from the Government. The start-up company needs to incur at least $150,000 of expenditure on ongoing R&D done in Singapore for each year.