Mr Lee Yi Shyan at the Hwa Chong Lecture 2007

HWA CHONG LECTURE BY MR LEE YI SHYAN MINISTER OF STATE FOR TRADE & INDUSTRY AT HWA CHONG INSTITUTION ON 2 AUGUST 2007, 1000 HRS

Mr Hon Chiew Weng,

Principal of Hwa Chong Institution,

Teachers and students,

Good morning.

Introduction

I am delighted to join all of you here this morning. It seems like only yesterday that I was a student here, just like you. But since I left Hwa Chong Junior College, three decades have passed in the blink of an eye. Some things have not changed. One of them is Hwa Chong Junior College’s vision – “Live with Passion, Lead with Compassion (己立立人, 己达达人)”. Words to live by. That said, many other things have changed at Hwa Chong – with the merger of the Chinese High School and Hwa Chong Junior College, it is now called Hwa Chong Institution. Just as names have changed, the faces have also changed. But that is hardly surprising. In fact, change is the only constant in today’s globalized world.

"Flat World”

This brings me to the theme given to me by the school this morning, “An Edge in a Flat World”. Let me first touch on “flat world”. Everyone knows the world is round. Christopher Columbus proved it. However, five centuries later, bestselling writer and New York Times columnist Thomas Friedman argues that the world is flat. What Friedman means by “flat world” is that in the process of globalization, the global economic playing field is being levelled.

I can’t help at this point but to also think of the Chinese concept of the world and places: “地方“ instead of”地圆”. They were told they had it wrong but now from the perspective of globalization and a flat world, they may be right and should be credited with much foresight for thinking the world is flat and square! This is one reason why you should study Chinese well and give yourself a chance to appreciate the wisdom in the language.

The idea that the world is being flattened can be a mind-blowing one. For one, it creates profound economic consequences. The modern consumer is no longer constrained by space and time. Take the example of Japanese street-wear label “A Bathing Ape”, popularly known as “Bape”. I was told that many youngsters like you are familiar with it. Do you buy your Bape hoody[1] or chompers[2] from our local shopping malls, or from its Internet store whose operator is several time zones away, but operates 24 hours a day, 7 days a week, 365 days a year? Many other E-commerce sites such as Ebay and iTunes see millions of transactions every day. Today’s consumer has a world of choice open to him.

The flattening of the world has also brought with it diminishing borders between nations. The proliferation of the Internet and rapid advances in telecommunications have accelerated this process even further. Goods and services, people and money, ideas and influences, now move back and forth across the globe effortlessly. Economics textbooks written three decades ago taught us that while goods were traded across national boundaries, services could only be produced and consumed in the same place. This no longer holds true. For example, advances in compression technology now allow for easier, better transfers of CAT[3] scans via the Internet. You may have read that in many small and some medium-size hospitals in the US, radiologists are outsourcing reading of CAT scans to doctors in India and Australia. In other words, anything that can be

Globalization presents Singapore with both opportunities and challenges. I will talk first about the opportunities.

Opportunities

Globalization undeniably brings unprecedented economic opportunities. Over the last half-century, per capita income in developed countries has more than tripled. Developing countries have seen even more dramatic rises. Singapore itself is one of the greatest beneficiaries of globalization. This is because we are able to master the skills and knowledge needed to take advantage of globalization. As a result, we have transformed from a small trading port to a thriving city-state with per capita GDP on par with Western Europe. Fortunately for us, the good times look set to continue.

Traditional markets continue to grow. The US economy is thriving. Japan is finally coming out of years of deflation. Germany is recovering well. Asia, a region where we have the home ground advantage, is growing rapidly, led by China and India. Vietnam, too, is powering ahead and pulling in massive amounts of foreign investment. Less familiar markets like Russia, Latin America and the Middle East may still feel exotic, but by the time you enter the workforce, the new hot city to work in may be Abu Dhabi, Moscow and Mumbai, rather than Shanghai. External factors remain conducive for growth.

Challenges

But while globalization brings clear economic benefits for those who are agile and prepared, it also brings less rosy social and political side-effects to those who are not organized to change or having the capacity to learn. We need to understand these issues to manage and mitigate the resulting challenges while seeking the benefits of globalization.

One of the challenges is the question of keeping our citizens rooted in Singapore, even as they live, work and play abroad in increasing numbers. In less than two decades, the number of overseas Singaporeans has grown four-fold from 36,000 to 143,000. While it is good that our citizens are so cosmopolitan, it could also cause problems for Singapore. Our small population means that we cannot afford to have our top talents leave the country. Unlike countries with large populations, Singapore does not have the luxury of spreading our top talents among the public and private sector. If all our best and brightest go out to make their mark on the world, who will be left to man the fort here? And if they decide not to come back, what will become of Singapore in the long term? Of course it is good to have some overseas exposure, widen your horizons and beef up your resume. But it is also a huge challenge for us to keep overseas Singaporeans connected to home, so that our sizeable overseas population becomes a strength rather than a weakness.

Another challenge of globalization is the growing income inequalities. Even as China and India become synonymous with unparalleled growth, there are still 1.9 billion Asians living on under S$3 a day. The faster the region grows, the bigger the gap between the rich and the poor. In Singapore too, we face a widening income disparity. Our lowest-paid workers have seen little or no increase in their wages over the last few years, though this has begun to change since 2006, following the upswing in the economy. Technology, which is a key driver of globalization, pushes up demand for highly skilled workers, but makes the low-skilled workers redundant. We will need to manage the income divide, or it can lead to tensions and dichotomy between the haves and have-nots.

The third major challenge concerns security. As we grow more interconnected, we become increasingly vulnerable to terrorist attacks. An attack in one city can have an impact on people living halfway across the globe. Most of our modern production is based on supply chains that span oceans and continents. A disruption at any point in this network would have widespread implications. Globalization has also allowed terrorist groups to organize themselves better, widen their reach and harness more resources than ever before. Al Qaeda’s global network rivals that of large corporations. I am sure you have heard of its branch in Southeast Asia – the Jemaah Islamiah. Terrorist groups are often early adopters of technology, and they use it to great effect, whether in training their group members, transferring huge sums of money, and even orchestrating terrorist attacks. We need to always keep one step ahead of them.

"Edge”

We have seen that globalization presents both economic opportunities and social challenges. So what should we do to succeed in a globalized world and make the most out of its opportunities? How do we stay ahead of challenges? How do we create an “edge” over our competitors?

First, what do I mean by “edge”? Perhaps for today’s discussion, we could define “edge” as a position of advantage and strength. Former CEO of General Electric (GE) Jack Welch defined leaders with the right “edge” as people having the quality and ability to make correct or superior decisions given a difficult or complex situation. The best leaders are distinguished by a sharp “Edge” in decision-making. This edge quality in turn is derived from high intelligence, deep subject-knowledge and strong business acumen. Jack Welch adopts “edge” as one of his 4 “E[4]” leadership selection framework. Think about this “edge” quality for an individual, and for a nation.

Can intelligence be gained? Can knowledge be acquired? Can acumen be developed?

National Level

At the national level, we are constantly seeking new ways to maintain our competitive edge in the global stage. I will cover four key areas today. First, we are investing in R&D to move our economy up the value curve. We plan to invest 3% of our GDP on R&D annually by 2010, up from 2.4% in 2005. This will help develop Singapore into a leading Asian hub for high-value, knowledge-based industries, even as Beijing, Bangalore and other cities catch up. Second, we are making Singapore the best place to start, grow and globalize businesses. Our strength and reputation as a base for MNCs and leading global companies is well-known around the world. We will make Singapore equally reputed for being the best place for SMEs, local and foreign, to locate, grow and globalize. Third, we are making Singapore a center for high trust services, such as legal and financial services, which capitalize on Singapore’s strengths. Fourth, we are investing heavily in economic infrastructure, such as IT connectivity, to support our activities.

These are our investments in creating the infrastructure for distilling experience, acquiring knowledge and building insights and acumen.

Individual Level

At the individual level, for young people like you, what can you do to gear up for the globalized world? There are broadly three attributes you should endeavor to develop.

First, it is an appreciation of the world, the larger environment we live in. It is understanding Singapore’s roles and place in a dynamic and globalized world. It is a view of things not in isolation, but in the perspectives of both space and time. While many of you can relate Singapore’s geography in relation to the world, some may be less attuned to see Singapore as a life chapter in the perspective of history, a continuum of human evolution and national history.

Such a time perspective is important, to help us know why countries rise and fall, why people unite or went into disarray, why societies succeed and nations go to war. It is with this sense of a Singapore within a larger system that will help sharpen our instinct of survival and self-renewal.

Secondly, it is pretty clear that you need to equip yourself with the scientific knowledge and language facilities to succeed in a globalized world. Knowledge decides how much value-add you can provide in the world of commerce and trade, language decides how well you communicate with and connect with the rest of the world. Singapore’s economy has had a good ride over the past 40 years because we have in place the infrastructure for knowledge creation, transmission and utilization. The challenge for the next generation is to maintain the momentum from here, in the face of new forces, such as the rise of China and India. Your mission as the future leaders of Singapore is to be committed to reinvention and innovation. Once again, knowledge is at the forefront.

Thirdly, you ought to realize that you are amongst the top 5% of the population, in terms of academic excellence, and you are most likely to rise to various leadership positions in government, public service, industry, commerce and society. In a sense, the country has created the environment to bring out the best in you, so that you can in turn lead your people into a brighter future. Leadership is a quality which academic instruction alone cannot nurture. What are the responsibilities of leaders? A leader should aspire to make a difference to the lives of people around him, and ultimately to leave a legacy when his time is up. A true leader seeks not to advance narrow or egoistic self-interests, but to serve humbly for the collective good of his followers. In short, an outstanding leader is someone with a selfless sense of duty.

Many of you are already in positions of leadership; many more will take on leadership roles in time to come. Hold fast to your values, and remember to lead with empathy and compassion. Once again, Hwa Chong’s philosophy comes to mind. “Live with Passion, Lead with Compassion”. Whether the hallmark of leadership will be passed on through the generation of Hwa Chong students will ultimately depend on the ingenuity and hard work of teachers and students.

Conclusion

On this note, I hope that Hwa Chong students will learn to give back to society what they have received and benefited from. New generations of Hwa Chong students ought to be imbued with the same spirit of resilience, steadfastness, strength and vision that the old students had so as to bring Singapore to greater heights in the context of a flat and globalized world.

Thank you.

[1]Hooded sweatshirt
[2]Shoes
[3] The CAT (Computerized Axial Tomography) scan, also known as the CT (computed tomography) scan, is an x-ray technique that produces a film representing a detailed cross section of tissue structure.
[4] Energy, Energise, Execution and Edge.