Mr Lim Hng Kiang at the 6th Ace Bluesky Festival, 10 Jul 09

OPENING ADDRESS BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY AT THE 6TH ACE BLUESKY FESTIVAL ON FRIDAY 10 JULY 2009 AT 10.40 AM AT THE RITZ CARLTON MILLENIA SINGAPORE

Members of the Action Community for Entrepreneurship

Ladies and gentlemen

Good morning.

I am happy to join all of you at today’s 6th Blue Sky Festival. At this annual meeting of entrepreneurs, I am glad to see so many like-minded entrepreneurs and business leaders here. In the current economic uncertainty, it is even more crucial that we continue to get together to network and learn from one another in order to overcome the common challenges we face.

The Role that Entrepreneurs Play

Over the last decade, we have increased our efforts to promote entrepreneurship, which was one of the key recommendations of the Economic Review Committee of 2003.From just 70,000 in the 1980s, SMEs now constitute 99% of the 160,000 enterprises in Singapore. In a new study by the Department of Statistics, it was found that SMEs contribute significantly to the Singapore economy, employing nearly six out of every ten workers. This means a total of some 1.5 million jobs.

In terms of value-added, the SMEs have increased their contribution from 46% in 2003 to 49% in 2007.In other words, half of our GDP comes from SMEs. Our entrepreneurs may be found in diverse sectors, such as wholesale and retail trade, food & beverage, business services and manufacturing, being some of them.

The Achievements of ACE

ACE, the Action Community for Entrepreneurship, was formed to drive local entrepreneurship as an important growth strategy. Over the past six years, ACE has helped us to cut red tape, and more importantly, helped to transform the Government into one with a more pro-enterprise mindset. This has helped to level the playing field for small enterprises and start-ups, as Dr Antony Ng mentioned earlier. In addition, ACE has worked with banks and the venture capital community in Singapore to provide more financing options for SMEs and start-ups. ACE has also spread the spirit of enterprise amongst our youth, and created platforms for entrepreneurs to network, and be recognized. I commend ACE for your efforts and achievements.

Besides nurturing a pro-enterprise environment, ACE has worked with the Government and provided useful feedback to help us roll out various measures to assist SMEs to access capital, build capabilities, and establish market connections.

The feedback provided is important and valuable to us. When the Government rolled out the enhanced financing schemes late last year, such feedback helped us to further refine the schemes in a timely manner and in line with the economic climate, to make them more useful and relevant to businesses. In the first half of this year, we approved more than 7,300 loans amounting to $4 billion. This is four times the total loan value approved for the whole of last year.[1] Of these, more than 90% of loan approvals have been given out to SMEs and 65% of the loans have gone to smaller businesses with less than $5 million in annual turnover. Commercial lending to both big and small companies is now reviving, since the roll out of the Government initiatives in December 2008. The participating financial institutions expect the number of loans approved to stabilize but with more loans going to smaller companies from now on.

Singapore’s enthusiasm and efforts in growing enterprises have not gone unnoticed. When The Economist did a Special Report in March this year, Singapore was mentioned alongside Israel and Denmark to illustrate how entrepreneurship can thrive in different countries. The report described our pro-business efforts as “[doing] everything in its power to make life easy for entrepreneurs” and cited how we have earned the honor of being number one in Government policies that support innovation and entrepreneurship.

Building an Entrepreneurial Culture

This does not mean we can rest on our laurels. Having a pro-enterprise and nurturing environment for promising entrepreneurs is only the first step to setting a foundation for growth. We need energetic people with good business ideas to step forward and take up the challenge of being an entrepreneur.

Mr Yeo Poh Seng, for example, had worked for over 20 years in the telecoms industry, holding management positions first in two listed companies here, and then as the CEO of an internet telephony company in Indonesia. As an employee, Poh Seng was responsible for developing internet communications services. He saw the business opportunities presented by the convergence of IT and telecoms technologies in the development of the internet during the early part of this century, and decided to set up his own company, Asiatel, together with a few ex-colleagues to ride this wave of change. Asiatel now employs 14 people and earns a revenue of $3.5 million. Its business has expanded to cover Malaysia, Thailand and the Philippines.

Another example is that of Ms Pranoti Israni.Pranoti was working with an MNC here, where her job involved innovating and designing new home appliances. Then she spotted an opportunity. She noticed that the 800 million Indians who ate chapatti daily as their staple had to depend on their mothers and wives to make the chapattis by hand. They did not have the equivalent of a rice cooker. So she left the MNC, and set up her own company, Zimplistic, to design and create a chapatti-maker. About a month ago, her team won the top prize in the ‘Start-up at Singapore’ competition.

Poh Seng and Pranoti have become entrepreneurs. How can we encourage more Singaporeans to be like them, and how do we increase their chances of success?

The entrepreneurial mindset needs to be cultivated from a young age. SPRING rolled out the Young Entrepreneurs Scheme for Schools, or YES! Schools, to cultivate an enterprising mindset among youths through structured, hands-on, entrepreneurship learning programmes. I understand some 22 schools have been supported under the scheme, and they will reach out to 6,000 youths through their programmes. We hope that through YES! Schools, we will raise many future generations of entrepreneurs, who would be equipped with innovation and entrepreneurship skills.

For start-ups, ACE and SPRING have actively roped in many partners to help nurture them, from the institutes of higher learning and schools to the financial community. Programmes so far include the Young Entrepreneurs Scheme for Start-ups or YES! Start-ups which help youths fund their first innovative ventures, the Technology Enterprise Commercialization Scheme or TECS to help start-ups transform their technology ideas into technology enterprises, and SEEDS equity funding to help them grow their business. We have also supported a number of incubators and venture accelerators under the Incubator Development Programme to mentor our start-ups and help them grow.

Equipping Mid-Career Entrepreneurs

I am very encouraged that despite the economic downturn, the number of start-ups formed has not dipped over the past few months. Perhaps, the weaker job market has even prompted more entrepreneurs to seize the opportunity to set up their own businesses.

To this end, ACE and SPRING have been working with the polytechnics to develop entrepreneurship training courses specially-tailored to equip ex-employees in the PMET sector (the professionals, managers, executives and technicians) to start their first business ventures. The courses are expected to commence in August and September.

Conclusion

We continue to be inspired and excited by the many bright business ideas sparked off by our entrepreneurs. Some of them will hopefully grow into successful large enterprises. Meanwhile, let us work together, the Government with the private sector, to continue to cultivate and nurture our SMEs and start-ups.

I hope you will find this conference useful, and a good platform to seek and form partnerships for business collaboration. I wish all of you here an enjoyable and fruitful conference.

Thank you.

[1]$1.03 billion worth of loans were approved in 2008. In June 2009, 1,496 loans were approved, with a total loan quantum of $795 million.