Mr S Iswaran at the ST Electronics National Day Observance Ceremony

SPEECH BY MR S ISWARAN, SENIOR MINISTER OF STATE FOR TRADE AND INDUSTRY, AT THE ST ELECTRONICS NATIONAL DAY OBSERVANCE CEREMONY ON 5 AUGUST 2008 

Mr Seah Moon Ming, President, ST Electronics,

Distinguished guests,

Ladies and gentlemen,

I am happy to join you today at ST Electronics’ National Day Observance Ceremony, to celebrate our nation’s 43 years of Independence.

The evolution of ST Electronics is in many ways a typical Singapore story.From your humble beginnings in 1969 as an electronics maintenance company, ST Electronics has developed into a top tier international Information Communication Technology (ICT) company with high end technical capabilities and solutions catering to your clients’ sophisticated needs.Today you have a global footprint with offices in more than 18 countries (including Australia, Botswana, China, Hong Kong, India, Kazakhstan, Malaysia, Mexico, Taiwan and the US) and your customers come from over 70 countries.

I am delighted to note that ST Electronics was the first ICT company in Singapore to achieve a turnover of $1 bil in 2007.It is a milestone accomplishment in a highly competitive industry, and a tribute to the management and staff of ST Electronics.

Economic Outlook for Singapore

This year, we celebrate National Day against the backdrop of an uncertain global economic outlook.Singapore’s economy grew by 4.3% in the first half of this year.This is within our medium term potential rate of growth of 4-6% based on the latest GDP advance estimates. Our job market remains healthy with more than 70,000 jobs[1] created in the second quarter of the year.The unemployment rate also remains low. 

The information and communication services industry grew by 6.7% in the first quarter of the year.Theinfocom sector is a key contributor to our economy which has greatly enhanced our competiveness by raising productivity and transforming business processes.

Challenges Ahead

The momentum of economic growth has recently slowed and the global economy is expected to remain soft in the second half of 2008. In the US, there are significant vulnerabilities in the financial sector.And, the other major developed economies like Japan and Germany also expect to see further softening, as they are confronted with the challenges of high oil prices and weak consumer confidence.

In Asia, on the other hand, economic growth has been fairly robust. China’s GDP grew by 10.6% in the first quarter of this year, while India’s GDP grew by 8.8%. But both China and India are facing record levels of high inflation and have started to take steps to contain inflationary pressures.These in turn could dampen growth.

The global marketplace is becoming more challenging with shorter product life cycles and eroding margins.To meet these challenges, ST Electronics will have to continue expanding your competencies and capabilities by investing in research and development and developing new products and solutions.In an increasingly competitive environment, it is important to carve out niche markets for yourself in order to stay ahead.

The people behind ST Electronics will also need to continually build on your capabilities to meet the new challenges and stay relevant to your customers changing needs.I understand that ST Electronics has training programmes for its engineers to excel in core skills such as master planning, system architecture and project manage­ment.I urge you all to seize these opportunities in order to upgrade your skills and add value to yourselves and your organisation. 

The Tripartite Partnership in Labour Management

I am heartened to note that ST Electronics regards its people as the organisation’s most important asset.Indeed, this is not just a slogan but a fundamental mindset which every company should embrace.In that regard. besides opportunities for training and skills upgrading, good labour management relations are key. In Singapore, we have enjoyed harmonious industrial relations over the past three decades. The foundation of this success is a strong tripartite partnership between the government, unions and the employers. This strong nexus between the three partners is based on trust, mutual respect and open communications. Our unique model of tripartitism is one of the critical contributory factors in our economic development. This strategic partnership must continue to be nurtured and should not be taken for granted.

A good example of tripartitism at work is the introduction of the inclusive Workfare programmes by the government, to supplement the wages and savings of older low-wage workers.It is based on the principle that the best way to help people is to help them find work and stay employed.Workfare provides more incentives for individuals to work, and for employers to hire them.With Workfare, the Government is stepping in to share the burden of social support with the individual and his employer.We need more of such creative tripartite efforts – with labour unions, employers and government working together - to sustain the employability of Singaporeans and to enhance the competitiveness of our companies in a complex environment.

Conclusion

Let me conclude by commending ST Electronics on your sterling achievements.The company has done particularly well over the past year, with the various business groups securing a number of major contracts.I have every confidence that you will scale even greater heights with the collective effort of the management and staff of ST Electronics.On that note, I would like to wish one and all good health, success and many more good years ahead.

Happy National Day.

[1] MOM’s preliminary estimate