Mr Teo Ser Luck at the 14th SME Conference

​Speech by Mr Teo Ser Luck, Minister of State for Trade and Industry at the 14th SME Conference at 9:15 a.m. on Thursday, 23 August 2012 at Suntec City Convention Centre

Conference Theme: “Crossroads and Choices – Game Plan for the New Decade”

新加坡中华总商会张松声会长

总商会的董事们

女士们、先生们

大家早上好！

很高兴今天受邀出席第14届中小型企业大会。首先，祝贺新加坡中华总商会再次成功举办这个大会。多年以来，中小型企业大会已经发展成国内外商家共同期待的大型活动。

不稳定的世界局势

目前，美国和欧洲的经济局势仍然不明朗，中国和印度经济增长的脚步也在放缓，影响了我国经济增长的速度。今年下半年的经济增长预计会比往年低，介于百分之1.5到2.5之间。虽然如此，亚洲的内部需求预计还会保持强劲，加上中产阶级人数的增加，将为企业带来更多商机。尽管整体经济增长放慢，国际货币基金组织（IMF）预测，2012年的亚洲经济将可以取得百分之7.1的增长。商家们只有不断加强自身实力，提高创新能力和竞争力，才能把握商机。

今天的大会吸引了超过2000人出席。这显示我国企业已在不断互相学习，以便在经济全球化发展的过程中，优化商业策略，寻找合作伙伴。

接着，让我用英语继续演讲。谢谢!

Supporting SMEs

The Government, in consultation with industry partners, has provided various assistance programmes to support SMEs’ upgrading efforts. I am glad to note that in the recent joint survey by SCCCI and the Nanyang Technopreneurship Centre of NTU, it was found that more than 75 per cent of the companies which had tapped on government assistance schemes found them relevant and beneficial. One example is the Innovation and Capability Voucher (ICV in short), which SPRING launched in June this year to encourage smaller companies to take first steps to enhance capabilities. More than 350 applications have been received for projects in the areas of Innovation, Productivity, Human Resource Development and Financial Management over a two-month period. 

With the heightened need to raise productivity amidst a tighter labour market and higher business costs, SCCCI’s survey also highlighted that training-related schemes and the Productivity and Innovation Credit (PIC) scheme were well-received among the SMEs polled. More than 30,000 SMEs benefitted from tax claims from PIC in the Year of Assessment 2011. We also see that the adoption of IT to streamline business operations and raise labour productivity has been actively pursued by SMEs. More than 1,300 SMEs applied and used iSPRINT for this purpose in 2011. I am heartened to see our SMEs take steps to improve productivity and build up their capabilities.

However, our global environment is constantly evolving. Externally, regional competition is intensifying, as new markets such as Myanmar are opening. Internally, we are also facing constraints in our resources, particularly in how we can grow our land and labour. As our companies strive to meet these challenges and seize new opportunities, the Government will ensure that our support for our companies – especially our SMEs – continue to remain relevant. I assure all that we remain committed to supporting the growth of our local SMEs.

SME Review

I have thus asked SPRING Singapore and IE Singapore to initiate a holistic review of our SME strategies, taking into account the changes in the global and domestic environment since the Economic Strategies Committee (ESC) recommendations were put forth in 2010. What is certain, amidst all the volatility and caution, is that SMEs will continue to be critical to Singapore’s economic growth. SMEs are big contributors to our GDP and big creators of jobs – providing 50 per cent of Singapore’s GDP and 70 per cent of employment. In addition, SMEs are crucial to the Government’s aim of achieving sustainable, inclusive growth – providing jobs for all Singaporeans, from budding entrepreneurs to rank-and-file workers and managers. We have seen many of our SMEs grow from small enterprises into large globally-competitive companies, and the ESC set an aspirational target to double the number of local enterprises with revenues of over $100 million to 1,000 by 2020. In the years ahead and many beyond, SMEs will continue to be the backbone and the lifeblood of our economy, and we expect their importance to grow.

Increasingly, our SMEs are also flying the Singapore flag across the world. Local champions such as Scanteak have made Singapore proud with its strong global market footprint. Other than being a well- known brand in Singapore, Scanteak has over 60 stores in Taiwan, Japan, and franchisee-operated stores in Canada and Brunei. Scanteak also made its foray into China recently, leveraging on the Sino-Singapore Tianjin Eco-City project. Another example is Envipure, an environmental solutions provider. Besides having partners and subsidiaries in Sri Lanka, China, Malaysia and Indonesia, the company has set up environmental treatment systems in countries as far as Saudi Arabia, Papua New Guinea and Italy. These SMEs are engaging in higher-value activities and have become regional and global players. A 2011/12 Internationalisation Survey conducted by IE Singapore showed that overseas revenue accounts for 74 per cent of total revenue among the companies surveyed, which included SMEs. This is an encouraging find, and we want more of our SMEs to become our local champions overseas.

The SME Review started in April and is still ongoing. The team has been meeting with members of the industry to obtain feedback and suggestions, as well as studying the SME development models in other economies. In particular, I have asked the team to focus on a few key areas in the review.

First, we must ensure that our schemes are simple and accessible to all SMEs. We should not expect SMEs to jump through too many hoops before they can access the Government’s support. Nor should we expect them to navigate a long list of schemes to find help. We aim to simplify government assistance in two main areas – streamlining of schemes and simplification of application processes. This means restructuring our schemes to a few simple ones that can still serve business needs. Furthermore, we will work on simplifying application and grant disbursement processes to enable fast and more efficient responses to business needs. For example, to make it easier for SMEs to tap on ICV, I am happy to announce that by next month, SMEs will be able to apply for the $5,000 ICV voucher online. This means no more paperwork and hardcopy submissions for the SMEs. SMEs can apply anytime, at their convenience, and upon successful application, they will receive approval two days after completing the online submissions. We hope that this will encourage more SMEs to tap on our schemes to build up their capabilities and enhance their productivity.

We also know that small and micro-enterprises require more help in accessing our schemes.  We will study how to better reach out to this segment of SMEs so that they too can enjoy the benefits of capability upgrading.  

Next, we will intensify efforts to help SMEs strengthen their capabilities in innovation and branding. This is critical in helping SMEs differentiate themselves from their competitors, especially when they expand overseas. Given our operating environment, our companies cannot compete on price alone. We need to examine how to help SMEs better integrate design and innovation strategically into their business operations. This will improve quality and performance, and differentiate a superior product from the others in the market. We will take a look at whether existing assistance schemes in these areas are sufficient and have benefitted companies, and whether there are any gaps that need to be filled. 

Beyond this, we also need to do more to enhance SME’s capabilities to enter overseas markets. Singapore is a small country, and this means that our SMEs must think global at an early stage if they want to grow and be globally competitive. They must explore the vast potential of emerging markets. For example, IE Singapore’s Internationalisation Survey has found that 75 per cent of SMEs have a presence in Southeast Asia, and about 30 per cent in China. SMEs are also engaged in other regions such as Europe, India and the Middle East. For those at the initial stages of internationalisation, IE Singapore has in place initiatives such as a programme focusing on exports, which includes workshops and clinics to help SMEs navigate the basic issues on exporting, building up their capabilities and developing the right strategies to export sustainably. As they progress, IE Singapore helps them access opportunities in other markets, build up the capabilities required for internationalisation, and provides access to financing for overseas expansion.

Despite the assistance available, we know that many SMEs still face difficulties internationalising. This could range from difficulties in finding business partners and sourcing for business leads, to unfamiliarity with the legal and regulatory environment overseas. This review will thus look at how we can better support our SMEs in international markets.

Besides these areas, we are also exploring other ways to accelerate the growth of our SMEs. We will continue to consult with various stakeholders and businesses for more ideas on how we can do so. We welcome any suggestions from businesses, and aim to present the review findings at Budget next year.  

Need for Industry, SMEs and Government to Work Together

The efforts of the Government alone never enough. To ensure success, the industry associations, businesses and the Government need to work hand-in-hand. We will continue to work with our Trade Association and Chambers such as SCCCI because they understand the needs and the pulse of the business community. Their contributions to the business community are commendable, and I am glad that they continue to extend and improve their services. I am pleased to note that the SCCCI is working with overseas experts to bring in more Mandarin-speaking productivity consultants to help local businesses owners who are more comfortable in using Mandarin. The setting up of SCCCI’s Shanghai office, EDC@Shanghai has also helped many of our SMEs tap the China market and seek potential partnerships in the country.

Conclusion

The theme for today’s Conference is “Crossroads and Choices – Game Plan for the New Decade”. In this year’s National Day Message, our PM outlined the need to create a Singapore for our future and I quote “Today Singapore is a success story, but the world is not standing still. The next two decades will be very different. The emerging economies in Asia are advancing rapidly. Breakthroughs in science and technology will transform our lives. Singapore will encounter many new challenges and opportunities.”

This aptly describes what the Conference theme is all about – the need for our enterprises to build a sustainable future for their business, amidst a more challenging and competitive economic landscape, coupled with internal constraints. I hope that you will learn from each other and be inspired to strive for the best.

Thank you and I wish you a fruitful day ahead.

--------------------------------------------------------------------------------------------------------------------------- 

ANNEX 1

Mr President Teo Siong Seng, Singapore Chinese Chamber of Commerce and Industry,

Council Members,

Distinguished Guests,

Ladies and Gentlemen,

Good Morning.

I am delighted for this opportunity to speak today at the 14th SME Conference. This signature annual Mandarin Conference has become a much anticipated event by both local and overseas business communities. Congratulations to the Singapore Chinese Chamber of Commerce and Industry (SCCCI) for organising this.

An Uncertain World

The current uncertainties in the US and Europe, coupled with the slowdown in China and India, will undoubtedly have an impact on Singapore’s economy. Our GDP growth is projected to be between 1.5-2.5 per cent for the rest of 2012, lower than in previous years. Nevertheless, pockets of opportunities remain. Domestic demand is expected to remain resilient in Asia, and the rise of a large middle class provides good opportunities for our companies. Notwithstanding overall slowdown, IMF has predicted that the economies of developing Asia will expand by 7.1% in 2012. Our companies need to step up efforts to innovate, upgrade their capabilities and bolster their competitiveness so as to take advantage of these opportunities. 

Therefore, I am glad to see such a strong turnout this morning, with some 2,000 participants. It shows that our companies are keen to learn from each other so as to further their business strategies and seek partnerships amidst this global economic situation.