Mr Teo Ser Luck at the 2013 Enterprise 50 Awards Day Awards Ceremony

OPENING ADDRESS BY MR TEO SER LUCK, MINISTER OF STATE FOR TRADE AND INDUSTRY AT THE 2013 ENTERPRISE 50 AWARDS DAY AWARDS CEREMONY ON 28 NOVEMBER 2013, 11.20AM, EAST BALLROOM, RESORTS WORLD SENTOSA CONVENTION CENTRE

Mr Owi Kek Hean, Deputy Managing Partner, Head of Enterprise Services, KPMG

Mr Alvin Tay, Editor, The Business Times

Mr Tan Chor Sen, Executive Vice President, International, Global Commercial Banking, OCBC Bank

Distinguished Guests

Ladies and Gentlemen  

Good morning.

Introduction

1.           It gives me great pleasure to join all of you this morning at the 2013 Enterprise 50 Awards Day Awards Ceremony, to celebrate the unveiling of 50 of the most enterprising, privately held local companies in Singapore this year.

Creating value to stay ahead

2.           The theme of this year’s awards, ‘Creating value to stay ahead’, is a timely reminder of the need for companies to reshape their business models and focus on value creation as a competitive advantage to stay ahead.

3.           The playing field for businesses has become much more competitive. Globalisation and the emergence of new technologies have increasingly disrupted the competitive advantages of incumbents, and opened up new opportunities for small and nimble businesses.

4.           In addition to changes in the business landscape which have created new opportunities, government regulatory review and improvement has made it much easier to start a business in Singapore. According to the World Bank, the cost of business start-up procedures in Singapore had declined from 1.0% of GNI per capita in 2002 to 0.7% in 2012. This means that it is now easier for new entrants to enter the market, and that incumbents will need to constantly innovate to stay ahead of the competition.

5.           Besides having to deal with competition from other firms, our enterprises are also operating in a challenging environment of manpower constraints and rising business costs. Unit labour costs for the overall economy showed a 3.9% year-on-year increase in 2Q2013, while unit business costs for the manufacturing sector showed a 1.7% year-on-year increase over the same period. In such an environment, it is imperative that our enterprises continue to seek ways to create even greater value and grow their topline, in order to survive and prosper.

6.           Enterprises therefore need to place emphasis on creating and delivering value to their customers, as well as on improving their productivity, in order to stay competitive. It is crucial for enterprises to innovate and differentiate themselves. In this regard, I am pleased to see that the Enterprise 50 Awards recognises enterprises which have successfully created value for their customers.

7.           For example, Dynasty Travel International Pte Ltd relooked at all their customer touch points and has placed greater emphasis on how they connect with their customers. The company’s enhancements included developing mobile apps to interactive touch screens at their customer service counters, even down to the details of how payment can be made and how their marketing collaterals are designed specifically for their audience.

8.           The government supports the efforts of enterprises such as Dynasty Travel which are willing to innovate, upgrade capabilities, and increase productivity in order to create value for their customers, through various forms of assistance. Enterprises can tap government assistance through schemes such as SPRING Singapore’s Capability Development Grant or the Productivity & Innovation Credit scheme to support their development.

The importance of good corporate governance

9.           Beyond the ability to create value, the Enterprise 50 Awards also recognises enterprises on standards of corporate governance.  Many SMEs see corporate governance as exclusively for the ‘big boys’, thinking that unlisted businesses are not accountable to the public since there are no public investors. However, good corporate governance is more than just about accountability. It is also about minimising risks to the enterprise, providing an effective framework for performance monitoring and management, and laying the foundation for sustainable growth of the enterprise.

10.       Enterprises should adopt sound corporate governance principles as a guide for proper conduct and best practices, regardless of their size and type. Although corporate governance would typically be much more structured in a listed company, having some elements of it in its basic form would also help smaller enterprises steer in the right direction.  Starting right is very important, and the value of doing so will become apparent when a company reaches a stage when it contemplates on an IPO. Some notable past Enterprise 50 Awards winners which have benefited from good corporate governance practices and have since gone on to be listed include Valuemax Group Ltd, OKH Global Ltd and Gaylin Holdings Ltd.

Conclusion

11.       SMEs contribute to half of Singapore’s economic output. They are important drivers for Singapore’s economic growth. We need our SMEs to continue to create new value and deliver good jobs for Singaporeans. The government will continue to support these efforts and help SMEs develop capabilities in areas such as corporate governance, through targeted programmes and schemes. So in order to stay ahead in today’s competitive business environment, I would like to urge all SMEs to actively explore means to enhance their value to customers and develop strong business capabilities.

12.       On this note, I would like to congratulate all winners at this year’s Enterprise 50 Awards. You have set an important benchmark for all other enterprises to follow. To this year’s winners, well done and continue to keep up the good work. Let me wish everyone an enterprising and enjoyable day ahead. Thank you.