Mr Teo Ser Luck at the 4th EDC Conference

Speech by Mr Teo Ser Luck, Minister of State FOR Trade and Industry at the 4th EDC Conference at 9.00 a.m. on Wednesday, 28 March 2012 at HDB Hub Auditorium  

Distinguished Guests,

Ladies and Gentlemen,

Good Morning.

Thank you, Mr Narayanamohan for the warm welcome.  It is my pleasure to join you at the fourth Enterprise Development Centre (EDC) Conference today. Let me congratulate the Organising Committee and the five EDCs for organising this Conference.

Introduction

The theme for the Conference “Go, Grow, Globalise – Staying Competitive in Challenging Times” is apt, given the current uncertain economic outlook and challenging business environment.

The forecast for Singapore’s GDP growth for 2012 is estimated at a low 1.0% to 3.0%.  The current economic weakness in Europe, Japan and the US will impact our small and open economy.  A silver lining lies in Asia, where growth is still strong.

Locally, we face a tighter labour market and rising business costs.  In order to fuel and sustain growth, SMEs need to upgrade and re-structure to be more productive, rather than depend heavily on increase in factor inputs.

Increased Outreach to SMEs

We recognise that SMEs need help to make this transition to create innovative products and services, upgrade skills, design better jobs, leverage on technology, and find new markets overseas.   The Government is committed to support SMEs in their upgrading efforts.  SPRING will intensify its outreach to SMEs to help them understand how they could tap on government assistance programmes to raise productivity.

This will be done in partnership with the Trade Associations and Chambers (TACs).  The five EDCs will step up their one-to-one business advisory services for SMEs. Through these channels, SPRING hopes to reach out to more than 20,000 SMEs annually in Singapore.

Talk to a Business Advisor at the EDCs -- It’s Free!

To elaborate, the EDCs were set up in 2005 to provide free business advisory services to SMEs, start-ups and aspiring entrepreneurs.  Any SME can approach the EDCs for help.  Over the last six years, the EDCs have assisted some 60,000 SMEs.

An SME that has benefitted is NewCastle Learning Centre Pte Ltd.  Founded in 2003, Newcastle Learning provides educational lessons from primary to tertiary levels; with outlets at five locations.  Acting on advice from EDC@ASME, it embarked on an Office Automation project and received a $60,000 grant from the Inclusive Growth Programme (IGP). The project enabled student records, payment and reports to be collated efficiently through internal system which could be accessed by all relevant personnel, reducing the need to seek manual updates from different departments. With this in place, work efficiency has improved by 50%. Processes which required 4 to 6 hours to complete previously, has been reduced to just 2 to 3 hours.

Another example is Hock Lian Huat Food Stuffs, a family-owned business that manufactures meat rolls, commonly known as “ngoh hiang”.  It approached EDC@SMa for productivity advice.  Following diagnosis and consultation by the EDC’s Productivity Manager, the company embarked on process automation.  What used to be done by four workers is now completed by only two workers, thus resulting in a 100% improvement in labour productivity.  As part of the company’s drive towards improving productivity, it embarked on a comprehensive training plan to upgrade worker skills and knowledge. The EDC helped the company to tap on the Productivity and Innovation Credit, or PIC scheme, which provided about $120,000 of tax rebates.

The advisory services by the EDCs are free.  I am happy to note that almost 45% of participants here have arranged to meet a business advisor from the EDCs after the Conference. I encourage those who have not done so to approach any of the five EDCs to make an appointment.

PIC Clinics

To enable more SMEs to tap on the Productivity and Innovation Credit scheme, the EDCs will also be conducting PIC Clinic sessions from May to November, jointly with the Inland Revenue Authority or IRAS.  At these sessions, you could seek advice on how to file tax claims for productivity and innovation expenditures. Some 300 SMEs were assisted for the first run last year and for this year’s PIC Clinics, the EDCs aim to assist more than 500 SMEs.

Improved Access to www.enterpriseone.gov.sg

As part of outreach, the EnterpriseOne portal where you could access information on various assistance schemes will also be made mobile-user-friendly.  In 2011, there were more than 95,000 visits to the EnterpriseOne website. Being mobile enabled, anyone with a smart phone can now access the EnterpriseOne portal on the move.

For iPhone users, the EnterpriseOne iPhone app will be launched by end of April 2012.  You could get a sneak preview of the new application at the EnterpriseOne booth outside later.

Building SMEs’ Capabilities

Apart from outreach and promoting awareness, grant support for SMEs undertaking capability development projects will be raised from 50% to 70%, effective 1 Apr 2012.  $200m has been budgeted by SPRING Singapore for this from 1 April 2012 to 31 March 2015 in various areas of upgrading. These include automation, technology adoption, innovation, service quality and branding. This will support an additional 1,800 SME projects. In addition, from 1 Jun 2012, the enhanced Innovation and Capability Voucher (ICV) will enable an SME to use the $5,000 voucher for upgrading in the areas of productivity, human resource development and financial management.

Similarly, IE Singapore will be enhancing support to help companies build capabilities for overseas expansion. It will increase support from 50% to 70% of qualifying costs for capability development projects in Design, Intellectual Property, Branding, Mergers and Acquisitions. This means companies are only required to co-share 30% of qualifying costs.

Looking Beyond Our Shores

As mentioned earlier, Asia presents a silver lining for companies. SMEs should continue to expand their presence in familiar markets such as China and emerging markets in Southeast Asia. To this end, IE Singapore will help companies tap this growth opportunity, and grow promising companies into globally competitive companies.

In Southeast Asia, SMEs can gain first mover advantage by seizing the opportunity to establish presence in this familiar region. Myanmar is coming up as a frontier market and its government has started to put in place business-friendly measures to reform the economy. In Indonesia, there is potential in the newer, less-explored eastern region, including Bali, Sulawesi and Makassar, which offer abundant resources, manpower and thriving domestic markets.

In China, the first tier cities are moving into the next stage of development after decades of progress. Central China has now emerged as the next high growth region. Its growth is fuelled by rapid infrastructure development, a strategic geographical position, supportive government policies and a highly educated workforce. Next month, I will be visiting Guangzhou and Wuhan, with a business delegation to explore opportunities in urban solutions.

Conclusion

It is important that SMEs continue to seek opportunities for growth and increase productivity despite the current uncertainties.  This Conference is a good platform to learn and to network.  I wish all of you a fruitful time.

Thank you.