Mr Teo Ser Luck at the Asia Competitiveness Institute Conference 2012

SPEECH BY MR TEO SER LUCK, MINISTER OF STATE FOR TRADE AND INDUSTRY, AT THE ASIA COMPETITIVENESS INSTITUTE CONFERENCE 2012, 30 JULY 2012, 9:30 AM AT ORCHARD HOTEL​

His Excellency Gita Wirjawan, Minister of Trade, Indonesia
Dato’ Sri Mustapa bin Mohamed, Minister of International Trade and Industry, Malaysia

Deputy Ministers, Governors, Ambassadors, High Commissioners

Professor Tan Chorh Chuan, President, National University of Singapore

Professor Kishore Mahbubani, Dean, Lee Kuan Yew School of Public Policy

Professor Tan Kong Yam, Director, Asian Competitiveness Institute

Distinguished guests

Ladies and gentlemen

Good morning.

I am glad to join you today at the launch of the Asia Competitiveness Institute’s (ACI) Annual Conference 2012.  I am also pleased to welcome our distinguished guests from the local and regional diplomatic and academic communities.

Re-examining the notion of competitiveness

ACI was established in 2006 to provide thought leadership on competitiveness in order to raise living standards through productivity-driven economic growth.  After six years and a global financial crisis, it is perhaps timely that we re-examine the notion of competitiveness.

What do we mean when we say that an economy is ‘competitive’?  The inherent attributes of a country, like its geography, institutions and policies greatly influence its productivity. At the same time, the factors that influence national competitiveness are dynamic and can be very much dependent on the external environment. As a country develops and its mix of economic activities changes in response to regional and global flux, the factors that affect its competitiveness will also change.

For countries at the innovation-driven stage of development, they must compete by producing higher value-added goods through sophisticated production processes, and by generating creative new ideas. Thus, higher education and training become important for economies that want to move up the value chain. This enables the economy to continuously innovate and produce cutting-edge products. Singapore, for example, has placed great emphasis on continuous training to develop a labour force that is relevant and current. We supplement this by remaining open to both local and foreign companies and talent who contribute to our economy by enhancing productivity and plugging the gaps in our labour force. To remain an attractive option for talent and businesses, it is imperative that we are a liveable city. 
 

The importance of a city’s liveability to its level of competitiveness

Experts are beginning to recognise that cities will be the drivers of economic activity in the future. A recent Brookings Institution study found that the 200 largest metro economies, such as New York and Tokyo, generated nearly half of the world’s economic output, despite housing only one-seventh of the world’s population.   A city’s liveability is thus a salient factor in determining its competitiveness, as the ability to develop a talented and productive workforce is at the centre of the innovation-driven growth needed to sustain a city’s growth. Singapore’s efforts in this area have made us the 4th most liveable city in Asia.

Opportunities in Singapore and Asia

Over the medium-term, the prospects for Asia are bright.  Emerging Asia will drive a large share of global economic growth for some time to come.  With greater regional connectivity, decreasing barriers to trade and good growth in domestic demand, intra-Asia trade is expected to increase  and will benefit regional economies. Singapore continues to tap on this growth and enjoys good trade relations with our FTA partners from China, Japan, Korea, India and ASEAN.

As we strive towards the realisation of the ASEAN Economic Community (AEC) by 2015, ASEAN will move one step closer to regional integration and trade liberalisation. As a single market and production base, ASEAN will become even more competitive and our citizens will benefit from more dynamic economic development.

The growth of the Asian middle-class will provide a further boost to our economies. According to estimates by McKinsey, the proportion of middle-class households in China and India is projected to grow significantly over the next 15 years.   By 2025, China could become the world’s third largest consumer market, after the US and Japan. ASEAN itself is a considerable market, with 600 million consumers presently.  These huge consumer markets will provide opportunities for Singapore and the rest of the region, not only in the exports of commodities and consumer goods, but also in exportable services such as water and waste treatment, clean technologies, urban planning and professional services.

For Asia to take advantage of the opportunities available, improvements in competitiveness will be critical. Competitiveness benchmarks can be a useful tool for policymakers to monitor their progress and motivate change within their own economies. It can also be handy for businesses to make investment decisions as we see more firms rooting themselves in Asia. Since Professor Michael Porter first launched his study on competitiveness, we have witnessed how competitiveness benchmarking can complement and deepen policy discussions. For example, ACI released its ASEAN Competitiveness Report and Vietnam Competitiveness Report in 2010, which I understand received much attention in Vietnam’s policy circles.

Conclusion

In conclusion, I congratulate ACI on bringing together thought leaders from government and academia for this year’s Annual Conference, to share their views on the subject of competitiveness. I wish you vibrant and stimulating discussions over the next two days.

Thank you.