Mr Teo Ser Luck at the Asia Competitiveness Institute Conference Dinner

SPEECH BY MR TEO SER LUCK, MINISTER OF STATE FOR TRADE & INDUSTRY AT THE ASIA COMPETITIVENESS INSTITUTE CONFERENCE DINNER, 26 NOV 2013, 6PM LEVEL 69 PRIVATE DINING ROOM, SWISSOTEL THE STAMFORD

Distinguished guests,

Ladies and gentlemen,

1.          It is my pleasure to be with you this evening at the Asia Competitiveness Institute’s (ACI) Annual Conference 2013. I would like to specially extend a warm welcome to representatives from more than 20 countries under the Asia Productivity Organization, and entrepreneurs of small & medium enterprises from 33 Indonesian provinces representing the Provincial Employer’s Association, or APINDO.

Boosting the productivity of SMEs

2.          I am glad that one of the main areas of focus for this year’s ACI conference is on small and medium enterprises (SMEs). SMEs are an important part of Singapore’s economy as they make up 99% of enterprises, employ 70% of our workforce and contribute half of our GDP.

3.          Singapore has been focusing on restructuring our economy towards productivity-driven growth, especially for our SME sector. This involves streamlining business processes to improve efficiency and reduce costs, but also involves innovation in products and services to move up the value chain and grow the top line.

4.          The transition towards productivity-driven growth has not been easy for our companies, but the Singapore government has implemented a variety of programmes to support companies in this.

5.          The Singapore Government established the National Productivity and Continuing Education Council (NPCEC) in 2010 to champion and coordinate our productivity efforts. These productivity efforts include 16 sectoral roadmaps, developed with inputs from companies, to cover the key sectors of our economy. As of June this year, more than 13,000 companies have received assistance via these roadmaps. A key thrust under the roadmaps is to bring companies together in Collaborative Industry Projects to develop shared solutions so that our companies can enjoy lower operating costs from economies of scale.

6.          In addition to these roadmaps, broad-based support is provided to companies to help them upgrade. For instance, we have set up SME Centres and satellite SME centres, which offer comprehensive advisory services to SMEs and help them access government schemes. SMEs can also get government funding for consultancy services to improve their business practices in a variety of areas. Most recently, my Ministry launched the Technology Adoption Programme, which helps to link companies to technology solution providers which help them raise productivity.

7.          Based on recent surveys conducted by trade associations and industry partners, our SMEs are making efforts to upgrade their capabilities and boost their productivity. We are optimistic that our SMEs are on the right track and that we will see them reap rewards in time to come. This is particularly important as productivity and strong capabilities are crucial enablers for international success.

Internationalisation for SMEs

8.          Singapore is well placed to tap on emerging Asian markets and the growing middle class population in the region. We have a seven-hour-flight hinterland, which includes ASEAN, India, China and Australasia, covering 2.8 billion people or 40% of the global population.

9.          Due to Singapore’s small domestic market, our SMEs need to venture abroad relatively early in their development in order to grow. About 74% of our SMEs export their goods and services, while 42% have set up physical offices overseas[1].

10.      To help our SMEs internationalise, we have a dedicated agency, IE Singapore, which focuses on driving the external economy. IE Singapore’s global network of over 35 Overseas Centres provide Singapore businesses with in-market support and expertise. IE Singapore supports both established companies and companies which are new to internationalization, via its Global Company Partnership (GCP) and Market Readiness Assistance (MRA) programmes respectively.

11. Trade connectivity and market access are key to helping our companies internationalise and export to key markets. Singapore currently has 20 Free Trade Agreements, or FTAs, with 31 trading partners. This extensive FTA network benefits our companies in several ways; our FTAs have helped our businesses to reduce costs through the removal or reduction of custom duties, or the simplification of customs or import procedures. In addition, FTAs have opened new markets for our businesses, and have also encouraged investments by providing investors with greater confidence and legal certainty.

12.       To ensure that companies are adequately equipped to tap on FTAs, IE Singapore works closely with Trade Associations and Chambers to conduct seminars and workshops on FTAs.

13.       Trade associations such as the Singapore Business Federation (SBF) play a significant role in helping our companies establish networks overseas. Over the last few years, SBF has organized many business missions to markets such as Myanmar, Turkey and Sri Lanka in order to establish good relations with business leaders there and create inroads for Singapore companies to enter those markets.

14.       In the long run, we hope that our SMEs can grow to become global brands by increasing their productivity and establishing strong footholds in overseas markets. We have seen success stories of Singaporean companies like Breadtalk, Hyflux and Charles & Keith, and we look forward to more success stories in the coming years.

Conclusion

15.       I am pleased that a letter of intent is being signed tonight between the provincial APINDOs and ACI to further research into SMEs. By building our knowledge base on SMEs, we can be better informed on how to foster competitive and productive economies in Singapore, Indonesia and the wider ASEAN region.

16.       I wish everyone a pleasant evening and hope you have a fruitful time for the remainder of the conference.

[1]

IE Singapore Internationalisation survey 2013