Mr Teo Ser Luck at the Emerging Enterprise Awards 2012, 1 June 2012

Speech by Mr Teo Ser Luck, Minister of State for Trade & Industry, and Chairman, Action Community for Entrepreneurship, at the Emerging Enterprise Awards 2012 on 1 June 2012 (Friday) at 7.55pm, at Fullerton Hotel

Mr Linus Goh, Head of Global Commercial Banking, OCBC Bank

Mr Patrick Daniel, Editor-In-Chief, English/Malay Division, Singapore Press Holdings

Ladies and Gentlemen,

Good evening.

Introduction

I am pleased to join you this evening for the fifth Emerging Enterprise Awards Gala Dinner. I would like to congratulate the organisers, OCBC Bank and Singapore Press Holdings, for doing a good job in promoting and supporting participation in this nation-wide enterprise award drive for up-and-coming young businesses. I understand that there has been a ten-fold increase in applications for the award this year since it was first launched in 2008. Indeed, it is heartening to see that despite all the economic uncertainties in this current global landscape, we have more and more enterprises emerging, thriving and pushing ahead. The Enterprise Awards recognises and honours these outstanding SMEs in Singapore.

Economic Landscape

We are living in challenging times where global economic issues are intertwined and changes are rapid. With parts of Europe under scrutiny for prudence and with a subdued US economy, 2012 will mark a year of slow growth for many of the advanced economies. However, not all is gloom and doom as the International Monetary Fund is seeing decent growth from emerging and developing countries[1] ↗ (opens in new tab). The winds of opportunity are shifting gradually from the West to the East. An emerging Asia, with growth supported by rising domestic demand, offers opportunities for engagement and expansion. Companies must be nimble to seize these opportunities. Collectively, Asia contributes a quarter of the global economic activity[2] ↗ (opens in new tab). This is expected to grow further in the next decade. Also, despite seeing its phenomenal growth tapering off recently, China is still an economic powerhouse, accounting for 9.3% of global GDP.

Challenges in Singapore

As a small and open economy, Singapore will naturally be affected by the sluggishness of the global economy. We also face many domestic constraints such as a tight workforce and a small domestic market. However, we expect Singapore’s economy could continue to grow by 1 to 3 per cent this year[3] ↗ (opens in new tab). All our SMEs, including emerging enterprises, can contribute to this growth. Our qualities of adaptability and resilience have enabled us to triumph over past challenges. I am confident that with an entrepreneurial spirit and a sustained effort to boost growth and productivity, our companies can continue to do well.

More Emerging Enterprises Needed

The Emerging Enterprises Award targets SMEs with annual turnover of between 1 and 10 million dollars. Of the 160,000 SMEs in Singapore, 15 per cent or 25,000 enterprises which operate in the services and manufacturing sectors are in this group. These SMEs employ some 395,000 workers, or 12.7 per cent of the total workforce. Their total value-add at S$23 billion dollars is about 7.9 per cent of our GDP[4] ↗ (opens in new tab). Their contribution to Singapore’s economy is remarkable and I see the promising ones becoming global champions one day.

Besides the services and manufacturing sectors, we need more and better emerging enterprises in all the other sectors to support the continued growth of our Singapore economy.  Many of the previous Emerging Enterprise Award winners have managed to tap the abundant growth opportunities in Asia to become global companies. The founders are far-sighted and daring, and their companies innovative and global. They have built upon these ingredients for success and with perseverance; they have managed to get on the international stage. Allow me to highlight a couple of past winners who embody these qualities.

The 2010 winner MAJ Aviation is a good example of a company that has demonstrated innovativeness. Earlier this year, MAJ Aviation became the first SME in Singapore to open its one-stop general aviation centre hangar to cater to the maintenance, repair and overhaul (MRO) of smaller aircraft. This innovation optimises hangar space and allows 14 light general aviation aircraft to be stored or parked. This is twice what a conventional hangar can accommodate in the same amount of space. As the world’s first two-level rotating carousel, it reduces the amount of time needed to retrieve an aircraft by five times when compared to a conventional hangar, where the aircraft has to be moved out one at a time. MAJ Aviation’s annual revenue now exceeds $12 million. It employs more than 50 people, a far cry from how started out with in 2003 as a manpower supply business with just six people.

Another company, KAI Square, offers video analytics solutions to the transportation and security industries. The founders of this five-year-old company started planning for their overseas venture in China in the early part of their entrepreneurship journey. Through foresight and determination, the company managed to collaborate with a Chinese university to enter the China market. Today, 20 per cent of their total revenue comes from the China market. They count among their clients China Mobile, a major telco player.  Kai Square grew more than ten-fold from a modest four-man outfit to a team of 50 today.

We need more MAJ Aviations and Kai Squares, and more entrepreneurs who will contribute to Singapore’s growth and good jobs for Singaporeans. But how do we nurture more of such entrepreneurs to build innovative and global enterprises?

Education Task Force

The Action Community for Entrepreneurship or ACE, which I currently chair, is a private-public sector movement that aims to build a more entrepreneurial Singapore. We support aspiring Singapore entrepreneurs with good business ideas to start up and we grow them into sustainable businesses.

But we should start even earlier, by encouraging entrepreneurship from young. The answer lies in education. To achieve this, ACE recently set up the Entrepreneurship Education Taskforce to establish a more structured approach towards entrepreneurship learning, so that our schools can nurture entrepreneurs from young. The taskforce comprises both educators and entrepreneurs, and is co-chaired by SPRING Singapore and the Ministry of Education.

The taskforce will put forth its recommendations in six months’ time; and five to ten schools will be identified to pilot the project. These schools will be open for ‘adoption’ by entrepreneurs and enterprises that will mentor and contribute to the schools’ entrepreneurship learning. At the same time, ACE welcomes ideas and feedback on how to reach out to these young budding entrepreneurs. 

Building on the taskforce’s findings and recommendations, we will put in place a more structured approach to inculcate the entrepreneurial spirit in our youth. We will nurture them from a young age to become more innovative, entrepreneurial and passionate about making a difference. Through learning pertinent lessons in establishing vibrant and innovative start-ups, they could, one day, join the pool of successful emerging enterprises that are here today. And we hope to see them excelling too in the global arena.

Conclusion

As the successful leaders of emerging enterprises, I hope you can give back by contributing to the development of entrepreneurship in Singapore. There are many ways you can do this. For instance, you can adopt a school identified by the ACE Entrepreneurship Education Taskforce.  The students will benefit from your sharing of your experience and expertise.

All of you here are the inspiration for our youth who aspire to take the same path. Please share with them your journey, inspire them to think global, and be their role models. I encourage you to continue believing in what you do, be far-sighted and bold, and to seize the right opportunities while you pursue your dreams. Through platforms such as the Emerging Enterprise Awards, I hope you will find opportunities to network with like-minded partners and support one another towards further growth.

With this, I would like to offer my heartiest congratulations to the winners this year. Continue to aim high and I wish you every success in your business.

Have a pleasant evening. Thank you.

[1] World Economic Outlook (WEO), World Economic and Financial Surveys, International Monetary Fund, April 2012

[2] International Macroeconomic Data Set, Economic Research Service, USDA, 27 Jan 2012 (www.ers.usda.gov/data/macroeconomics/ ↗ (opens in new tab))

[3] 2012 GDP Growth Forecast Press Release, MTI, 17 May 2012

[4]

Source: Computed by SPRING with data from DOS & EDB