SMS Speech at Manufacturing Solutions Expo 2015

OPENING ADDRESS BY GUEST-OF-HONOUR MR LEE YI SHYAN, SENIOR MINISTER OF STATE, MINISTRY OF TRADE AND INDUSTRY AND MINISTRY OF NATIONAL DEVELOPMENT, AT THE MANUFACTURING SOLUTIONS EXPO 2015 ON WEDNESDAY, 30 SEPTEM​​BER 2015 AT 0935 AM AT SUNTEC SINGAPORE CONVENTION, HALLS 401-402, LEVEL 4

Mr Douglas Foo, President of the Singapore Manufacturing Federation,

Distinguished Guests, Ladies and Gentlemen.

1. It gives me great pleasure to welcome you this morning to the Manufacturing Solutions Expo 2015. I’d like to thank the organisers—the Singapore Manufacturing Federation (SMF) and Sphere Exhibits for organizing this Expo. It is a very good industry-led effort to help our businesses keep abreast of the latest developments in machinery and technology aapplications for higher productivity.

Manufacturing has become a pillar of our economy

2. Fifty years ago, our then finance minister Dr Goh Keng Swee had a vision to industrialize Singapore, creating jobs for the masses. Through years of development, our manufacturing sector has become a key pillar of the economy, accounting for 18.4% of our GDP and employing just over half a million people.

3. Certain segments of our manufacturing sector have attained global competitiveness. For instance, we have a critical mass of biomedical manufacturing in Singapore. Its nominal output was S$21.5 bil in 2014. Its real value-add per worker has grown at 13.2% per annum from 2009-2014.

4. Much as we have made good progress, our businesses are facing 3 key challenges: rapid changes in technology; globalisation of supply chains and a tight domestic labour market.

Rapid Changes in Technology

5. Based on DOS data, our total private investments in machinery and equipment have risen from S$16.6 bil to $22.2 bil from 2009 to 2014. As we push for greater use of technology, our firms must spend more on machinery and equipment. 

6. IRAS data also shows that the number of businesses claiming Productivity and Innovation Credit (PIC) has been on the rise. From the Year of Assessment 2011 to 2014, the number of companies claiming PIC per YA has nearly doubled. 

7. These are encouraging signs but we cannot under invest compared to competition.

Globalisation of supply chains

8. A survey1 carried out by UN suggests that China became the largest manufacturing economy in 2013 producing US$2.9 trillion of goods versus USA’s US$2.43 trillion. The shifts of global supply chains from the developed countries to North Asia were particularly pronounced in the past two decades.

9. In Singapore, we have to accept these trends as they are, and define our own niches. One way is to create products and services with higher knowledge intensity. 

10. Consider the example of Getech Automation which developed a product to fill a niche regional market gap in Robotic automation. Getech developed a Pharmaceutical Bottle Dispensing System (BDS) for the KK Women’s and Children’s Hospital (KKH). Intelligent Robots are used to pick up pharmaceutical syrup bottles from a loading area once they receive an order from the software. This presents KKH with a unique and reliable way to pick different size bottles, label and pack them into containers at high speeds that has not only resulted in shorter patient waiting times, but also freed up times for pharmacists to focus on patient counselling.

11. The development of the robots for KKH has raised Getech’s profile as a solution provider for pharmacy automation needs. The company is also in talks with Changi General Hospital and polyclinics on the sale of BDS. Getech are a case of how innovation has helped it define a special niche in the robotic market. 

12. To help to engender more such innovations, SPRING has partnered research institutes and polytechnics to set up seven sector-specific Centres of Innovation (COI) covering

a. electronics,

b. supply chain management,

c. environment and water,

d. food,

e. Materials

f. marine and offshore and

g. precision engineering industries.

13. The COIs are a one-stop centre providing laboratory facilities, consultancy services, training courses, and help for SMEs who want to test and develop their projects.

14. For instance, the Materials COI (MCOI) in A-Star’s Institute of Materials Research and Engineering was just set up last year to help local SMEs better understand the materials needs of their businesses and promote sound materials design and usage to enhance their businesses.

15. MCOI has already made headway. For example, Lipostation, the subsidiary of KOOPrime, a healthcare and life sciences company, will be co-developing food safety analysers with MCOI. I hope you have the chance to tour some of the emerging solutions created by the COIs that are on display here.

A Tight Labour Market 

16. To overcome the constraints of a tight labour market, firms can enhance operational efficiency by promoting the wide scale adoption of next generation gamechanging technologies like robotics and digital manufacturing. 

17. Panasonic Refrigeration offers an example of technology adoption. Through the use of robotics, Panasonic managed to improve quality of their products, land productivity and reduce their unskilled workforce by 30%. 

18. Technology adoption has also enabled logistics companies to enhance productivity. Through a sector-wide project led by the Singapore Transport Association and supported by SPRING Singapore, 11 of these companies adopted the Mobileye device which alerts drivers of danger and monitors driver behaviour. These logistics companies are expected to experience an increase in productivity of up to 20%, arising from a 40% reduction in accident rates, 10% reduction in maintenance costs and 10% reduction in insurance premiums. 

The government has rolled out broad-based and targeted schemes to help companies raise productivity by supporting costs of technology adoption. I am very pleased that many companies have stepped forward to tap on our schemes. In the last Year of Assessment, more than 61,000 companies benefitted from Productivity and Innovation Credit scheme that incentivises companies to make productivityrelated investments.

Up-skilling Our Workforce

19. Beyond investing in technology, we must also invest in Singapore’s most vital resource— our people.  

20. Many of you may have heard of Skillsfuture, a national movement that aims to provide opportunities for Singaporeans through an integrated system of education and training. Various agencies across government have been working closely with industry, training and higher education partners to design programmes and initiatives for a future ready workforce. 

21. As most of you are aware, the mid-career enhanced subsidy, which was announced in this year’s budget, will take effect tomorrow. Under the scheme, Singaporeans aged 40 and above will receive up to 90% subsidy in course fees for WDA-funded courses.

22. I urge all companies to take the first step in championing the cause of Skillsfuture, which will help strengthen the Singapore core and also contribute in building a more productive economy.

Conclusion

23. Ladies and gentlemen, I have spoken about the 3 challenges our businesses face: rapid changes in technology, globalisation of supply chains, and constraints in labour growth.

24. The solutions to these challenges are innovation and productivity. It is my pleasure now to declare the Manufacturing Solutions Expo 2015 open. Thank you.