Speech by Minister S Iswaran, Minister for Trade and Industry (Industry) at the SMF Awards and 84th Anniversary Dinner

SPEECH BY MR S ISWARAN, MINISTER FOR TRADE AND INDUSTRY (INDUSTRY) AT THE SINGAPORE MANUFACTURING FEDERATION (SMF) AWARDS & 84TH ANNIVERSARY DINNER, THURSDAY, 13 OCTOBER 2016, 7PM, THE RITZ CARLTON MILLENIA Your Excellencies,

Mr Douglas Foo, President, Singapore Manufacturing Federation,

Distinguished guests,

Ladies and gentlemen,

Good evening,

1.            I am happy to join you here at the SMF Awards and 84th Anniversary dinner.

2.            This occasion of the SMF’s 84th anniversary also marks the handover from one Council to another. I would like to take the opportunity to thank the outgoing Council for your contributions in supporting the manufacturing sector, particularly our SMEs, and congratulate the incoming Council on your recent election.

Ensuring Future Competitiveness in the Manufacturing Industry

3.            The manufacturing sector is an important pillar of our economy.  It contributes about 20% of our GDP.  Overall manufacturing labour productivity has outpaced national productivity, growing at an annual rate of 2.1% from 2010-2015, compared to the overall labour productivity growth rate of 1.3%[1]. The manufacturing sector contributed more than 510,000 jobs in 2015. It is also a source of good jobs, where more than 60% of residents in the sector are employed in skilled jobs, higher than the 54% rate for the overall economy. Wages of full-time employees in the manufacturing sector also rose faster compared to the overall economy[2]. Manufacturing also generates positive spin-offs. MTI estimates that a $1 billion increase in manufacturing value-added due to an increase in final demand for its goods is estimated to generate around $300 million of value-added and 2,400 jobs in the rest of the economy.  

4.            However, we are now entering a phase where the pace of technological change is transforming the global manufacturing environment.  Technology-intensive manufacturing has begun to dominate the landscape in many countries and companies. Also, as business models evolve, we see the growth of high-value manufacturing-related services such as R&D, engineering, logistics and maintenance. Economies which have the requisite skilled workforce and infrastructure will be better positioned to gain from this shift to higher-value advanced manufacturing and services. In order to stay relevant and seize these new opportunities, Singapore companies must be ready to adopt the latest manufacturing technologies and business models.

5.            Under the Research, Innovation and Enterprise Plan (RIE2020) from 2016-2020, the Government has committed $3.2 billion to support R&D in Advanced Manufacturing and Engineering.  A key focus under the Plan is to enhance collaborations between public sector research agencies and industry, to enable the translation of research outcomes into new products and services which are commercialised by industry partners.

6.            The efforts under RIE2020 dovetail with the development of the Industry Transformation Maps (ITMs) announced at Budget 2016. The ITM sectors include advanced manufacturing and engineering sectors such as precision engineering, food manufacturing, electronics and aerospace, which offer new growth opportunities for companies, as well as interesting career opportunities for individuals, including mature workers.

7.            The Precision Engineering ITM, which I launched yesterday, has set out a vision for Singapore to have a globally-leading ecosystem for advanced and digital manufacturing by building innovative enterprises. The industry is expected to add 3,000 PMET jobs, and increase output from $32 billion today to $42 billion by 2020.

8.            The shift to advanced manufacturing will result in increasing demand for highly skilled manpower. For example, robotics engineers are needed to design and manage robots and robotic systems as automation becomes more widely adopted. There will also be demand for global product managers who can oversee the whole product life cycle, from concept, to test-bed, to manufacturing.

Forward-looking Companies are Crucial to Future Success

9.            To remain relevant, our manufacturing companies must be nimble and keep abreast of these rapid changes in the global environment. It is also important that our people have the necessary skills for the new jobs and roles that will be created due to industry transformation.

10.         I am therefore very pleased to be presenting the SMF Awards tonight. These award winning companies embody the innovative, resilient spirit, and open, forward-looking mindset, that are much needed to seize opportunities even in challenging economic circumstances.

11.         One such example is Onn Wah Tech Pte Ltd, which was incorporated in 2008 and specialises in providing engineering services for the semiconductor industry. By separating its design and manufacturing functions, Onn Wah created a dedicated unit to focus on high-tech projects, providing them another source of revenue. Onn Wah has also invested in automation with the help of SPRING’s Capability Development Grant, which has helped to more than halve their delivery lead-time, from 6 to 2.5 weeks.

12.         As part of creating the dedicated technical unit, Onn Wah provided 3 machinists with in-house training and subsequently promoted them to be design engineers and supervisors. These promotions and training not only helped the workers upgrade their skill sets and increased employee retention; they also created a skilled technical support team. With this team, Onn Wah is now able to successfully customise solutions to improve manufacturing yield for their clients.

13.         Another example is Feinmetall Singapore Pte Ltd. a manufacturer of wafer probe cards. The company has grown from a regional repair and service centre to a one-stop design, manufacture, test and service centre for wafer probe cards for the semiconductor industry. The company invested in strong R&D efforts to improve the quality and reliability of existing and new products to maintain its competitive edge. Over the years, the company received R&D assistance from A*STAR's Singapore Institute of Manufacturing Technology (SIMTech), and support from SPRING Singapore to develop new applications and improve productivity. Feinmetall now has a 9-strong R&D team. It recently embarked on the Enhanced Operational & Technology Roadmapping (OTR) programme with SIMTech to identify new strategic business areas and innovative technology solutions to prepare for its future growth.

Crucial Role of TACs in Industry Transformation

14.         Onn Wah and Feinmetall are examples of how SMEs can benefit from Government assistance to develop capabilities and position themselves to capture opportunities. The Trade Associations and Chambers (TACs) also play an important role in partnering the Government to implement the ITMs for their sectors and drive the growth of enterprises.

15.         With their deep understanding of the industry and their members’ needs, TACs can play a multiplier role to coordinate and drive innovation, upskill the workforce and enhance productivity at the sectoral level. TACs can take the lead to identify industry-specific challenges and work with partners like our research institutions and Centres of Innovation to conduct technology roadmapping for their industries, and customize Ready-to-Go solutions for mass adoption. By identifying and implementing technology adoption projects, TACs can help their members transform their business models, increase productivity and enhance their competitiveness.

16.         The Government is committed to supporting partner TACs to drive group-based and industry-wide upgrading initiatives through schemes such as the Local Enterprise and Association Development (LEAD), enhanced Technology Adoption Programme (TAP) and the Collaborative Industry Projects (TAC-CIP) initiative.

17.         In all of these government efforts, our people and creating opportunities for them will remain the central focus.  Equally, Singaporeans must keep an open mind, take ownership of their personal development and pro-actively participate in available assistance schemes. To ensure that our manpower have the right skills for advanced manufacturing, Workforce Singapore will continue to work with TACs such as SMF to implement SkillsFuture initiatives. Specific schemes include P-Max, which assists SMEs to better recruit, train, manage and retain their newly-hired PMEs; and the Professional Conversion Programmes, which aim to help jobseekers to re-skill themselves and obtain the necessary knowledge and competencies to take on new jobs.

SMF as a Valuable Partner to the Government

18.         The SMF has been a key industry partner in our enterprise and industry upgrading efforts in four key areas: productivity upgrading, manpower, internationalisation and standards development.

19.         First, SMF has been active in driving SME outreach and productivity upgrading through the SME Centre@SMF and two satellite centres, which have reached out to more than 10,000 SMEs through advisory sessions over the past three years. SMF’s Singapore Innovation and Productivity Institute has implemented more than 100 productivity projects and engaged over 4,000 manufacturing and engineering SMEs since 2012.

20.         Second, as 1 of the 7 TACs partnering SPRING for the SME Talent Programme (STP), SMF has helped place 423 students in 75 SMEs over the last 3 years. The students will work in areas ranging from engineering to business development. In addition, SMF plays the role of a Lean Enterprise Development Scheme (LEDS) Multiplier to help our companies adopt lean manpower business formats.

21.         Third, under SMF’s Working-in-Partnership (WIP) programme, SMF and IE Singapore have helped Singapore companies enter overseas markets by working together. Under IE Singapore’s Tasty Singapore industry branding banner, SMF bands WIP participating companies together so that they can benefit from economies of scale, minimise risks, and gain marketing mileage. Overall, the WIP initiatives have helped more than 130 companies generate sales of $5.3 million since 2013 in markets such as Thailand, China and Myanmar. SMF is also looking to forge new partnerships in other markets such as the Philippines.

22.         Finally, SMF has driven industry upgrading through standards development through the SMF Standards Development Organisation (SDO-SMF), which has completed over 230 standards since 2011. As the appointed SDO to oversee the logistic sector, SDO-SMF worked with industry players to complete 3 standards for the logistics industry in the areas of container equipment interchange receipt, last mile delivery and container depot operations. All these standards projects have helped improve productivity and efficiency in companies' operations.

23.         Going forward, SDO-SMF will be working on a number of standards to enable companies to be fully ready for upcoming transformations and technological innovations. For example, SDO-SMF is in the process of developing standards on safety requirements for personal care robots, automated guided vehicles for warehouses, and the setup of additive manufacturing facilities. These are standards that can potentially support mass adoption of new technology by our companies.

Conclusion

24.         The SMF is a good example of a pro-active TAC that has worked with the Government to upgrade the capabilities of its member companies. I look forward to continuing the partnership with SMF championing initiatives to strengthen the competitiveness of your members, under the guidance of the incoming Council.

25.         The Government will work with key shareholders such as TACs on our industry transformation journey through the ITMs. Despite the challenging environment, there remain good opportunities for our companies, in growth sectors and in the region. I urge our SMEs and TACs to come together to make the most of these opportunities.

26.         In closing, I would like to congratulate all of the award winners tonight and also wish the new SMF Council a productive and successful term.

27.         Thank you.

[1] Based on VA per Actual Hour Worked. Source: MTI

[2] The nominal median monthly income of full-time employed residents in manufacturing rose by 5.5% per annum between 2009 and 2015, surpassing the 5.1% per annum growth for full-time employed residents in the overall economy.

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