Speech by Minister S Iswaran at the Precision Engineering Centre Of Innovation (PE COI) Annual Conference 2016 at the Employment and Employability Institute (e21)

Members of the Industry

Ladies and gentlemen,

Good morning,

Introduction

I am pleased to join you at A*STAR SIMTech’s Precision Engineering Centre of Innovation Annual Conference 2016.

2.            Precision engineering is the backbone of the manufacturing industry, serving a wide variety of clusters such as electronics, aerospace, automotive, marine, oil & gas and medtech.

3.            Over the past several decades, our 2,700 PE companies have come a long way. From simple contract manufacturers at the beginning, the top players are now sophisticated solution providers with design, prototyping, production, and supply chain management capabilities.

4.            Like Manufacturing, PE is integral to Singapore’s future economy. To grow and remain competitive, the industry must continue its transformation journey. It must embrace technology and innovation.

Industry Transformation Maps (ITM) for sectoral upgrading

5.            The Government will support and drive such sectoral upgrading through the Industry Transformation Maps (ITM) for the sector. This is part of the wider $4.5b Industry Transformation Programme announced at Budget 2016.

6.            The Industry Transformation Map is a strategy for the sector as a whole. It aims to promote growth and competitiveness for the sector in four ways:

a.            Enabling companies to become more productive and optimise the use of manpower;

b.            Equipping the workforce with the skills to capitalise on new technology and support the shift that we are seeing across all industries towards higher value-added activities and more value creation;

c.             Leveraging R&D and promoting technology innovation as the basis for sustained competitiveness and growth; and

d.            Supporting companies to find new markets for their products and to expand their operations overseas.

7.            We are already helping individual companies with these initiatives. What we now need in a coordinated manner across the economy is an effort at the sector level and we need that for two reasons. First, some aspects of industry transformation require solutions which cannot be taken on by individual companies, or even a group of companies. For example, developing an industry-level skills-upgrading plan requires scale so you need to bring on board many players that interface with the government, economic agencies, and the labour movement. By doing so, we are able to bring the collective effort and resources of industry, unions and government agencies to the fore. Second, industry trends are becoming more challenging and complex, and what that means is we need solutions which sometimes do not just neatly fit in any one particular sector or domain. We need different sectors to come together, different capabilities to come together, in order to address that challenge in a comprehensive way. 

The PE ITM will help us achieve the vision for the industry

8.            Let me use the Precision Engineering industry to illustrate. Our aim is to help the sector re-define itself to go beyond its traditional supplier role by growing two pillars: 1. complex equipment and 2. precision components. This will drive the value proposition going forward. At the same time, we will help supporting suppliers improve productivity and enhance their manpower capabilities. This was why we launched the precision engineering productivity roadmap in 2011.

9.            And we have made good progress in this regard. Output in the sector grew by 68.3% from 2009 to 2015, and value added by 50.6%. As a result, value-added per worker grew 7.4% per year over the same period.

10.         The productivity roadmap is just one component of the ITM.  We also need to harness our R&D capabilities to develop more competitive products and nurture new growth areas in support of our vision. Robotics and additive manufacturing (AM) have great potential to benefit the PE industry, and even spin off new sub-sectors.  Therefore, we are investing significantly in these areas, through the National Robotics Programme and a technology roadmap to develop the Additive Manufacturing industry. Other technology opportunities include developing software capabilities to create high-performing smart machines and systems.

11.         A future-ready PE workforce is key to this effort as it will fundamentally underpin our ability to shift to more complex and knowledge-intensive activities. Hence, the Precision Engineering Vocational Continuing Education and Training (PEVC) programme was launched in 2012 to meet the need for deeply-skilled craftsmen and rejuvenate the PE workforce.

12.         With the growth of new verticals, we need to groom talent that specialises in new skills and technologies, such as mechatronics, design, advanced robotics, and lasers and optics. The Centre for Optical and Laser Engineering (COLE) and the Singapore Centre for 3D Printing (SC3DP) were set up to do so. EDB is also working to groom global product managers who can oversee the whole product lifecycle, from conceptualisation, to test-bedding, to manufacturing.

13.         Lastly, we will help companies expand into alternative manufacturing locations such as Vietnam, India, and Mexico to diversify their operations and enhance their competitiveness.

14.          One company that has benefitted from an integrated approach is Wah Son Engineering. Wah Son is an aerospace tooling manufacturer serving global clients like GE Aviation and Rolls Royce. It has been upgrading itself on multiple fronts with help from the Government. To raise productivity for its high-mix-low-volume manufacturing, the company has re-designed its machining, welding and assembly processes. It has also invested in automation such as bar-coding system to reduce manual tracking of parts. Recognising the need to develop talent to support its growth, Wah Son sent three senior technicians for the Master Craftsman Programme under the PEVC and tapped on SPRING’s SME Talent programme. On the innovation front, Wah Son joined the PE COI’s AM Collaborative Industry Project (CIP) to equip itself with new capabilities in additive manufacturing to grow their existing business.

15.         I am pleased to note that Wah Son and four other SMEs will be signing an agreement on the CIP with SIMTech later. The CIP allows the SMEs to tap SIMTech’s additive manufacturing expertise and facilities.

16.         This is how the PE Industry Transformation Map integrates productivity improvement, skills development, technology, and internationalisation. It aligns all these different and mutually reinforcing efforts to achieve our vision for the sector and create good jobs for Singaporeans. We will continue to refine the strategy and plug any gaps, as we gain more experience in the implementation of these ITMs and also as we get more industry feedback and observe global trends.

Collaboration is key to growth

17.         Our economic agencies will take on the role of cluster champions to co-ordinate and execute these plans. For Precision Engineering, EDB is the cluster champion though the development of the sector has always been a collective effort involving the industry and trade associations and chambers. For example, in 2013, SPETA and the Singapore Manufacturing Federation launched the “Master Craftsman” certification in 2013. Over 60 companies have committed to compensate their certified master craftsmen a minimum fixed salary of $3,500 commensurate with their higher skills and capabilities.

18.         The ITMs are also about deepening such partnerships. All industry stakeholders have a role in this endeavour. To be successful we need a strong network of collaboration and partnerships. Let me highlight some of these partnerships in the PE sector and how we continue to work on this front.

19.         Firstly, partnerships between the Government and the industry associations.  As industry stewards, the associations can help members move to higher value-added activities. SPETA has been a valued partner in this regard. I am therefore glad to announce the signing of an MOU between the PE COI and SPETA today, which will enable them to work together and reach out to more companies, to accelerate and scale up technology adoption.

20.         Secondly, partnerships between public research institutions and companies to harness R&D and innovation for growth. Additive Manufacturing is one key technology for PE and manufacturing in general. We need to raise our capabilities in this space to better position ourselves for the future. I am therefore pleased to announce a joint R&D collaboration between SIMTech and Applied Materials on the metal 3D printing of parts for use in demanding operating environments. The combination of Applied Materials’ expertise in materials engineering and SIMTech’s additive manufacturing technology will create new competencies in this area.

21.         Third, partnerships between large and small players. The Government has been fostering win-win partnerships between large enterprises and SMEs through schemes such as the Partnerships for Capability Transformation (PACT). A*STAR’s Collaborative Commerce Marketplace (ACCM) e-portal, launched today, will also facilitate such connections.

22.         The portal showcases the capabilities of manufacturing SMEs and allows MNCs to easily source for local suppliers. SMEs can use the platform to better understand the needs of MNCs, and companies with similar interests can connect with one another to form special interest groups. Furthermore, companies with technology capabilities gaps can easily connect with A*STAR research institutes or institutes of higher learning to bridge the gaps. The pilot trial has received positive feedback from participants and I encourage all of you to make full use of it.

Conclusion

23.         Since its launch in 2007, SIMTech’s PE COI has been an invaluable resource for PE companies, providing assistance and spearheading industry initiatives and manpower training to build capability in the industry. To date, the centre has initiated more than 60 Collaborative Industry Projects, completed over 490 industry projects and 160 consultancy cases.

24.         The PE COI’s efforts epitomise the partnerships that are critical to making the ITMs work. It is through these deeper relationships that we can take a more integrated and targeted approach to bring about sustained and impactful sectoral transformation. Thank you.