Speech by MOS Koh Poh Koon, at the 29th Annual Singapore 1000, SME 1000 and Singapore International 100 Awards

SPEECH BY DR KOH POH KOON, MINISTER OF STATE, MINISTRY OF TRADE AND INDUSTRY, AT THE 29th ANNUAL SINGAPORE 1000, SME 1000 AND  SINGAPORE INTERNATIONAL 100 AWARDS, ON 26 FEBURARY 2016, 7.30 PM AT RESORTS WORLD CONVENTION CENTRE

Mr Ben Elliott, Chairman, DP Information Group & CEO, Experian Asia Pacific

Mr Max Loh, Managing Partner, ASEAN and Singapore, Ernst & Young

Distinguished Guests

Ladies and Gentlemen

Good Evening

Introduction

1. I am very happy to join you this evening to recognise the efforts of Singapore’s best companies.

2. The past 12 months have not been easy for our companies and the global economic outlook has weakened since the start of the year. A slump in oil prices alongside volatility in global equity markets has heightened economic uncertainty in the near term. Domestically, our businesses have continued to face challenges from the tight labour market and tepid external demand. Looking ahead, even though the IMF expects global growth to improve modestly from 3.1% in 2015, to 3.4% in 2016, the continued slowdown in China, the services-driven nature of growth in the US, as well as the trends of in-sourcing in China and the US, may mean that external demand for our exporters may not see a significant boost this year. Overall, Singapore’s economy is projected to grow at a modest pace of 1-3%. The SBF-DP SME index for January to June 2016 was 51.1, a four-year low, indicating poor business sentiment amongst local SMEs.

Making the best out of challenging circumstances

3. In the midst of these challenges, it is important to remind ourselves that companies with the right business strategies and good leadership can still achieve good results. The results of the Singapore 1000 and the SME 1000 are a testament to this. The combined revenue of the Singapore 1000, which are the top 1000 companies in Singapore, has increased from $2 trillion in 2013 to S$3 trillion in 2015. In addition, the combined revenue of the SME 1000, the top 1000 SMEs in Singapore, was S$29.2 billion in 2015, an increase of 2.9 per cent from the year before.

4. There are three key factors that have contributed to the success of these companies: innovation, internationalisation, and building a pipeline of talent.

Importance of Innovation

5. Innovation is a crucial part of business success today, and there is increasing awareness of this. DP Info’s SME Development Survey 2015 found that more SMEs now recognise that technology investment can have a direct and positive impact on a company’s profitability.

6. One such company is Oculus Pte Ltd, which manufactures cosmetic contact lenses. It decided to develop new capabilities in the manufacturing of cosmetic contact lenses to increase its production capacity in the long term and improve its competitiveness with advanced technology.

7. By tapping on SPRING’s Capability Development Grant, Oculus was able to defray up to 70% of the cost of establishing a new cast mould manufacturing platform. With this new platform, Oculus was able to enjoy improved productivity, a lower dependence on labour and great control over quality and  supply due to new moulding and optical inspections systems.

8. The new capabilities strengthened Oculus’ know-how in contact lens development and manufacturing, enabling them to develop more popular cosmetic lenses models and enjoy economies of scale for lower per lenses unit cost. Oculus is looking to further develop its in-house innovation capabilities in order to stay ahead of its competitors.

Expanding Beyond Singapore

9. Our small domestic market necessitates expansion into new markets in order to grow one’s business. Besides growing their top-line, companies can and should tap on international markets for resources, ideas and concepts to enhance their competitiveness. DP Info found that Singapore’s SMEs are becoming increasingly globalised, with 54% indicating that they do business overseas. One of the award recipients tonight, Eu Yan Sang, has grown from a traditional heartland TCM shop into a modern lifestyle business spanning more than 250 company-operated retail outlets and more than 30 TCM clinics across six countries.

10. Its most recent venture was to set up a premium casual dining restaurant, 气源 365, in Shanghai that will serve TCM-infused food to young working adults. With financial incentives provided by IE Singapore, Eu Yan Sang was able to defray its expansion costs. I would like to encourage companies to look abroad and seize opportunities to expand and grow your business overseas.

Building A Pipeline of Talent

11. Companies must be able to attract, retain and develop talent to remain competitive in the long run. In order to do so, employers need to provide attractive hiring terms, opportunities for career progression and clear career advancement pathways. Companies also need to plan ahead and develop a pipeline of talent that can take their business to the next level.

12. For instance, Eu Yan Sang has identified the need to build a pipeline of talents in order to manage and drive its global business. Through the Young Talent Programme Scholarship, which is co-funded with IE Singapore, undergraduates are given help to pay for their studies and provided the opportunity to work for Eu Yan Sang upon graduation.

13. IE also worked with Eu Yan Sang on its organisation development project that aims to develop an organisational structure which will support succession planning and coordinate business management and operational control for its regional businesses in China, Hong Kong, Malaysia and Australia. These initiatives will allow EYS to plan ahead to ensure its continued competitiveness by having the necessary talent.

14. The Government has put in place the SkillsFuture initiative to develop a workforce that has the deep skills necessary for future competitiveness. Companies can tap on SkillsFuture initiatives such as the SkillsFuture Earn & Learn programme, which aims to match ITE and Polytechnic graduates with jobs that are relevant to their field of study. We also recognise that SMEs face particular challenges in developing a talent pipeline. The SME Talent Programme helps SMEs to attract talents from ITEs Polytechnics and Universities through student internships, study sponsorship and fresh hire training. SMEs can also tap on the SkillsFuture Mentors programme through which they can enhance their learning and development practices and put in place training plans and career progression pathways for employees.

Conclusion

15. To succeed in challenging circumstances, it is imperative that our companies seek to improve constantly and learn from the best. Awards ceremonies like these recognize the important contributions that outstanding companies have made to Singapore’s economy. More importantly, they provide an opportunity for other companies to learn best practices from the award winners and strive for excellence together.

16. I would like to congratulate the winners of the Singapore 1000, SME 1000 and Singapore International 100 awards. I would also like to congratulate DP Information Group and Ernst & Young for successfully organizing the 29th edition of the awards, which recognizes the biggest and best companies in Singapore.

17. Thank you.