Speech by SMS Koh Poh Koon at MPTC Annual Conference

OPENING ADDRESS BY DR KOH POH KOON, SENIOR MINISTER OF STATE, MINISTRY OF TRADE & INDUSTRY AND DEPUTY SECRETARY-GENERAL OF THE NATIONAL TRADES UNION CONGRESS, AT THE MANUFACTURING PRODUCTIVITY TECHNOLOGY CENTRE (MPTC) ANNUAL CONFERENCE ON 5 OCTOBER 2018, 9.05 AM, AT INNOVIS, FUSIONOPOLIS TWO

Friends who have come from afar – Kazakhstan and Korea,

Industry partners,

Trade association leaders,

Members of the NTUC family,

Colleagues from the various government agencies,

A very good morning.

1.            It is a great pleasure for me to join you here today. From the list of people that I mentioned earlier, you would imagine this is a "tripartite plus" event. We have gone beyond just tripartism. Today, we have academia, we have industry, we have government agencies and we also have union participation. All of you are our key partners and stakeholders in making this entire industry transformation possible.

2.            This is not my first time here. I have been supporting this event since 2016. The size of the event has grown significantly, and we are seeing international participation, which is a good sign that the drive for Industry 4.0 is taking on a lot more momentum here in Singapore. Let me congratulate SIMTech, Manufacturing Productivity Technology Centre (MPTC) and your partners for the good progress and keeping such momentum since we last met a year ago.

The manufacturing sector has grown from strength to strength

3.              Manufacturing is a key sector for Singapore, contributing around 20 per cent of GDP and accounting for around 13 per cent of our total employment here in Singapore. So it is an important sector that continues to generate good jobs, good pay and good career prospects for Singaporean workers. Since 2016, we have launched Industry Transformation Maps (ITMs) covering 23 industry sectors. These include five sectors which are in the manufacturing cluster, namely Precision Engineering, Electronics, Energy and Chemicals, Marine and Offshore Engineering and Aerospace Engineering. I chair this cluster of manufacturing ITMs and I am happy to see that over the last year or two, we are starting to make good progress in these sectors. Not just because of the ITMs themselves but because of the enthusiasm and the contributions from many partners – many of whom are here today. Each ITM charts a growth and competitiveness strategy to address the specific needs of the industry, and enable our businesses and people to seize future opportunities through four key pillars: jobs & skills, innovation, internationalisation, and productivity.

4.              At the same time, we see more of our local enterprises also seeing the value of investing in R&D, as a way to grow your businesses, improve productivity, and importantly for business, develop new products and services to help capture new market opportunities. This is reflected in the steady growth of business expenditure on R&D (BERD) by local companies, which has grown by 8 per cent annually from 2011 to 2016.  In concert with the Manufacturing ITMs, we have also rolled out the Future of Manufacturing (FoM) Strategy under the Research, Innovation and Enterprise 2020 (RIE2020) Advanced Manufacturing and Engineering (AME) Domain. Under this strategy, Singapore aims to continually enhance the base of technologies to advance our current manufacturing efforts. We are also identifying and developing areas of technology where Singapore can demonstrate leadership.

5.              Manufacturing is a key plank of our economy, which is why the Committee on the Future Economy (CFE) has decided to maintain the manufacturing share of GDP at 20 per cent for the medium to the longer term. This is because in this era of disruptive technology and Industry 4.0 transformation, product innovation is key for which you need a strong manufacturing base to be able to prototype and create new products and services. Maintaining core manufacturing and engineering capability is key to this process of transforming our economy for the future.

6.              Singapore is making good progress but we must continue to press on. According to the World Economic Forum’s "Readiness for the Future of Production Report 2018", Singapore is among the top 25 leading countries in manufacturing today that are also well positioned for the future of production. However, the report also notes that all countries have room for improvement, and as yet, no country has yet harnessed the full potential of the Fourth Industrial Revolution in production. There is no clear winner yet and we all have room have improvement.

7.              I think we are starting from a good base here in Singapore. If we can continue to act together, implement our strategies well, leverage on our strong “tripartism plus”, which includes academia and trade associations, we stand a good chance to be a leader in this field. Many of the challenges that we see coming cannot be solved by the private sector or public sector alone. And it takes a very collaborative effort between the public and the private enterprises in order to create new solutions to meet those challenges that may come. A collaborative platform for co-innovation is absolutely vital for us to win in this race and be a leader in Industry 4.0. 

The government supports public-private partnership platforms which help SMEs gain access to advanced technologies

8.              To implement the FoM strategy, A*STAR has created public-private partnership platforms to drive technology innovation, knowledge transfer, and adoption by Singapore’s manufacturing enterprises, particularly in our SMEs because they still form the bulk in the manufacturing sector. One such platform is Tech Access, which provides SMEs with access to A*STAR’s state-of-the-art advanced manufacturing equipment, facilities and expertise. This will enable SMEs to learn, prototype and experiment with new tools in additive manufacturing, inspection and robotics, without the need to make costly upfront investments by themselves. One of the initiatives is the Model Factory, which allows SMEs companies to see first-hand how advanced technologies can be scaled in the production line and to take a leap of faith after they have had the chance to visually see, inspect, touch, feel, and put their workers through the process. Hopefully, that removes the fear of stepping up. And I hope that companies will leverage on these platforms, instruments and tools that A*STAR has provided to help you take the leap into Industry 4.0.

9.            To increase the adoption of such technologies, A*STAR has been working with Trade Associations and Chambers (TACs) such as the Singapore Precision Engineering and Technology Association (SPETA) to reach out to our local enterprises. The trade associations can play a useful role, not just to broadcast information but to also share useful experiences of technology adoption, organise learning journeys, and also to convince fellow stakeholders to come on board. Ultimately, a competitive dynamic, sometimes, is needed to push people to come on board transformation. When you see your competitors adopt technology and grow their top-line and their market share, that is probably the strongest encouragement for fellow SMEs to step up and move ahead.

10.         Sanwa-Intec is a SPETA member that has benefitted from Tech Access. The company used A*STAR’s high-energy 3D X-Ray computed tomography (CT) system to perform scanning of plastic housing samples. The 3D X-Ray CT scan helped the engineers to locate issues with the plastic housing, and quickly rectify the problems. This would not have been possible with conventional scanning tools. These are tools that SMEs can utilise to gain advantage in their quality control and product design.

11.           SIMTech’s MPTC also embarked on the Technology Adoption Programme (TAP) with Enterprise Singapore (ESG)^[1] in 2016. The TAP supports collaboration among public sector research institutes, private sector technology providers, Institutes of Higher Learning, TACs and private sector system integrators to identify and translate new technologies into Ready-to-Go (RTG) solutions. SMEs can then deploy these RTG solutions to address productivity challenges and gain a competitive advantage from their overseas competitors. To date, MPTC has helped over 700 companies with close to 880 technology adoptions.

12.           One of the companies that has successfully adopted MPTC technologies is Racer Technology, a manufacturer of medical devices. The company worked with SIMTech to optimise its productivity, and further cut costs by adopting RTG solutions.  By adopting a solution for production planning, scheduling and tracking, Racer gained a 75% reduction in report generation time, 69% improvement in data capture and production planning time, and 75% improvement in shop floor visibility. I congratulate Racer for receiving the Productivity Partners Recognition Award, in recognition of the impressive productivity gains it has made.

The workforce of the future needs to have the necessary skills and agility to thrive in an economy faced with disruptive technology. The Government will support workers seeking to upgrade their skills.

13.         Such significant improvements mean that with the existing workforce they have, without adding new headcount, they have grown the ability of their workforce to meet increased demand. This is one way in which companies can save costs without having to lay off workers or to add on new workers. In business, rental is one big cost but another big cost is manpower. Productivity increases mean that, in relative terms, you are able to meet greater demand without raising the costs.

14.         To succeed, companies will need to ensure that your workforce has the necessary skills and agility to thrive in an environment that is rapidly changing due to technological advances. Here in NTUC, we say that to meet the challenges of Industry 4.0 head-on, you will need Worker 4.0. Your worker needs to be an Industry 4.0-ready worker, which means that the worker must be “Ready, Resilient and Relevant” to the emerging technologies that the industry needs. The worker has to be able to adapt to new changes. The worker needs to be able think deeply and has to have technology skills to be able to navigate the needs of the company as technology comes in. But more importantly, the worker has to have deep technical skills in their areas of expertise. And this is what we define as Worker 4.0 – one who is nimble and agile to meet their company’s needs.

15.         There will be uncertainty and discomfort amongst some of our companies and workers in this time of change – this is to be expected. It would be unusual for everyone to be cool and calm when faced with technology disruption and business complications. But we should not forget that in the midst of challenges lie opportunities. And those who can see where the challenges are, tackle them head on, overcome them and then turn the challenges into new opportunities, will be the ones who can seize new growth.

16.         Singapore is starting from a position of strength. We have a good education system and a good tripartite relationship. Unions, employers and government are working closely hand-in-hand to tackle these challenges. We have many platforms to enable workers to be trained, to cross into new domains, and to gain new skills to leverage on technology. We ought to look at ourselves, given this position of strength, and see how can we leverage on that to become true leaders.

17.         The biggest stumbling block today, in my opinion, is the resistance to changing mindsets. Employers who think that they can carry on their business as usual, who hope that Industry 4.0 will be a passing phase and think that they will be alright. I think that is a very dangerous assumption. The next hurdle is changing the mindset of workers who still think they can keep doing the same job for the next decade. That again is another dangerous assumption. If we can tackle both the employers’ and workers’ perspectives, we can use all the platforms that are available for both parties to leverage on and we can have greater momentum for change. We are investing heavily in our people’s training and in our technological capabilities over the years and we will continue to do so for many years ahead.

18.         The Government will continue to support skills upgrading of our workers and we will continue to support our businesses through providing platforms like Tech Access to be able to gain an advantage. We have rolled out a suite of measures in the past few years, for our workforce, including SkillsFuture initiatives, which aims to inculcate a culture of lifelong learning, as well as Adapt and Grow programmes, which help Singaporeans adapt to the changing job demands of the economy and grow their skills to be competitive.

19.         SIMTech has contributed significantly to the upskilling of workers in the manufacturing sector. MPTC, for instance, offers training for employees to adopt “lean practices” which improve productivity by eliminating or reducing non-value-added activities. One such company that has benefitted from this training is Bell Asia, a company that provides services ranging from state-of-the art customisation, to aircraft refurbishment, to Maintenance, Repair and Overhaul (MRO) solutions. Following the training at MPTC, the company’s staff were able to reduce the time for the picking of aviation parts by 50%, and shorten the lead time to return parts by 85%. The programme has been such a success that Bell Asia sent a second batch of their staff for training last month. Let me congratulate Bell Asia, which will also be receiving the Productivity Partners Recognition Award today.

20.           To spur digital transformation and innovation among local enterprises beyond the manufacturing sector, A*STAR’s SIMTech will be launching the new Digital Transformation and Innovation (DTI) programme, which has been developed jointly with SkillsFuture Singapore (SSG). The DTI’s objective is to train and guide key personnel of organisations to be Digital Transformers, champions in digitalisation, to accelerate business model changes.  I am pleased to note that NTUC Learning Hub and SPETA will be signing MOUs with SIMTech to license and conduct DTI in the manufacturing, food, retail, hospitality and many other services sectors. It is about developing the entire economy’s well-being, digitalising and transforming simultaneously, because there are cross-cutting issues where industries can complement one another – so it is about the whole ecosystem.

Conclusion

21.           Once again, let me congratulate SIMTech, MTPC and your partners on your strong collaborations, making this, truly, a "tripartite plus" event and platform. Working together, I am confident that we can accelerate the pace of industry transformation, and seize new growth opportunities brought about by some of these changes. But more importantly, to continue to create good jobs, good careers for our workers.

22.           I wish you a fruitful conference, and I look forward to seeing many more of such collaborations. And hopefully when we come back together here again next year, we will see even more participation and greater progress. Thank you very much.

[1] Previously SPRING.