1. I rise to thank the President and speak in support of the President’s Address.

2. As the President said, we stand “at an important moment of our history”. Singapore has done well, but if we are to continue to do well in the next stage, we will have to carefully chart the journey ahead and press on together.  I will focus on the economic domain – how we can keep our economy vibrant, enable Singapore businesses to grow and thrive, and create good job opportunities for Singaporeans.

3. We believe that the economic outlook would be positive moving forward. We are cautiously optimistic. The US and the Eurozone are recovering. Asia continues to be resilient with a rising middle class. However, we face stronger competition, as well as fundamental domestic resource constraints, especially for land and manpower. Businesses, big and small, will need to adapt and adjust to these realities. The government will help our businesses make the necessary adjustments.

4. A vibrant economy, with strong and growing companies, is critical to providing good and diverse job opportunities – jobs that Singaporeans want, jobs that Singaporean workers with different strengths and aptitudes can excel in, jobs that give Singaporeans the chance to upgrade and improve their lives.

5. The government is pursuing a wide range of initiatives. We are investing in R&D, helping firms to raise their productivity and acquire new capabilities, encouraging new start-ups and innovation. We are working hard to keep business costs manageable, building new industrial spaces and ensuring that energy is competitively priced.  We are also continuing to expand our network of free trade and investment guarantee agreements to help businesses export and invest overseas. This is critical because Singapore is small and many of our businesses need to serve the international market to grow and thrive.

6. So how can we help the SMEs to strengthen themselves? The Government understands the difficulties that our companies are facing, particularly the very small ones. We are committed to providing strong support for SMEs during this transition.

7. We need to upgrade their capabilities to strengthen them to position them for growth. For some it’s about survival, but for all, we try to make our schemes and programmes accessible and inclusive. One important way is to educate them and help them build capabilities through tapping on technology.

8. Since July 2013, we have engaged more than 2,500 companies to understand their technological needs and benefitted more than 300 companies[1]. We will continue to push ahead with this effort to implement technology into their businesses and processes.

9. For example, through technology matching, Manja Delights Kitchen, a family business in Taman Jurong, implemented Snap2Tell, an image recognition technology developed by A*STAR. By scanning Manja Delights Kitchen’s logo and name card, potential customers are able to access their menu as well as place orders of kuehs online. This reduces the number of phone calls from customers, hence increasing the owner’s capacity to do what they do best – making kuehs. So they focus on their core competencies, and outsource the rest. Technology has helped them to streamline the processes.

10. We will also facilitate collaboration between SMEs and large organisations to come together, so that SMEs can gain experience, improve their quality of goods and services, and develop a track record.

11. Since 2013, SPRING has helped 193 SMEs partner with large organisations through 51 projects[2]. We will continue to provide strong support for such collaborations and projects so that SMEs can continue to upgrade their capabilities through these various initiatives.

12. Manpower is a fundamental constraint for Singapore. We cannot grow our workforce indefinitely.

13. SMEs therefore need to adapt and push for higher productivity. They can bring about sustainable and quality growth if they raise productivity. Many companies have been successful in doing that. Dian Xiao Er, a Chinese restaurant famous for its herbal roast duck dishes is one such company. It has raised productivity through several methods, including outsourcing of some food preparation like cutting and marinating of meat to its food manufacturer, using biometric readers to record staff attendance, and training staff to improve on their service delivery.

14. These are the SMEs who have changed their mindset, believed in efficiency, improved their efficiency and strengthened their position in the marketplace.

15. To date, half of the $2b National Productivity Fund has been committed, with much of this going to SMEs. The Government has also set aside more than $300m for the next 3 years to support SMEs in restructuring.

16. Beyond funding, we will continue to ensure that the broader ecosystem of support is in place. To ensure that government grant and schemes are accessible, we are continuing to simplify grants and application procedures, and expand the network of SME centres to help the SMEs.

17. Talent is important. So in the coming years, MTI will partner MOM, MOE and the industry to prepare Singaporeans for the specialist, managerial and leadership roles in the economy. We want Singaporeans to have meaningful careers, good jobs that help them to realise their dreams and aspirations.

18. Our SMEs employ 70% of our workforce, and play a major part in contributing to the economy. They are the backbone of the economy. So SMEs need well trained and talented Singaporeans in their companies. They need motivated Singaporean workers who can find meaning in their work, and will help take our SMEs to the next level.

19. The Government will help SMEs to be employers of choice. We will actively help to connect graduating students with SMEs. We have the SME Talent Programme. Since it was launched last year, we have already matched almost 400 graduates from Polytechnics and ITEs under internships or for job employment to local SMEs in the F&B, retail, services, manufacturing and engineering sectors.

20. We need to continue to work closely with our Trade Associations and Chambers and hope to match 4,000 students to SMEs over the next 5 years.

21. But at the same time SMEs need to make themselves good employers. They have to put in place good compensation packages, good human resources practices and be able to plan a good and rewarding career path for these graduates. We will need to prepare these SMEs to be able to recruit these talents. So we will help them through various grants and schemes to acquire such expertise and revamp their approach to talent management. These SMEs need not be large ones. They can be small or micro-enterprises. As long as they are willing to change their mindset to put in place a good system, we will be there to help them.

22. Given the small size of our domestic economy, businesses in Singapore need to serve not just Singapore, but the world. SMEs should ride on the growth of Asia, as well as the continued recovery in the US and Europe, to seize growth and opportunities.

23. There are two aspects to this. First, we will continue to enhance international economic linkages and improve our trade infrastructure so as to increase the opportunities for our businesses.

24. We have an extensive network of 21 Free Trade Agreements (FTAs) and Economic Partnership Agreements with countries such as China, Japan, Korea and United States.

25. On-going negotiations of the regional FTAs such as Trans Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP), as well as with individual countries such as Turkey, will further enhance our trade position and help our businesses.  

26. FTAs help our businesses to reduce costs, lower risks and enter new markets. For example, the European Union-Singapore FTA (EUSFTA) is the first bilateral FTA which will allow processed Asian food products made in Singapore, such as chicken and pork floss, samosa, canned luncheon meat, fish balls and crab balls, to enter the EU tariff free, within an annual quota.

27. Second, we will continue to help our companies leverage on the trade networks we have developed to internationalise more successfully, and to become globally competitive players.

28. IE Singapore has in place a comprehensive system of support to help companies to successfully internationalise by helping them gain access to the information, overseas networks, and financial support that they need. For example, some companies have tapped on IE’s schemes to set up offices overseas, others have tapped on IE for their market research. 

29. In 2013, IE assisted over 26,000 companies, including the provision of S$42million in grants and facilitation of S$774 million in trade financing.

30. Talking about start-ups and new companies, we need them to revitalise and rejuvenate the trade and business sector. There will be companies that will not find space or survive in the new way moving forward, and there will be new companies that want to try to find their space. We have to help them all. We need more new, innovative companies. So apart from helping established businesses and SMEs, the Government will continue efforts to ensure a conducive ecosystem to support the growth of start-ups. With the maturing of our entrepreneurial landscape, we will be reconstituting the Action Community for Entrepreneurship (ACE) I used to chair, into a private sector led entity, to allow the private sector a greater role in shaping a dynamic entrepreneurial community. At the same time, we will continue to plug funding gaps for innovative start-ups with novel and disruptive ideas.

31. As I have announced before, the success of Block 71 at Ayer Rajah Crescent forms a very a closely-knit entrepreneurial community. We will expand that area to include two more blocks and the whole area will be called the JTC LaunchPad @ one-north that will provide a further boost to our start-up scene in Singapore, and hopefully attract more capital to Singapore to help our start-ups.

32. Singapore has limited land, and our land prices and rents reflect this. We will continue to monitor it and explore different ways to make the best use of the land and space that we have.

33. There is a substantial supply of space which will be coming onto the market. Rents for space are therefore likely to moderate in the medium term. However, simply adding more space is not a sustainable solution. We have to explore different ways. Sometimes when the rent increases, whether from different organisations, there is some impact. There is a signalling effect but it may not be a dominating effect. So we believe that there is a need to provide more information for tenants and landlords as well to make more informed decision. We will continue to explore ways to ensure that this information is available by end of the year.

34. We will also build customised solutions or buildings, no-frills facilities for different clusters, industries and sectors. JTC has pioneered high-rise infrastructure solutions and specialised facilities, and will continue to do more.

35. For example last week JTC launched JTC Space @ Tampines North. The development integrates land-based facilities with high-rise, multi-user factories. It has been specifically designed for SMEs involved in heavier manufacturing activities to be flexible, and future-ready. High floor loading and wide corridors allow traditionally land-based industries to go high-rise.

35. Government will also work to ensure that the market functions in a fair and balanced manner by increasing data transparency for retail and industrial space, so that businesses are able to make an informed decision on their tenancies. URA has recently made median rental of retail space by street name freely available. We will be working closely with URA and IRAS to further refine this retail rental data, and to provide this at an even more granular level towards the end of this year. The key trade associations are studying the development of a framework of best practices for lease contracts.  We encourage that, and I believe that they will be recommending the framework very soon – the code of best practices, the guidelines of best practice. If we can come out with a guideline of best practices, it can enable good and fair practice for both sides. Government is supportive of this industry effort.

36. Over the next three years, around 40,000-45000 young Singaporeans are expected to enter the job market each year. Two-thirds will hold PMET jobs. We need to transform our economy to create good jobs that cater to the aspirations of this workforce to provide sustainable wage growth to enable Singaporeans to improve their lives.

37. It is not going to be easy for businesses and local SMEs. We understand, and I have always mentioned that the Government will always be with SMEs throughout this journey.

38. The President noted in his address that just as our pioneers overcame formidable obstacles with grit and determination, we too must create our Singapore of tomorrow.

39. Over the last half century, Singapore's economy has performed well, but this did not come by chance. We have consistently taken proactive steps to ensure that our people and businesses are well prepared for the future and we are still doing that. We have not shied away from making difficult decisions. We have maintained strong economic fundamentals such as an open and business-friendly environment, good governance, sound infrastructure, a highly educated workforce and, most importantly, a stable political climate and position in Singapore. Many businesses are encouraged because we have a very stable political climate in Singapore. We cannot take that for granted because we must get the fundamentals right.

40. For Singaporeans, moving forward, we want to provide them with good jobs. That's the fundamental objective of what MTI does. We want to continue to inject vibrancy into the economy so that we can achieve our vision in future. Thank you.

 

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