SPEECH by Mr lim hng kiang, MINISTER for trade and industry, AT THE SBF Forum on “Generating Business Opportunities” in conjunction with the Launch of the SBF Global Sourcing Hub on FRIDAY 13 january 2006 AT 9.15 am, AT suntec singapore international convention exhibition centre, ballroom 3, level 2
Mr Stephen Lee, Chairman, Singapore Business Federation
Distinguished Guests
Ladies and Gentlemen
Good Morning
Introduction
I am very pleased to join all of you this morning for the Singapore Business Federation or SBF Forum, as well as to launch a new initiative for our SMEs – the SBF Global Sourcing Hub.
Engaging Industry Leaders
In an increasingly fast-paced and competitive global economy, industry leaders such as the chambers and associations have a significant role to play in developing the industry and supporting our enterprises in internationalising. They know the unique problems and challenges faced by our enterprises, and are in the best position to partner with the Government to develop and grow our enterprises.
It is in this spirit that in May last year, the Government launched the $50 million Local Enterprise and Association Development programme, or LEAD for short.LEAD seeks to improve the competitiveness of our industries and enterprises by strengthening able and willing industry associations to lead various industry development efforts.
I am pleased to hear that more than ten associations have submitted their proposals for evaluation. In the coming months, we will be announcing the list of associations which have successfully obtained LEAD funding.
In addition to the LEAD programme, the Government is partnering with the apex business chambers and associations in the setting up of Enterprise Development Centres, or EDCs. These EDCs provide support to businesses in the form of advisory and consultation services. Since March last year, 3 have been launched by the Association of SMEs, Singapore Manufacturers’ Federation, and Singapore Chinese Chamber of Commerce and Industry. More are currently in the works.
Improving Market Access
Besides partnering the industry leaders in developing industry competence, the Government also constantly engages them in the push for our local enterprises to venture into overseas markets.
Together, we actively connect the businesses with overseas markets through outgoing business missions and trade fairs. We also organise “reverse missions” by bringing large and established companies to our SMEs.
In addition, our comprehensive Free Trade Agreement network helps create new market opportunities for our enterprises.Thus far, Singapore has concluded FTAs with the United States, the European Free Trade Area, New Zealand, Japan, Australia, and Jordan.
We have also stepped up efforts in increasing the awareness of our FTAs and their benefits among the local business community. Various government and industry bodies organise seminars to reach out to the SMEs. SPRING has also published SME Guides on FTAs. To date, some 16,000 SMEs have been reached through these efforts.
I am heartened to note that more and more of our SMEs are expanding into overseas markets as their main growth strategy. A recent SME Development Survey conducted by DP Information Group revealed that some 69% of the respondents have sales generated from overseas with 18% reporting sales of 70% or more from overseas markets.
Nevertheless, more than half of the respondents also cited difficulty in gaining access to business opportunities in the same survey. It is clear that more can be done to facilitate market access for our SMEs.
Tapping On New Procurement Trends
Increasingly, MNCs and other large organisations are conducting their procurement activities online.This is hardly surprising as conducting procurement activities over the Internet brings about significant savings and efficiency gains to businesses.Some examples of such procurement portals include private sector ones such as Hospitalitybex and TradeOneAsia, as well as the Singapore Government eBusiness portal or GeBIZ.
Our SMEs need to recognise the opportunities that arise from online procurement activities, and ride on such evolving procurement patterns among these large organisations. The Government understands that SMEs may not have the resources to adapt to each of their customers’ procurement needs.To help our SMEs gain access to the growing online marketplace, the Government has embarked on some initiatives.Let me briefly recap some of them.
In 2005, the Government waived the fee for the first GeBIZ user account for each supplier and removed the need for track records as a criterion for supplier registration under the Expenditure & Procurement Policies Unit or EPPU.These efforts have contributed to an increase in the number of registered suppliers by about 50% to more than 17,000 within one year.
In addition, SPRING Singapore facilitated the development of a notification service called Business Alert in November 2003.This service allows SMEs to monitor some 50,000 Government tenders and request for quotations throughout the year by notifying them of new business opportunities via email and SMS.
Business Alert has since expanded in scope to include procurement opportunities from other Governments of our FTA-partner countries such as the US, Australia and New Zealand.To date, Business Alert has broadcasted more than 190,000 tender and quotation opportunities to our businesses.
SBF Global Sourcing Hub
Today, we are launching the SBF Global Sourcing Hub to further help our SMEs improve their market access to both local and overseas buyers.I am happy to see that SBF, with assistance from SPRING as well as other strategic partners, has taken the lead as our apex business chamber to spearhead the development of the Hub.
The SBF Global Sourcing Hub will serve as an e-marketplace to bring about significant benefits to both buyers and sellers.For the buyers, they will be able to broadcast demand opportunities such as tenders, quotations, agency rights and interests for collaboration to a wide base of interested suppliers.The Hub will also offer value-adding services such as credit information on suppliers to help buyers make informed procurement decisions.
For the suppliers which are mainly SMEs, the Hub will provide them with instant access to global business opportunities.To date, more than 100,000 suppliers in Singapore are listed on the online directory. The hub will allow these suppliers to showcase their products and services.In addition, it will leverage on the existing Business Alert service to provide customised opportunity alerts to the suppliers.
SBF expects strong interest in this new initiative.In a recent survey among its members, more than half the respondents indicated interest in participating in this initiative. I am pleased to learn that several buying organisations such as ST Electronics, JurongPort and Ho Bee Print will be leveraging on the Hub for their procurement needs.I am also encouraged to learn that SBF and its partners aim to achieve some $20 billion worth of business deals through this channel within 5 years.The benefits of such a sourcing hub can be realised only with a critical mass of buyers and suppliers.I urge SBF to make use of its extensive networks and contacts to bring in more members and associates.
The SBF Global Sourcing Hub is indeed an exciting initiative which extends the borders for our local enterprises, especially SMEs.To enhance the international reach of this initiative, SBF should continue to explore hub-to-hub connectivity with other similar regional transaction hubs.Such increased connectivity will in turn enhance our SMEs’ access to more overseas business opportunities.I encourage all of you to be part of this new and global marketplace.
Conclusion
In addition to the launch of the SBF Global Sourcing Hub, I am told that today’s forum will highlight the importance of credit risk management in business transactions as well as share some insights on international sourcing.These are key information that SMEs need to equip themselves with to fully capitalise on the various international business opportunities.I hope that all of you will find today’s session a fruitful one.
Thank you and enjoy the rest of the forum.