SPEECH BY MR S ISWARAN,MINISTER OF STATE FOR TRADE AND INDUSTRY, AT THE ENTREPRENEUR OF THE YEAR 2006 ~ A ROTARY-ASME AWARD (EYA 2006) AWARD PRESENTATION CEREMONY, 8 SEPTEMBER 2006, 7.30 PM

Mr Lawrence Leow,

President,

ASME

Mr Stan Low,

President,

Rotary Club of Singapore

Mr Tan Ngiap Joo,

Deputy President,

OCBC Bank

Distinguished Guests,

Ladies and Gentlemen, 

Introduction

I am very happy to be with you this evening at the Entrepreneur of the Year 2006 Award Presentation Ceremony - co-organised by the Rotary Club of Singapore and the Association of Small and Medium Enterprises, ASME.

The Rotary Club of Singapore and the Association of Small and Medium Enterprises are long standing contributors to the development of entrepreneurship in Singapore.Inaugurated in 1989 by the Rotary Club of Singapore and joined by ASME in 1992, tonight’s awards are among the most respected and celebrated accolades for Entrepreneurs in Singapore.

The Rotary-ASME Entrepreneur of the Year Award has an added distinction from a societal perspective.Its rigorous and comprehensive judging criteria assess an entrepreneur not only on his or her vision and business acumen, but also on social responsibility and ethics.It underscores the point that whilst economic profit and growth is central to a business, it must be underpinned by sound ethical principles and good corporate citizenship.The nominees for the Rotary-ASME Entrepreneur of the Year Award epitomise these attributes and I would like to congratulate all of them.

Entrepreneurial Activity is Healthy in Singapore

By any account or measure, entrepreneurs are the lifeblood of our economy.The very nature of your activity and enterprise injects a certain dynamism, cutting edge and derring-do into our economy.Your risk-taking ability and commercial judgement ensures that we remain nimble and adaptable in the face of new opportunities and challenges.

Entrepreneurs are significant stakeholders in Singapore.A vast majority of entrepreneurs are owners of the 130,000 SMEs in Singapore.SPRING Singapore estimates that our SMEs account for 99% of all enterprises, both local and foreign; 56% of employment; and contribute some 42% of our Gross Domestic Product[1].

The 2005 Global Entrepreneurship Monitor report shows an overall increase in entrepreneurial activity from 4.2% in 2000 to 7.2% in 2005, reflecting a rise in new business start-ups. The global average was 8.4% and the US figure was 12.4%.ACRA’s records also show that net enterprise formation more than doubled to an average of 18,000 a year between 2002 and 2004, from 8,100 over the preceding 10-year period.These trends affirm that the growth of entrepreneurship in Singapore is healthy but also that there is more that we can do

Significant Opportunities Ahead - Springboard to the Region

It could be argued that there has been no more conducive time than the present to be an entrepreneur in Singapore.Let me elaborate.

Firstly, we are favoured by geography.We are witnessing in Asia today the unprecedented phenomenon of consistent and sustained growth in the major economies of China and India. China’s economy has had average annual growth of about 10% over the last three years; India’s has been about 8%.And the forecast for the next couple of years is not very different, barring any unexpected events.This coupled with the recovery of the long stagnant Japanese economy, makes for one of the strongest macroeconomic environments in Asia in a long time.

The economic rise of China and India has been accompanied by a commensurate growth in the middle class of both countries, particularly in the urban centres.The higher and rising disposable income of this population segment has fuelled an increasing demand for financial and telecommunications services, healthcare, education, electronic products, and FMCG.These offer significant opportunities for our entrepreneurs.

Secondly, we can serve as a gateway to all of Asia, rather than just particular markets.An entrepreneur in Singapore, for example, can access the Chinese and Indian markets equally because of our political ties, cultural affinity and business linkages.Our trade and investment statistics attest to this.

a. The China-Singapore trade relationship has grown significantly in both scale and depth over the past decade.Bilateral trade in 2005 reached a record of US$33.15 billion, a 26% increase over 2004. China is now Singapore’s 4th largest trading partner while Singapore is China’s 7th largest trading partner[2].

b. Indian statistics show that Foreign Direct Investment inflows from Singapore to India jumped from US$62.1 million in 2004 to US$321.4 million in 2005. This made Singapore the third largestsource of Foreign Direct Investment (FDI) inflows into India for the year 2005[3].

Our network of 10 FTAs further enhances our business connectivity, especially within the region.In particular, we have the CECA with India, the JSEPA with Japan, and the ASEAN-China Trade in Goods Agreement which has been in force since July 2005. Singapore is currently negotiating an FTA with China.

Thirdly, Singapore continues to provide a good environment for Entrepreneurs and Businesses to grow and succeed.Each year, the World Bank publishes its report on “Doing Business” which investigates the regulations that enhance business activity and those that constrain it.The Report this year covers 175 countries and focuses on the ease of doing business in 10 broad areas including starting a business, dealing with licences, employing workers, getting credit, trading across borders, protecting investors, and enforcing contracts.

In last year’s “Doing Business” report, Singapore overtook the United States and was ranked second behind New Zealand in terms of having the most business-friendly regulations in the world. In this year’s report, released on Wednesday this week, Singapore has been ranked as the easiest place to do business, just ahead of New Zealand.

Our Businesses and Entrepreneurs have Benefited

Whilst such rankings are useful indicators, the ultimate test is whether businesses have been able to benefit from Singapore’s positioning.On this score, it is heartening that the experiences of several of the 15 winners of the Entrepreneur of the Year Award here tonight attest to Singapore’s strength as a place to do business and a springboard to the region.For example,

a. First Media is Singapore’s largest integrated communications consultancy group with over 20 creative studios in Singapore and the region.

b. Modern Montessori International Group has today grown into a network of more than 40 teacher-training and pre-school education centres across the Asia-Pacific region.

c. Wavex Technologies (which specialises in solutions and products for RFID and wireless technologies) having made inroads in the Singapore market with ongoing projects in Thailand and Malaysia, is now scouting for opportunities in Hong Kong and China.

Innovation

These are promising developments and we look forward to more of such successes.Meanwhile, the Government will continue with its commitment to maintain a business-friendly environment and implement initiatives in support of entrepreneurs.One area is Innovation.

To sustain competitiveness in a knowledge-based economy, our entrepreneurs and enterprises must increasingly leverage on innovation and technology.I am therefore encouraged that Rotary-ASME has included an innovation category in this year's award.It is a timely initiative.

We need to develop a vibrant pool of entrepreneurial SMEs who are able to harness the potential of technology for process and product innovation. With this in mind, the Government launched its $150 million Technology Innovation Programme last month.Driven by SPRING Singapore, the Technology Innovation Programme, or TIP in short, aims to strengthen technological innovation in our SMEs.

Conclusion

In conclusion, the outlook is bright for entrepreneurship and enterprise creation in Singapore.We have significant and growing opportunities in the region. Singapore is well positioned and connected to serve as a centre to tap these opportunities.And the Government is committed to maintaining and enhancing the business environment.

On this note, I would like to congratulate all the winners tonight’s awards wish them continued success.