Speech by Mr Lee Yi Shyan, Minister of State for Trade and Industry, at the Global Brand Forum 2006, Monday 6 November, 8.45 am

Good morning

Distinguished guests,

Ladies and gentlemen,

I would like to add my warm welcome to you for participating in the Global Brand Forum 2006. To our overseas visitors, I hope you will also find your stay in Singapore enjoyable and fruitful.

The Singapore Brand

For those of us who travel regularly, I wonder what your first thoughts are each time you land in a new country. For our overseas visitors, what might be your thoughts of Singapore?

My job takes me to many countries. When I meet with political leaders and businessmen from other countries I often receive compliments from them on Singapore. Of course, it is possible that people make compliments as part of exchange of pleasantries. Apart from that, I believe many overseas friends truly have some positive opinions about Singapore.

Many Chinese officials, for instance, like to know the secrets behind sound management and governance. One senior leader from Shanghai asked how Singapore civil servants motivate themselves to such high levels of professionalism and efficiency. Some of you might also be aware that through the China-Singapore Suzhou Industrial Park (CS SIP), more than a thousand officials from Suzhou have taken training courses in wide-ranging fields including urban planning, social security systems and medical insurance programs, industry development and environmental engineering.

Many other developing countries similarly hold Singapore in high regard. Countries from Southeast Asia, for instance, send officials here for training to understand how we transformed Singapore from the Third World to First in a matter of 40 years. They are keen to learn Singapore’s “software” – the operating know-how of combining factors of production with human capital into a system that generates wealth and improves the well-being of its citizens.

Even in the Middle East, a region traditionally more disposed to the West for capital, technology and know-how, think highly of Singapore’s growth story. Compared to countries closer to Singapore, many Middle Eastern elites know less of Singapore. But even this knowledge gap has not deterred them from wanting to learn from us. In fact, Saudi Arabia is building a City of the Future called the “King Abdullah Economic City” (KAEC). In a brochure shown to me, there is a tagline that says: “KAEC – A Singapore in the Middle East”.

I visited Tatarstan and Tomsk two weeks ago. Over there, we explored how Singapore might be involved to help them carry out master-planning and building of their Special Economic Zones. One Russian official mentioned to me he had Minister Mentor Lee Kuan Yew’s Memoirs on his desk as a constant reference. He reads the book from time to time to understand what it takes to transform a city. During the World Bank-IMF meeting, a Commerce Minister from an oil-rich Latin American country asked me if there was one book that summarized the success formulae of Singapore. Subsequently, I mailed him several books on Singapore. It is therefore not an exaggeration to say that Singapore’s developmental model invites admiration and curiosity from developing countries near and far.

What is behind this “Singapore reputation” that others seek to learn?

Oxford dictionary defines reputation as “the beliefs or opinions that are generally held about someone or something” or “a widespread belief that someone or something has a particular characteristic”. If you ask around, people may associate Singapore with such characteristics as “green, clean, efficient, disciplined, reliable, of high quality and dynamic”. Hopefully, over time, people will also begin to associate Singapore with other more emotive characteristics such as “innovative, colorful, fun and buzz”.

Reflecting on these feedback and comments from our foreign friends, I can make a few observations about Singapore’s reputation.

The first observation is that our reputation began with a clear goal of where we wanted to be. While it might not have been our first generation leaders’ intention to build a reputation per se, they were very clear in wanting to create an environment that would differentiate us from the rest in the region. They realized that this would be crucial in convincing foreign capital to invest in Singapore. In other words, Singapore needed to create a first world environment amidst a third world setting.

Exactly what constituted a first world environment for business? To answer this question we asked the would-be investors then. Clearly, we knew from our early days that investors demanded clarity, certainty and predictability in our business and operating environment. They detested bureaucracy, corruption and an unleveled playing field. So our pioneering generation went out to create an environment with these qualities.

At the firm level, I believe the first step in building a successful brand is to define a clear goal of where the firm wants to be with respect to its customers and competition. Then, with a good understanding of customers’ needs, the firm can proceed to define its business strategy and processes to deliver the products or services. A clear and sound positioning sets a firm apart from competition. It enables the firm to define its own space in an often crowded market space.

The second observation is that Singapore’s reputation was built with repetitive consistency. In implementing our policy on economic development for instance, we had to adhere to a set of principles that were consistently pro-business in nature. Without a set of consistent policies, businesses would simply not risk investing billions of dollars in Singapore. In fact, the lack of policy consistency in many developing countries had deterred them from attracting foreign direct investments. It had prevented them from making progress and meaningful development.

In building a successful brand, firms need to deliver their products or services with repetitive consistency. No successful reputation or brand can be derived from providing products and services that are of inconsistent and inferior qualities.

If we look at the automotive industry worldwide, we know that competition is intense. Many largest players are losing money except for a few. One of them is Toyota.

How does Toyota do it? How does it generate billions of dollars of net profit while others car makers struggle to keep afloat? I believe car buyers nowadays are willing to pay a premium for quality and durability. Car buyers are tired of cars that breakdown often and require regular service and maintenance. In this respect, Toyota has consistently delivered high quality cars.

The third observation I would draw from Singapore’s experience is that reputation is backed up by numerous mundane but painstaking processes behind the scenes.

In developing our economy from the third world to the first, our pioneering generation had to work on so many areas and processes, almost simultaneously and in parallel.

Consider the early days of our industrialization program. Almost overnight, many systems and processes had to be installed in preparation for investors knocking on doors, wanting to connect utilities and telephone to the plants, wanting to hire and train workers, wanting to start construction and needing building plans approval.

At the national level, many policies had to be coordinated so that businesses would not be made to run in futile circles. Even today, we still improve our systems and processes continually by simplifying, eliminating them to better serve our businesses.

Today, many rating international agencies consider Singapore as one of the world’s easiest places to set up business. But one should realize that behind the scenes, there are painstaking process coordination and discipline to deliver results.

Contrary to the romantic and tantalizing imageries portrayed in many advertisements, a powerful brand is, I believed, a promise made good by numerous mundane but disciplined processes. If you consider the example of Singapore Airlines, you will appreciate the fact that the real work in building a successful brand takes place behind the advertisement “Singapore Girl – You Are A Great Way to Fly” in newspapers or on TV. The promise of an “Inflight Service that even other airlines talk about” is delivered through numerous processes in maintenance, operations, human resource and by tens of thousands employees manning the call centers, ticketing counters, airport lounges, baggage belts, and hangers. The good looking stewards and stewardesses are supposed to bring a sense of calm and cheerfulness to the tired passengers and hide all the complexity from the passengers.

Given that any airline has to operate in many airports across geographies and cultures, for SIA to attain a high level of consistency through the thousands of staff, I imagine, must be an extremely challenging task. If SIA is any less rigorous in its training of staff and in its demand for staff to adhere to standard operating procedures and processes, and if SIA does not have many dedicated staff committed to the mundane processes and operations behind the glamorous scene, it will not have been able to build up a consistently high level of service. The promise of “an inflight service even other airlines talk about” would have been broken. But we should never think that an airline reputation is solely built within the cabin.

There are many examples of mundane but disciplined processes powering successful brands from behind the scenes. Toyota for instance is famed for its quality. The company had pioneered many best of class quality processes that even other automotive companies have started to incorporate onto their own shop-floors. Samsung has now become an icon of innovation. To keep up to this branding, Samsung has invested heavily in R&D, and maintains a very tight schedule of new product introduction. In the hospitality sector, luxurious hotels such as Raffles, Ritz Carlton and Shangri La take great pains to train their staff, and have elaborate work processes to deliver superior services that delight customers. Processes are not front line, mostly invisible to customers and mundane, but critical to superior delivery of services.

Leveraging National Branding

How will a strong national reputation lend support to product and services created in this nation? Can our companies leverage on the nation’s reputation characteristics to build their own product or services brands? Will Singapore’s reputation of “reliable, trustworthy and high quality” be easily transferred to the companies here?

There are many brand experts in this forum. I will leave you in their good hands to discover the answers.

Before I leave the podium, I would like to make a small announcement. Come 13th November, IE Singapore will be launching BuySingapore.com, a national branding initiative to promote about 100,000 Singapore companies to the world. Aiming to establish itself as Singapore’s single most comprehensive e-channel, BuySingapore.com will build on our established “Singapore Brand” of reliability, quality and high value-add. This portal aims to help Singapore companies market their products and services to international markets by matching them with overseas buyers.

I urge our companies to think deeper about how they can leverage on the Singapore Brand to create a niche for themselves.

Thank you.