Opening Speech by Mr Lee Yi Shyan Minister of State for Trade & Industry at the official launch of the IE Singapore Advisory Centre, 14 May 2008, 10:45am
Distinguished Guests,
Ladies and Gentlemen,
Good morning.
It is my pleasure to officiate the opening of the IE Singapore Advisory Centre today.
SMEs’ Internationalization – Trends and Challenges
Singapore’s SME community is vibrant and growing. Making up over 90% of enterprises in Singapore, SMEs contributed about 42% of our GDP and employed more than half the workforce in 2007.
Many of our SMEs have embraced a global outlook to seek further growth opportunities. Based on DP Information’s SME Development Survey last year, 70% of the 10,000 SMEs surveyed have ventured abroad, up 11% from 2006.With growing overseas revenues, many SMEs are moving beyond our traditional markets and into emerging markets like Vietnam and India.
Size can be a limiting or enabling factor for SMEs. Whilst having fewer resources, successful SMEs thrive on being responsive to changes in market conditions and nimble in catching new opportunities. There are many success stories. F&B company Bakerzin, for example, now has franchises in regional cities like KL, Jakarta, Penang, and Shanghai, and it opened its first US outlet in Arizona last year. Shoe retailer Charles and Keith can be found in over 20 markets within the Asia Pacific and Middle East.
Government’s Enabling Role to Boost SME Growth
While SMEs drive their own growth paths, the Government plays an enabling role in enhancing their competitiveness. SPRING Singapore looks into the local development of SMEs, while IE Singapore helps them identify overseas opportunities and gear up to venture abroad. Our agencies work closely to understand the challenges that SMEs face, such as in creating unique value propositions, talent management, gaining market access and finding good business partners.
Our efforts to help companies expand overseas are undertaken through three broad three ways. Let me elaborate.
(i) Growing our economic space through trade linkages
First, we grow our economic space through building trade linkages. Ultimately, frameworks such as Free Trade Agreements can only bring economic benefits when companies tap on them. We thus set out to promote companies’ awareness of FTAs and how to use them. In 2007, IE helped over 350 SMEs tap on our FTAs through in-depth consultation sessions. Mothers En Vogue was one company that tapped on the Singapore-Australia FTA. Its clients enjoyed over 17.5% savings on the import of maternity wear and related products, and its export sales grew by over 1,500%.
(ii) Providing tools for companies to build up knowledge, resources and capabilities for internationalization
Second, we provide assistance programmes to facilitate SMEs’ access to resources and development of capabilities required for internationalization. We are happy to hear from many SMEs that financing is less often a top challenge nowadays, with various government-supported loan programmes, such as the Internationalization Finance Scheme, and overall commercial interest in the SME loan market. This is good progress made by SPRING Singapore and IE Singapore in collaboration with financial institutions.
Manpower is a key element amongst individual firm capabilities. One ongoing initiative is the International Business Fellowship, or IBF, programme, which supports in-market training for executives in emerging markets. Parkway Thai Restaurant tapped on this to train two employees in China before setting up outlets in Tianjin and Chengdu. Apart from China, IBF also supports training in India, Vietnam, the Middle East, Central Asia, Russia and Latin America.
(iii) Facilitating developmental partnership opportunities
Third, besides providing direct assistance, we also want to help companies to find developmental multipliers whom could help connect to more resources and opportunities. Thus, we engage partners in our programmes and provide platforms for companies to seek out further services and assistance. For example, the International Marketing Assistance Programme, or IMAP, supports trade associations and chambers in the organizing of business missions and international trade fairs. Through such events, SMEs can meet fellow companies and leverage on the associations to explore sector specific issues.
Announcement of Two Enhanced Initiatives
Over the last two years, 26,000 SMEs have used IE’s programmes to develop their competencies, extend market reach and access capital for overseas growth and export. We continue to provide tools and platforms which are accessible and flexible to cater to companies’ needs and readiness. Today, I am happy to announce two enhanced initiatives by IE Singapore.
$20m Internationalization Capability Development Programme
First, the $20 million Internationalization Capability Development Programme or iCDP, will support local companies on capability development projects in areas such as branding, design, IP, franchising and licensing, financing, M&As and joint ventures and overseas market entry. This is an enhancement from the previous IE offerings, with a holistic framework to support a range of capabilities in a flexible manner. Between 250 to 300 companies are expected to benefit from this programme over the next three years, of which about 70% are expected to be SMEs.
New Advisory Centre to help SMEs export and venture abroad
Next, IE Singapore’s new Advisory Centre, which is a one-stop center to guide Singapore companies venturing overseas. This center completes the value-chain of advisory and information services provided by IE Singapore. With enhanced services and partnerships with advisors, trade associations and embassies, the Advisory Centre will enable IE to provide a more holistic customer service experience.
Conclusion
I urge SMEs to tap on the new Advisory Centre for your internationalization needs. Many of our partners are here today, and I take the opportunity to thank them for the support.
Thank you.