Opening Address by Mr Lee Yi Shyan Minister of State for Trade & Industry and Manpower at the Launch of the SingTel Innovation Exchange (Six) on 14 July 2009, 9:00am, Suntec City Convention Centre

Mr Allen Lew, Chief Executive Officer (Singapore) of SingTel

Ladies and Gentlemen,

Good morning.

It is my pleasure to join you today at the launch of the SingTel Innovation Exchange, a joint initiative by SingTel and government agencies, Infocomm Development Authority of Singapore (IDA) and International Enterprise Singapore (IE Singapore).

The infocomm sector is a key contributor to the Singapore economy. Despite the current downturn, Singapore’s infocomm sector showed continued growth in 2008. Last year, revenue for the infocomm industry grew 12.4 per cent to $58.1 billion. Infocomm has greatly enhanced Singapore’s competitiveness by raising productivity and transforming business processes.

Building Capabilities for the Upturn

While we may not be able to predict accurately the end of current recession, we know for sure that recovery would ultimately arrive. After the downturn however, the world’s demand and supply equilibrium may have shifted, excess capacities cut, supply chain reconfigured, necessitating many firms to adjust, create new products and services, and serve new and previously-untapped markets. To survive, businesses must be agile and flexible, mean and lean. One way to achieve such sustainable competitive advantage is to fully exploit IT.

Therefore, to encourage Infocomm adoption among SMEs, the Government has introduced various initiatives under the Infocomm@SME program. One of such initiatives is the SME Infocomm Package (SIP) initiative which provides a one-stop service and packaged infocomm solutions to make it easier for SMEs to adopt infocomm in their business processes. The initiative was recently enhanced to help SMEs deal with the economic downturn[1].As of May 2009, more than 1,500 SMEs have benefited from SIP.

Meanwhile, for many of our ICT companies with exportable products and services, their desires to grow need not be constrained by the lack of overseas branding and business networks. They could leverage on larger companies and hunt in a pack.

To help local infocomm companies internationalize, IDA’s Overseas Development Programme[2] provides a platform for these companies to team up with leading infocomm major local enterprises or MNCs with established international presence. Since its inception, ODP has helped small local infocomm companies gain more than $123 million export revenue.

Global Trend of the Software-as-a-Service (SaaS) Market

In recent years, a trend that has swept across the global IT market is the emergence of SaaS, or Software-as-a-Service. In simple terms, SaaS providers offer a wide range of IT software that businesses can customize and subscribe to. Much like on-demand cable TV model, users of SaaS only need to pay for what they use. In this way, users of SaaS have access to the latest application software without the typical high upfront costs.

According to IDC, the global SaaS market is expected to hit US$10.7 billion this year, growing 42% from the previous year. Analysts expect that SaaS will account for over 20% of the US software market by 2010. In Asia, more than 50% of the US$500 million industry revenue comes from the Asian SaaS market[3].

As businesses and consumers enjoy greater access to the Web, we can expect cloud computing and SaaS to become mainstream infocomms services in the near future. Enterprises will be able to enjoy world-class applications and solutions on-demand while SMEs can now benefit from software that was previously accessible only to large companies.

With solutions fully hosted and managed, SMEs need not worry about technology and software obsolescence, system upgrades and the ongoing cost of manpower to manage complex ICT solutions. This phenomenon presents tremendous opportunities for innovative software companies in Singapore to reach out to customers across the world more rapidly and cheaply.

Benefits of a Partnership Approach

In today's competitive environment, Working in partnership makes a lot of sense. Smaller infocomm companies could increase their export reach by piggy-backing on larger companies’ market access. Conversely, larger companies can tap on smaller firms’ innovations and quick responses to meet end markets’ demands.

The soon-to-be launched SingTel Innovation Exchange is one such great platform for large and small ICT firms working in partnership for common good. It is also an example of private-public sector partnership: IE Singapore would identify and match promising Singapore-based software companies with potential partners and customers overseas using the Exchange; whereas IDA helps in the incubation of infocomm companies locally.

Conclusion

I am hopeful that this multi-party collaboration will boost local companies’ IT capabilities and help them internationalize in a cost effective manner. I would like to congratulate SingTel and its partners on the launch of the SingTel Innovation Exchange. By working together in the exchange, Singapore companies can hope to reinforce each other’s strengths for mutual benefits and for greater success in the regional and global markets.

Thank you.

[1] From April 2009, the subsidy cap for SMEs that wish to develop their first website is raised from $1,000 to $2,000 per SME. This will cover 80% of the costs for website development, monthly broadband subscription, hosting and maintenance for 12 months.
[2]launched in 2002
[3] Source: Gartner