SPEECH BY MR LEE YI SHYAN, MINISTER OF STATE FOR TRADE AND INDUSTRY AND MANPOWER AND MINISTER IN CHARGE OF ENTREPRENEURSHIP, AT THE LAUNCH OF SMU’S INSTITUTE OF INNOVATION AND ENTREPRENEURSHIP, 03 SEPTEMBER 2009, 3:30 PM AT SMU

Professor Howard Hunter, President of SMU,

Members of the SMU Enterprise Board,

Ladies and Gentlemen,

Good Afternoon.

First of all, let me thank President Hunter and all of you for inviting me to this significant occasion of the official launch of SMU’s Institute of Innovation & Entrepreneurship or IIE.I am heartened to see that SMU continues to make an impact in helping more people understand and apply entrepreneurship.

Working for someone or being your own boss?

Recently I came across a new term called “Neet” to describe certain group of young people. It refers to the new college graduates and school leavers who are “Not currently engaged in Employment, Education or Training”. According to a report, there are over 1 million Neets in the UK. Even in Taiwan, there are 185,000 of them. An article of a business magazine reads: “UK graduates face bleak job prospects in aftermath of credit bust”. Fortunately, the job market here is more sanguine. Even though we suffered a 6.5% negative growth in 1H2009, our unemployment rate remains low at 3.3%, compared to many advanced economies. There are still jobs out there for job-seekers.

To assume that the next phase of life for graduates after tertiary education is to work for someone, is itself a paradigm that is worth revisiting. While it may be true for many graduates, it does not have to be so for all. After all, in the flat and globalized world where markets are connected and time to markets become a critical advantage, there is always the possibility of one starting a new business, becoming one’s own boss and making it BIG. In fact, Singapore’s entrepreneurial environment today has become far more conducive than ever for starting new businesses, in conventional sectors as well as in high-tech ones..

Franchise as a model

In the current issue of The Edge Singapore, an article entitled “Young entrepreneurs bypass corporate rat race” gave interesting examples of how young people in the twenties were taking up franchises in starting up businesses in America. A 23-year-old by the name of Neil Ehrlich, teamed up with his father and started a car workshop for oil change service in Austin Texas. Another 26-year-old by the name of Greg Meyer took up a painting franchise in St Louis, Missouri and said:” I saw the franchise system filling in the missing pieces that would make me successful". Meyer has bi-weekly goal setting meetings with a regional manager who evaluates his progress and helps him identify market opportunities. “It is really like a coach relationship”, he says.

In Singapore, many retail outlets and chain offer franchise opportunities too. They are found in the convenience stores, mobile phone and IT products, DIY stores, eye-wear products, fashions, F&B outlets and more. Indeed, many entrepreneurs found starting up business through franchises advantageous. Not only does franchise model fosters entrepreneurial spirit and hone business acumen, it also establishes the parameters for what works and what doesn’t. In many instances, it is also a win-win model of growth for both the franchisors and franchisees. Take the example of 28 year old May Chan who is the Master Franchisee of Cold Rock Creamery. This is an Australian franchise providing customers with personalized combinations of ice-cream with a wide range of toppings mashed together. It took her and her partner a lot of hard work to prepare for her store's opening at Holland Road. In an interview with Shape magazine she said, “We were plugging 20 hours a day. Even when business began, we were working from 10am to midnight everyday. It was all worth it because I have learnt so much."

Creating a conducive environment

There are clearly other ways to start new businesses besides franchising. In the high-tech sector, our focus has been to create an environment conducive for start-ups.

First, at the national level, Singapore emphasizes and invests in R&D. Our R&D strategy can be traced back all the way to the 80s. More recently, the Government introduced the National Framework for Innovation and Enterprise, which seeks to build on the strong R&D foundation established through earlier investments. One of the initiatives is the $22-million University Innovation Fund announced by the National Research Foundation, to further support academic entrepreneurship efforts in our local universities. I am pleased to note that SMU has become a beneficiary of this fund, receiving $6.5 million to drive entrepreneurial education and create high-tech start-ups within your campus.

Secondly, the government through SPRING has introduced a number of funding programmes to encourage start-up ventures. Let me highlight a few. SPRING‘s SEEDS and Business Angel Scheme (BAS) have invested $50 million in 170 companies. 38 start-ups have benefitted from the $15-million grant under the Technology Enterprise Commercialization Scheme which help them develop and trial test prototypes the conceptualization.

To encourage entrepreneurship on campus, SPRING has introduced the Young Entrepreneurs for Start-ups (YES) to give youths a grant of $50,000 to start their new businesses. . To date, 26 young companies have been supported with a grant of $1.3m. Schools wanting to introduce and teach entrepreneurship-related subjects could also apply to SPRING for up to $100,000 funding support, under the Young Entrepreneurs Scheme for School. 25 schools have been supported under this programme, reaching out to more than 6,000 students.

Thirdly, the government encourages the establishment of incubators as focal point of assistance to start-ups. Incubators, especially those in the universities, are uniquely positioned to link up the academic and scientific research communities, with the business world. As a bridge, university incubators can multiply the value of its research work and entrepreneurship studies through real-world applications. Today, about 300 innovative start-ups incubating under SPRING’s 7 incubators and venture accelerators have benefitted from more than $13.6m under the Incubator Development Programme (IDP). Through the IDP, innovative startups will gain access to markets, manpower, money and technical know-how more easily.

In this regard, I would like to congratulate SMU’s on its commitment in bringing entrepreneurship studies and practices to the next level. In particular, the new IIE’s desire to work with anyone with an innovative proposal to build high quality and robust start-ups, is very commendable. I am sure IIE’s efforts will significantly contribute to the understanding and practices of entrepreneurship in Singapore.

Conclusion

Our next phase of economic development will have to be driven by knowledge and innovation. To create wealth and jobs, we would need entrepreneurs with passionate dreams, innovative ideas, sharp business acumen and grounded realism. We need people like you who would turn unimagined ideas into products and services the market yet know.

On this note, it is my pleasure to declare the Institute of Innovation and Entrepreneurship officially open. Thank you.