Speech by Mr Sam Tan, Parlimentary secretary, ministry of trade AND industry & MINISTRY OF INFORMATION, COMMUNICATIONS AND THE ARTS, at the 2nd EDC Conference, Concorde Hotel, 9th March 2010, 9:15 am
Mr Renny Yeo, President of the Singapore Manufacturers’ Federation and Chairman of the 2010 EDC Conference Organizing Committee
Distinguished Guests
Ladies and Gentlemen
Good Morning
I am happy to join you today at the second Enterprise Development Centre or, EDC Conference.
A Challenging 2009 for
Enterprises
2. Last year was a very challenging year for many enterprises. The world went through a serious financial crisis that triggered a severe global economic downturn. Our government responded very swiftly with a $20.5 billion Resilience Package in last year’s budget. There were many innovative measures in that budget like job credit and Special Risk Sharing Initiative (SRI) scheme and so on, which had provided businesses with more support. For those companies who want to go overseas, they also provided with adequate support to venture abroad.
3. We are now seeing encouraging signs of a recovery. With considerable improvement in the external economic environment, we now expect the economy to grow between 4.5 to 6.5 per cent.
Looking ahead – New Strategic Direction
4. And while the next five to 10 years will present numerous challenges for Singapore as we continue on the path to recovery, there will also be opportunities for growth, especially with an emerging Asia. The government recently announced that this year’s Budget will focus on building up the capabilities needed to capitalise on these opportunities and transform our economy over the next decade.A number of programmes and initiatives have been announced to help our companies grow into globally competitive companies. A key target group to benefit from these business initiatives is the SME sector. SMEs[1] as we know constitute 99 percent of all enterprises in Singapore. SMEs employ 6 in 10 workers[2] and contribute about half of Singapore’s GDP. It is an important and crucial group. They are an integral part of plans to bring our economy to a higher level.
5. It has also been heartening to hear that even with last year’s less than conducive economic conditions, many SMEs continued to venture abroad and do business. 69 percent of our SME community has done so successfully, a rise from 65 percent in the previous year. These companies realise that in order to grow, they need to internationalise and tap larger markets outside Singapore. I hope many more SMEs will take advantage of the new budget initiatives to further expand their internationalisation efforts.And I encourage those who have yet to venture overseas to seriously consider doing so.
Partnership between Government and TACs
6. Apart from these budget initiatives, there is also strong support provided by our business associations to help companies ready to train their sights abroad.The government in fact recognises the key role that our trade associations and chambers of commerce play in helping our companies internationalise. As announced at this year’s budget the government is committing $100 million over five years to scale up our support for business associations to drive productivity at the industry level, and also to facilitate international market access for their members.
7. This additional support underscores the importance of the close working relationship between the Government and the trade associations and chambers or TACs. Together, we help facilitate the development of SMEs through programmes like the Local Enterprise and Association Development (or LEAD) Programme which is jointly managed by SPRING and IE Singapore. It aims to enhance industry and enterprise competitiveness. LEAD provides focused and customised support at the industry level. It does so through partnerships with industry associations that are willing to take the lead in industry development and drive initiatives to improve the overall capabilities of SMEs in their industries. Much progress has been made since the programme was launched in 2005.Some $47 million has been committed to support projects by 22 TACs.These projects will help some 8,000 SMEs upgrade and access new markets opportunities; and create some $1.4 billion in value-added and $3.1 billion in revenue for the participating companies. So you can see that there is a lot of potential that SMEs can leverage on.
Enterprise Development Centres (EDCs)
8. EnterpriseOne is another key initiative where the government has worked closely with TACs. Besides maintaining a web portal hosting comprehensive government information and e-services for businesses, there is also a network of five Enterprise Development Centres (or EDCs) set up jointly by SPRING and the various associations. These EDCs serve as a conduit for SMEs within the enterprise eco-system, allowing them to seek information and advice on government assistance for businesses and on tackling business issues.Let me cite two examples of how these EDCs have assisted SMEs.
9. ROHAG Singapore Pte Ltd, a manufacturer of components and parts for the oil and gas industry, approached the EDC@Singapore Manufacturers’ Federation (SMa) in 2008 for help in developing a strategic performance improvement plan. The EDC helped ROHAG to leverage on one of SPRING’s programmes to develop a roadmap for building their capabilities in key business areas. In turn, this has enabled ROHAG to address its business gaps and improve management performance.
10. In the second case, a company called Sri Vinayaka Exports, a trading company, saw the potential to expand into the retail business. Its founder and CEO, Mr J Manickavachagam., had initially approached the EDC@Singapore Indian Chamber of Commerce and Industry (SICCI) to seek help on its packaging design. However, on the advice of the EDC, he decided the company should also develop a brand strategy to strengthen its foray into retail. The company is now more confident of entering the retail market and its designed products will hit the shelves in early April this year.
11. To-date, over 36,000 SMEs have been assisted through the EDCs.Their extensive links with the SMEs proved invaluable when they helped reach out to more than 16,000 SMEs to disseminate key information and advice on the various government measures available for businesses last year.The EDCs also initiated the Financial Facilitator Programme in January 2009 to help SMEs that had been harder hit financially gain access to loans and alternative financing during the credit crunch. They handled more than 3,400 enquiries from distressed SMEs and managed to secure $46 million of bank loans for this group of companies.
Conclusion
12. The next few years will be critical for Singapore as we set out to build deeper capabilities and expertise to bring about a sustained growth.More than ever, TACs will have a key role to play in the development of our enterprises and industries.Given the unique position of the EDCs, I encourage them to aim for providing an even wider suite of services to our SMEs in Singapore. For example, in the areas of market access facilitation, credit and legal advisory and mentorship. In so doing, the SME community will be better served in terms of their business needs.
13. I would like to conclude by thanking all the five EDCs for organising this conference. I wish you all fruitful discussions and success in networking with like-minded companies.
Thank you.
2. Last year was a very challenging year for many enterprises. The world went through a serious financial crisis that triggered a severe global economic downturn. Our government responded very swiftly with a $20.5 billion Resilience Package in last year’s budget. There were many innovative measures in that budget like job credit and Special Risk Sharing Initiative (SRI) scheme and so on, which had provided businesses with more support. For those companies who want to go overseas, they also provided with adequate support to venture abroad.
3. We are now seeing encouraging signs of a recovery. With considerable improvement in the external economic environment, we now expect the economy to grow between 4.5 to 6.5 per cent.
Looking ahead – New Strategic Direction
4. And while the next five to 10 years will present numerous challenges for Singapore as we continue on the path to recovery, there will also be opportunities for growth, especially with an emerging Asia. The government recently announced that this year’s Budget will focus on building up the capabilities needed to capitalise on these opportunities and transform our economy over the next decade.A number of programmes and initiatives have been announced to help our companies grow into globally competitive companies. A key target group to benefit from these business initiatives is the SME sector. SMEs[1] as we know constitute 99 percent of all enterprises in Singapore. SMEs employ 6 in 10 workers[2] and contribute about half of Singapore’s GDP. It is an important and crucial group. They are an integral part of plans to bring our economy to a higher level.
5. It has also been heartening to hear that even with last year’s less than conducive economic conditions, many SMEs continued to venture abroad and do business. 69 percent of our SME community has done so successfully, a rise from 65 percent in the previous year. These companies realise that in order to grow, they need to internationalise and tap larger markets outside Singapore. I hope many more SMEs will take advantage of the new budget initiatives to further expand their internationalisation efforts.And I encourage those who have yet to venture overseas to seriously consider doing so.
Partnership between Government and TACs
6. Apart from these budget initiatives, there is also strong support provided by our business associations to help companies ready to train their sights abroad.The government in fact recognises the key role that our trade associations and chambers of commerce play in helping our companies internationalise. As announced at this year’s budget the government is committing $100 million over five years to scale up our support for business associations to drive productivity at the industry level, and also to facilitate international market access for their members.
7. This additional support underscores the importance of the close working relationship between the Government and the trade associations and chambers or TACs. Together, we help facilitate the development of SMEs through programmes like the Local Enterprise and Association Development (or LEAD) Programme which is jointly managed by SPRING and IE Singapore. It aims to enhance industry and enterprise competitiveness. LEAD provides focused and customised support at the industry level. It does so through partnerships with industry associations that are willing to take the lead in industry development and drive initiatives to improve the overall capabilities of SMEs in their industries. Much progress has been made since the programme was launched in 2005.Some $47 million has been committed to support projects by 22 TACs.These projects will help some 8,000 SMEs upgrade and access new markets opportunities; and create some $1.4 billion in value-added and $3.1 billion in revenue for the participating companies. So you can see that there is a lot of potential that SMEs can leverage on.
Enterprise Development Centres (EDCs)
8. EnterpriseOne is another key initiative where the government has worked closely with TACs. Besides maintaining a web portal hosting comprehensive government information and e-services for businesses, there is also a network of five Enterprise Development Centres (or EDCs) set up jointly by SPRING and the various associations. These EDCs serve as a conduit for SMEs within the enterprise eco-system, allowing them to seek information and advice on government assistance for businesses and on tackling business issues.Let me cite two examples of how these EDCs have assisted SMEs.
9. ROHAG Singapore Pte Ltd, a manufacturer of components and parts for the oil and gas industry, approached the EDC@Singapore Manufacturers’ Federation (SMa) in 2008 for help in developing a strategic performance improvement plan. The EDC helped ROHAG to leverage on one of SPRING’s programmes to develop a roadmap for building their capabilities in key business areas. In turn, this has enabled ROHAG to address its business gaps and improve management performance.
10. In the second case, a company called Sri Vinayaka Exports, a trading company, saw the potential to expand into the retail business. Its founder and CEO, Mr J Manickavachagam., had initially approached the EDC@Singapore Indian Chamber of Commerce and Industry (SICCI) to seek help on its packaging design. However, on the advice of the EDC, he decided the company should also develop a brand strategy to strengthen its foray into retail. The company is now more confident of entering the retail market and its designed products will hit the shelves in early April this year.
11. To-date, over 36,000 SMEs have been assisted through the EDCs.Their extensive links with the SMEs proved invaluable when they helped reach out to more than 16,000 SMEs to disseminate key information and advice on the various government measures available for businesses last year.The EDCs also initiated the Financial Facilitator Programme in January 2009 to help SMEs that had been harder hit financially gain access to loans and alternative financing during the credit crunch. They handled more than 3,400 enquiries from distressed SMEs and managed to secure $46 million of bank loans for this group of companies.
Conclusion
12. The next few years will be critical for Singapore as we set out to build deeper capabilities and expertise to bring about a sustained growth.More than ever, TACs will have a key role to play in the development of our enterprises and industries.Given the unique position of the EDCs, I encourage them to aim for providing an even wider suite of services to our SMEs in Singapore. For example, in the areas of market access facilitation, credit and legal advisory and mentorship. In so doing, the SME community will be better served in terms of their business needs.
13. I would like to conclude by thanking all the five EDCs for organising this conference. I wish you all fruitful discussions and success in networking with like-minded companies.
Thank you.
[1]SMEs in the manufacturing sector are defined as enterprises with net fixed assets < $15mil. For non-manufacturing sectors, SMEs are defined as enterprises with employment size < 200 workers.
[2] 1.6 million workers