Mr Teo Chee Hean at the opening ceremony of the 22nd Family Business Network International Summit, 28 Oct 2011

SPEECH BY MR TEO CHEE HEAN, DEPUTY PRIME MINISTER AND MINISTER FOR HOME AFFAIRS, AT THE OPENING CEREMONY OF THE 22ND FAMILY BUSINESS NETWORK INTERNATIONAL SUMMIT, FRIDAY, 28 OCTOBER 2011, 8.50AM AT THE RITZ CARLTON MILLENIA

Mr Thierry Lombard, President, Family Business Network International,

Mr Frederick Chavalit Tsao, President, Family Business Network Asia,

Mr Sajen Aswani , Chair, 22nd Family Business Network International Summit,

Distinguished Guests,

Ladies and Gentlemen,

Introduction

Good morning. It is my pleasure to join you for the 22nd Family Business Network International Summit, which is being held in Southeast Asia for the first time. I understand that more than 700 delegates are here today, representing multiple generations from over 300 family-owned companies from some 50 countries around the world. Let me warmly welcome all of you, especially our guests from overseas who are visiting Singapore for the first time.

The importance of family businesses

Family businesses are important engines of growth in many countries. This is also the case in Asia. According to a recent study of ten Asian economies published by the Credit Suisse Emerging Market Research Institute , family businesses accounted for half of the listed companies and a third of total market capitalisation in these economies.

In terms of market performance, the same study found that family businesss outperformed their local benchmarks in seven of the ten Asian markets during 2000 to 2010, delivering compound annual growth rate of 13.7 per cent during this period. This is quite an achievement, considering the economic turmoil that we have seen in the past decade, including the bursting of the Internet bubble in 2002-2003 and the global financial crisis in 2008-2009. This demonstrates that strong leadership coupled with effective management, with a direct stake in the company, can often result in performance that is above the norm.

Today, I would like to touch on three points which I hope will be useful to participants at this summit, as you continue to grow your family businesses. First, seizing growth opportunities in a fast-growing Asia. Second, attracting talent to strengthen your business. And third, strengthening your social and community impact.

Seizing opportunities in a fast-growing Asia

Let me start with seizing opportunities in a fast-growing Asia. With storm clouds hovering over the euro-zone and the US, economic growth in many advanced economies has stalled, and may remain stagnant or low for some time. Asia has emerged as a key global engine of growth. With rapid urbanization and growing wealth in many countries in Asia, there is now rising domestic demand, presenting a new potential source of growth for family businesses to tap on.

Indeed, growth opportunities in Asia have spurred many companies to look for a home base in the region to deepen their understanding of the Asian consumer, and test-bed new products and services for the region. Family businesses can leverage Singapore’s location, to serve as an Asian gateway. We offer an open and business-friendly environment, good connectivity, sound infrastructure, and a cosmopolitan talent pool that is Asia-ready and globally attuned. Singapore can be a partner and an integral part of your strategy to take advantage of this shift in global opportunities, whether your company is a global one entering the Asian market, or an Asian company serving the world. You are only a good dinner, and a good night’s sleep away on your own business jet or favourite airline to the key business centres of the world, be it Sydney or Shanghai, Mumbai or Dubai, or Seoul, Tokyo, Paris, London, Frankfurt, Moscow, New York or Los Angeles.

Attracting Talent

Every organization is only as strong as its people. A key factor to growing a family business and enduring success is talent – attracting, developing and retaining talent from not just within, but also beyond the family, to provide complementary skills to support the company’s growth.

Singapore is an ideal location for companies seeking talent and partnerships. As part of the Economic Development Board’s “Home for Talent” strategy, we have been stepping up efforts to attract, develop and retain both foreign and local talent to work and live here. Mercer’s Worldwide Quality of Living Survey consistently ranks Singapore top in Asia.

We have also built up Singapore as an education hub to draw an interesting mix of students from all over the world. Besides our homegrown business schools in the National University of Singapore, the Nanyang Technological University and the Singapore Management University, Singapore is also home to the Chicago Booth Graduate School of Business, INSEAD, the S P Jain Center of Management, among others. These and other top institutions play a key role in developing talent, from which you can recruit good people.

As a Global-Asia hub, the 36,000 multinational companies and 17,000 Asian enterprises in Singapore form an enormous pool of companies from which your businesses can develop win-win partnerships to offer new products and services, or to access new markets.

This is complemented by the strong pool of service providers in Singapore, which are geared towards the regional and global markets. These include accounting and professional services firms like Deloitte and Ernst & Young, as well as top market research, marketing and strategy firms such as Nielsen, Ogilvy & Mather and McKinsey & Company. These firms can work closely with your companies to better understand emerging trends in Asia and craft effective strategies to serve your customers.

Strengthening Social Impact

Let me now move on to my third and final point. Successful family businesses have a tremendous potential to make a positive impact beyond the business world. Many such families have worked hard to achieve their success. They appreciate the opportunities that they have had, and are now ready to give back to society by creating opportunities for others. Through corporate social responsibility initiatives and corporate philanthropy, family businesses can contribute to the greater good of society.

Already, foundations set up by entrepreneurial families represent a huge share of philanthropic giving around the world. For example, in the United States, such foundations make up 13 of the 20 largest players .

In Asia, we are also seeing more family businesses doing their part for society. One example is the Murugappa Group, headquartered in Chennai, India. The business conglomerate has a wide range of business interests including engineering, abrasives, finance, general insurance, sugar and fertilizers. The Group, which had a turnover of US$3.8 billion in the last fiscal year, has invested one per cent of its after-tax profits for the welfare of society since it went into business. Today, its AMM Foundation focuses on community health and education. So far, the foundation has built and maintains four high schools with 8,000 students, a polytechnic institute of 1,000 students, four no-fee hospitals and a rural research centre to help the poor.

I am sure that many of your successful family businesses will continue to strengthen your social impact, and make a difference to the lives of others.

Conclusion

All successful businesses must have a long term vision, strong values and a capacity to innovate. At the same time, as they grow, family businesses have to induct and integrate new talent, and form new partnerships, to take full advantage of the new and challenging environment in an increasingly globalised economy. A summit such as this therefore plays an important role in strengthening the practice of family business by providing excellent learning opportunities and a platform for all participants to share ideas and experiences.

I wish all of you well, as you continue to lead your companies in seeking out growth opportunities, especially those in Asia, attracting the best talent and forming partnerships, as well as creating impact not just in the business world, but also in the community. I hope you have a productive summit, and a pleasant stay in Singapore.

Thank you.