Speech by Mr S. Iswaran Minister in Prime Minister’s Office and Second Minister for Home Affairs and Trade & Industry at the Opening of McKinsey Green Campus, Thursday 25 October 2012, 9.45am, Jurong Island
Mr Gordon Orr, McKinsey Chairman for Asia
Mr Oliver Tonby, McKinsey Managing Partner for Southeast Asia
Dr Paul Jones, Managing Director of Petrofac
Distinguished Guests
Ladies and Gentlemen
I am pleased to join you this morning at the opening of McKinsey’s Green Campus.
Consulting firms leverage on Singapore for Asian expansion
Earlier this week, we had the Singapore International Energy Week (SIEW) and in conjunction with that, we have an array of activities that have taken place. We also had sessions with our Energy International Advisory Panel (IAP) where they shared some of their perspectives. One key conclusion that emerged out of these sessions, which has great relevance for what we are doing here today, was the emphasis on capabilities and innovation as the way forward, and finding solutions to the many energy challenges that we face. That has a particular resonance in Singapore because we emphasise on the need for capability development in all vertical segments, not just in energy but also in other areas. We think innovation will underpin the way in which we move forward. This Campus, with its emphasis on innovation and in energy efficiency, is going to play an important role.
In tandem with the growth in Asia, we see an increasing number of companies locating their global or Asia Pacific headquarters, as well as their decision makers, to this region. And Singapore has emerged as a preferred destination, with more than 40 per cent of global companies’ Asia Pacific headquarters here according to a survey by the Frontier Strategy Group1, including the likes of Procter & Gamble, Unilever, Panasonic and Kulicke & Soffa. They have set up significant global or regional functions here, which in turn create the demand for professional services such as those in the area of consultancy.
Singapore recognises the importance of growing and developing a world class professional services sector, to support the growth of global businesses located here. I am pleased to note that McKinsey has also chosen to locate the McKinsey Innovation Campus (MIC) in Singapore. I note that McKinsey intends for the Innovation Campus to serve as a base for it to incubate first-of-a-kind innovations, develop new tools, methodologies and services to address Asia’s growing needs. This can be attributed to the confidence that McKinsey has in Singapore and is also a strong testament to Singapore’s attractiveness as a location to support consulting firms’ innovation activities.
Developing a vibrant energy industry in Singapore
I am also pleased to note that the Green Campus is McKinsey’s first Capability Centre in Asia focusing on energy efficiency. Given the exciting global developments in the energy sphere, the establishment of the Green Campus in Singapore is indeed timely.
Global energy demand is projected to grow by 28 per cent from 2009 to 20352, and energy market gyrations are exacerbated by the increased volatility and uncertainties in global energy markets and oil prices. There is also rising pressure for global action to reduce greenhouse gas emissions and to mitigate climate change. As a small country with a relatively large industrial footprint, Singapore is also studying how we can reduce our energy demand and carbon footprint as part of our sustainable economic growth. To this end, the Singapore Government has invested in various efforts to encourage more efficient energy use and to build up capabilities in energy management.
In this regard, Jurong Island is a good example of our focus. In our master planning for Jurong Island Version 2.0, government agencies collaborated with multiple partners – including McKinsey – to uncover energy efficiency opportunities, develop best practices in energy management, and explore innovative infrastructure planning. These are aimed at optimising energy use and lowering utility costs. Several system-level opportunities, such as harnessing cold energy from LNG and utilising waste heat for desalination, emerged as possible projects for us to pursue.
Aside from the hardware, we have also invested in upgrading our software to develop new industry capabilities in energy efficiency and management. An example is the Singapore Certified Energy Manager (SCEM) programme. It provides technical and managerial training for engineering professionals who wish to build their career as energy managers. And McKinsey’s Green Campus will add to this effort, by providing high quality training and experiential learning courses at the executive level. From these courses, company leaders will be equipped with the knowledge as well as the management expertise that are critical to bringing about energy efficiency transformations in their operations.
Developing and test-bedding innovative solutions for Asia and beyond
As evident from our energy efficiency collaborations with McKinsey on Jurong Island, we believe that public-private partnerships can pave the way to solving our national challenges. Through such collaborations, Singapore presents a compelling value proposition for consulting firms to centralise their knowledge and innovation teams here, in order for them to be able to tap on the potential demand for sophisticated solutions.
Beyond the strong demand from the Singapore public sector, consulting firms can also leverage off the growing demand from industry players to develop innovative energy efficiency solutions. As an example, I understand that Natsteel Holdings implemented its Total Operational Performance (TOP) program which saw its 1,000 employees receive over 15,000 man-hours of energy-related training. This program has also led to projects which allow NatSteel to reap an annual energy savings of over 140 million kWh3. Such projects are not unique, and companies such as McKinsey can tap on this growing demand from the industry, and grow their consulting businesses here.
Conclusion
To conclude, let me extend my congratulations to McKinsey on the establishment of your Innovation Campus and the inauguration of your Green Campus. I am confident that the Campus will not only benefit Singapore, but also catalyse innovative solutions for Asia and beyond.
Thank you.
1 Source: Frontier Strategy Group Survey, 2010
2 Source: World Energy Outlook 2011 Fact Sheet by International Energy Agency indicates Statistic for Southeast Asia as a growth market
3 Source: NEA News Release - More organisations and individuals commended for taking the lead to improve Energy Efficiency.