Speech by Mr S Iswaran, Minister, Prime Minister's Office & Second Minister for Home Affairs and Trade & Industry at the 18th Enterprise 50 Awards Presentation and Gala Dinner on 22 November 2012, 8pm, at Resorts World Convention Centre
Distinguished guests,
Ladies and gentlemen,
It gives me great pleasure to join you this evening for the Enterprise 50 Awards, to recognise Singapore’s local enterprises which have excelled and contributed to our economic competitiveness. I understand that this is the largest ever turnout for the E50 awards, with about 1,300 guests here tonight. It is testament to the importance we accord to the development and growth of entrepreneurs and enterprises as an integral part of our economy. In that regard, I would like to commend the Business Times, KPMG and OCBC bank for their steadfast commitment to organising and sponsoring the E50 awards to celebrate the achievements of our enterprises.
Managing Challenges
The operating environment for businesses has become more complex. Externally, the global economic climate remains uncertain, with possible downside risks from Europe, or from the US failing to avert the impact of the fiscal cliff. Closer to home, the possibility of a hard landing in China cannot be entirely discounted. Regional competition is also rising, at both the national as well as city-level. Alongside these challenges, we also see the scope for new opportunities fuelled by the general rise of Asian economies; the rapid urbanisation of Asian populations; and the increasing size and disposable incomes of the middle class in Asia.
Domestically, our businesses face challenges arising in particular from increasing manpower and land constraints. For example, the government has implemented a number of measures to moderate the growth of foreign manpower, and companies have expressed concern that this might limit their ability to grow.
We need to take a long term view of our economy and the labour market. The Government recognises that foreign workers are an important part of our economy as they can help to fill talent and skill gaps in our companies. However, it is not a sustainable economic or business model to continue taking in foreign workers at the same pace as the last decade. Therefore, we have to move to a new trajectory of growth, underpinned by innovation and productivity, and calibrate our manpower policies to allow for a judicious complement of foreign workers who can support our industry and social needs. Over the next few years, we will need to carefully manage this transition in our economy. In this process, the Government has and will continue to ensure that the direction of policy is clear, that companies have reasonable time to adapt, and continue to monitor the impact of the measures closely, with a range of programmes to support industries and enterprises as they restructure and re-engineer processes.
To thrive and succeed in such a challenging global and domestic operating environment, our enterprises will need to be adept and agile to seize opportunities. Companies must be willing and able to innovate, restructure and refine their business models. Indeed, that is the essence of entrepreneurship and our E50 winners are excellent examples of how success can be attained through innovation and productivity-driven growth.
Victor Enterprises is a four-time E50 winner. The company was set up in 1982 as a single petroleum product distributor but has grown to become one of the leading petroleum distributors in the region. The company has invested steadily in productivity improvements with support from SPRING Singapore. Some of these enhancements include a full Enterprise Resource Planning system, a transport management system with GPS technology, an integrated system for HR and finance, and most recently, a virtualisation project to realise the potential of cloud computing for better business continuity management. Sales personnel are also equipped with smart technology such as iPads to realise greater manpower efficiency. Over the past year, Victor Enterprises’ revenues increased by 26% and its labour productivity increased by 5%.
Restructuring is inevitable
Clearly, restructuring for sustainable growth and competitiveness is necessary and possible. But as most companies can testify, it is not easy.
However, the Government remains committed to helping local companies make the transition. A range of schemes is available to support productivity and capability development initiatives. In this year’s budget, we committed an additional $200 million over the next 3 years to increase the support levels for companies, under SPRING and IE Singapore’s capability development schemes. This will help local enterprises build up their capabilities in automation, technology adoption, innovation, service quality, branding and internationalisation.
Given the small size of the domestic market, our local enterprises also need to look beyond our borders to seize opportunities for growth, sometimes relatively early in their development. Many of our companies have recognised this. Last year, Direct Investment Abroad (DIA) by Singapore-based enterprises reached $31.7 billion, an increase of almost 10% from $28.9 billion in 2010. Despite the economic uncertainties, the G3 economies continue to represent our largest markets for high-value products and services. At the same time, there are opportunities in Asia, particularly China, as well as our neighbours in ASEAN. Our companies can and must take advantage of our comprehensive network of free trade agreements to facilitate their exports and expansion to these markets. Beyond the G3 and Asia, there are also growing opportunities in emerging markets in the Middle East, Latin America and Africa.
Businesses can tap on IE Singapore’s overseas centres and assistance schemes, such as the Global Company Partnership (GCP) scheme, for their growth and internationalisation plans. The GCP, introduced earlier this year, provides support for companies in 4 main areas:
a) First, companies are able to obtain assistance to build capabilities for overseas growth in areas such as branding,
design and Intellectual Property management;
b) Second, the scheme facilitates market access through support for start up costs as well as mergers and
acquisitions;
c) Third, companies have access to financing as they deepen their engagement overseas, especially in emerging
markets;
d) Finally, the scheme supports companies in helping them develop a global manpower strategy and attract talent
for overseas projects.
Falcon Incorporation is a good example of a company which has expanded overseas tapping on IE’s assistance. Falcon’s growth in the furniture industry has been propelled by its bold internationalisation plans. IE recommended Falcon’s partner in Qatar which has led to the expansion of Falcon’s factories there, and it has become one of the few Singapore companies with manufacturing capabilities in that region. IE also facilitated Falcon’s development overseas through business matching in markets such as USA, Europe, Sri Lanka and Myanmar. The company now employs more than 1,800 people and hopes to increase their turnover from $40 million to over $100 million in the next few years.
Importance of E50 Awards as a showcase and encouragement for businesses
Companies such as Victor Enterprises and Falcon are examples worthy of emulation by other local enterprises. The E50 Awards bear testimony to the innovative capacity, determination and resourcefulness of our local companies in seeking out opportunities for growth and expansion, notwithstanding external and domestic challenges. Since the inception of the awards 18 years ago, some 450 winners have been recognised for their excellence and entrepreneurial spirit, and they have gone on to carve out even more successful growth paths.
I warmly congratulate this year’s E50 award winners, and would like to encourage you to go even further, and aspire to be the next home-grown MNC. The E50 Award is not an end in itself, but rather a milestone and launchpad to seize new opportunities. As exemplars for the rest of the business community, I trust you will continue to set the benchmark which other companies can aim for. In doing so, you will play an important part in writing the next chapter of Singapore’s economic story, and contribute to our goal of achieving sustainable and inclusive growth for all Singaporeans.
My congratulations to all of the E50 winners once again, and I wish you all the best in the next phase of your growth and future endeavours. I wish you all a pleasant evening. Thank you.