SPEECH BY MR TEO SER LUCK, MINISTER OF STATE FOR TRADE AND INDUSTRY AT THE 360 PRODUCTIVITY SINGAPORE 2013 EVENT ON 2 AUGUST 2013, 9.00 AM AT THE REGENT HOTEL
Looking Overseas to Prosper at Home: The Internationalisation Imperative
Mdm Ho Geok Choo, Chief Executive Officer, HCS;
Dean Jamey Stowell, Assistant Dean, Executive Education, Georgetown University;
Mr Wong Fong Fui, Group CEO and Executive Chairman, Boustead Singapore;
Dr Jimmy Koh, Managing Director, Antara Koh;
Dr Paul Shew, Director of Business Development, Trek 2000 International Ltd;
Distinguished Guests;
1. Good morning. I am delighted to join you all today at the HCS Connections 2013.
2. Singapore’s economic strategy has always been to maintain an open economy; this includes the attracting talent and investments to Singapore as well as encouraging companies to venture beyond Singapore. As a small economy, this strategy enables us to stay globally competitive.
3. Despite the uncertainties in the global economy over the past two years, Singapore companies have continued to do well in their internationalisation efforts.
4. The majority of SMEs here have already entered overseas markets either through exports or investments. More than half (54 per cent) of all SMEs reported overseas revenue in 2012.[1]
Internationalisation Benefits Our Local Economy
5. Internationalisation is a necessity. Internationalisation is a crucial strategy for Singapore SMEs today. As 99.9 percent of consumers in the world live outside Singapore, businesses need to look beyond Singapore in order to grow and to maintain their competitiveness.
6. Internationalisation contributes revenue to the local economy, whether it is in overseas sales or investments. Overseas sales generate topline revenue for our companies. Overseas investments, although risky, generate profits and dividend income that accrue back to Singapore.
7. Internationalisation also contributes to the employment of local workforce. Singaporeans make up 72% of the overseas workforce for the average SME. As overseas investments tend to be integrated with local operations, employment within the Singapore headquarters will expand as well.
The Challenges of Internationalisation
8. The Government understands that SMEs face many challenges as they internationalise. A major challenge is whether SMEs have the right people with the experience and skills in their overseas operations. Other factors include a strong branding strategy, developing operating processes, cash flow, and building familiarity with the overseas environment.
9. In addition, some argue that the ease of doing business in Singapore works to the disadvantage of Singapore companies when they go overseas. They find the bureaucracy in some countries a great challenge. They step on cultural landmines because they do not know the person-to-person subtleties involved when they attempt to even start discussing business with a foreign counterpart. Singapore, in contrast, is an island of order compared to many places in the more complex world outside. Hence our SMEs have to adjust their expectations when they venture overseas.
10. While internationalisation is challenging, it is a rewarding approach. Singapore needs more SMEs to become high-growth globally competitive companies or GCCs. We need more companies like Creative Technology and Trek 2000; Creative is synonymous with audio in multimedia worldwide while Trek2000 has made obsolete the floppy disk because of its invention of the thumb drive.
The Government’s Support for Internationalisation Efforts
11. To address these concerns, government agencies offer a wide range of assistance aimed at supporting companies which are ready and able to internationalise. This assistance comes in the form of grants and financing schemes.
12. For example, IE Singapore recently established the Global Company Partnership (GCP) which supports companies in the areas of capability development, market access, manpower and access to financing. Through this programme, IE is taking a more comprehensive approach towards helping companies venture abroad. IE does so by helping firms formulate a thorough plan for overseas expansion, to identify gaps in the company’s capabilities, to plug those gaps and then devises ways to make the plan a reality. This customised approach provides more targeted support to companies ready to internationalise.
13. For companies new to internationalisation, they can also tap on the Market Readiness Assessment (MRA) scheme, to learn more about different markets and be equipped with the basic know-how of internationalisation.
Conclusion
14. I am honoured to be here today at this conference organised by HCS and e2i, and supported by Singapore Business Advisors and Consultants Council (SBACC), the Asia Competitiveness Institute of the Lee Kuan Yew School of Public Policy and Singapore Workforce Development Agency. The timing of this conference is opportune given the Government’s push for productivity. The Government is tracking the utilisation rate of schemes and we have set up SME Centres to guide businesses on the various schemes.
15. I appreciate HCS and e2i for spearheading the SME Network outreach, particularly through organising this 360 Productivity Singapore event. The Network is unique as it focuses mainly on Chinese-speaking SME bosses.
16. I wish to congratulate the many SME bosses who are attending classes at HCS to raise their people management capability. Let’s applaud them. They are completing the first Chinese-language WSQ HR diploma course.
17. I also congratulate HCS and SBACC for collaborating on capability development. Their MoU today will ensure that consultants are certified in domain areas such as people management. Consultants are also people managers and much of their work is in this domain. Thus, they should undergo continuing education to stay relevant and equipped with the needed skill sets.
18. I applaud the alliance formed by HCS, e2i, WDA, SBACC, and the Asia Competitiveness Institute of the Lee Kuan Yew School of Public Policy on outreach for 360 Productivity Singapore. The alliance is sealed by the MoU they sign today. As the saying goes, “Unity is Strength” and with these organisations joining hands together, they can reach out to more PMEs to promote the message that productivity can be improved through capability development, innovation and internationalisation.
19. Finally, I would like to reiterate the support that the Government is rendering to the business community. We will like to have more graduates join the SME sector, through the SME Talent Programme, which enables graduates to consider SMEs as their career choice. Through the programme, local talents can look forward to a sponsorship and allowance while studying and a sign-on bonus upon graduation. Earlier this week, we launched JTC’s Small Footprint Standard Factory, one way to help SMEs. This factory allows companies to operate on different floors instead of a single storey. This helps to reduce the land footprint of manufacturing SMEs and increase land productivity.
20. The Government will continue to review our policies to help more SMEs. Thank you.