SPEECH BY MR TEO SER LUCK, MINISTER OF STATE FOR TRADE AND INDUSTRY
AT THE SME CONVENTION 2013
“NEW ECONOMIC PARADIGM – ARE SMES HEADING IN THE RIGHT DIRECTION TOWARDS TRANSFORMATION?”
28 OCT 2013, 9.30AM, RESORTS WORLD SENTOSA CONVENTION CENTRE
Mr Lawrence Leow, Chairman, SME Committee
Distinguished Guests
Ladies and Gentlemen
Good morning.
Introduction
1. It gives me great pleasure to join all of you this morning at the SME Convention 2013. I would like to commend the Singapore Business Federation, and the SME Committee (SMEC) in particular, for organising this Convention. I am pleased to note that this year’s focus is not only to raise issues facing SMEs, but more importantly to discuss possible solutions to help SMEs cope with their challenges.
2. The most immediate of these challenges is that Singapore’s resource constraints have become sharper. Going forward, we need to manage growth of our workforce and use of our land carefully. In addition, the aspirations of our people have risen, making it important for our economy as a whole to move up the value chain to create the jobs that Singaporeans desire. With rising global and regional competition, it is even more important for us to pursue growth that is driven by productivity improvements and innovation, so that our SMEs are well placed to compete and thrive in the new global economy, and create good, quality jobs for Singaporeans.
Supporting our SMEs in restructuring their businesses
3. At Budget 2013, the Government introduced the Quality Growth Programme to help businesses upgrade, create better jobs and raise wages. A number of these measures had been surfaced by SMEC in their Budget 2013 recommendations to Government. I must commend SMEC for their effort – majority of their recommendations were adopted.
4. The Quality Growth Programme provides a three-year transition support package comprising the Wage Credit Scheme, Productivity and Innovation Credit (PIC) Bonus, and a Corporate Income Tax Rebate. We also enhanced incentives to support companies in their productivity improvement efforts. The Enterprise Development Centres (EDCs) were expanded into SME Centres which offer full advisory services to SMEs. Five additional satellite SME Centres have been set up at the Community Development Centres (CDCs). We are helping the smaller SMEs build up their capabilities by linking them with larger players. Today, we have about 10 SME Centres and we are looking to expand and have more satellite Centres. There are many schemes that have been rolled out this year, including those that help companies find new revenue streams internationally. Through the Market Readiness Programme implemented by IE Singapore, we have enhanced our support for our companies venturing overseas. To ensure our future competitiveness, we are building capabilities for new growth industries through initiatives such as Future of Manufacturing Plan.
5. How have our SMEs responded? A recent survey of 173 companies by SBF found that two-thirds of the companies surveyed were encouraged by the PIC Bonus to apply for the PIC, with smaller companies being more strongly incentivised to do so. Companies also felt that the corporate income tax rebate and PIC bonus have been effective in lowering business costs.
6. The feedback obtained through this survey is useful for the Government, as it will guide us in refining the policies and programmes we have rolled out. We appreciate the work done by the SMEC in gathering honest and candid responses from the business community. I am also encouraged by how SMEC has been engaging government agencies in dialogues so that we can work together to make these schemes more effective.
7. MTI set up the SME Workgroup last month, to bring together grassroots Advisors, government agencies and business leaders, including those from the SMEC, in a coordinated effort to co-create solutions to the issues and challenges facing our SMEs. We will work together to engage SMEs to better understand their concerns and seek feedback on government schemes. Ultimately, the goal is to enhance the relevance of government schemes to better support SMEs through restructuring.
Supporting our Young Business Leaders
8. Entrepreneurship is important as it serves as a renewal for the SME sector, therefore, new businesses have to be created. Start-up and young companies are nimble and can adapt quickly to changes in the business environment. As such, the government places emphasis on nurturing young businesses and young business leaders. These are the people who contribute to the vibrancy and dynamism of our local business sector, and will spearhead the development and growth of our companies on the global stage.
9. Hence, today, I am pleased to announce the launch of the Young Business Leaders Alliance, formed by six strategic partners, namely the Business Leaders Alumni Club (BLAC), the Singapore Business Federation (SBF), three Young Entrepreneur Networks (YENs) at the Singapore Chinese Chamber of Commerce and Industry (SCCCI), the Singapore Malay Chamber of Commerce and Industry (SMCCI), and the Singapore Indian Chamber of Commerce and Industry (SICCI), as well as 22- individual Young Business Leaders (YBLs). These partners have come together with the common goal of grooming promising young leaders and nurturing an entrepreneurial spirit in Singapore, The Alliance will organise networking events, mentorship programmes, capability development programmes and internationalisation opportunities to enhance the leadership and competitiveness of our young business leaders.
Transforming our economy towards quality growth
10. Let me conclude by reiterating the need to intensify our efforts to transform our economy towards quality growth that is driven by innovation and productivity. The Government recognises that such a change will take time, and will do what it can to help companies with the transition. Many SMEs understand the need to provide productivity, and have embarked on the restructuring journey. I would like to thank Mr Lawrence Leow, Chairman of the SMEC, its members, and members of all the sub-committees for your dedication and hard work in supporting our SMEs. I look forward to continued collaboration between the Government and the SMEC. Working together, we can build a sustainable SME sector that is dynamic and competitive so as to create a better life for all Singaporeans.
11. On this note, let me wish you a fruitful day ahead. Thank you.