Mr Oliver Tonby, Managing Partner, McKinsey (Southeast Asia),

 

Distinguished Guests,

 

Members of the Industry,

 

Ladies and Gentlemen

Good morning.  I am pleased to join you this morning at McKinsey’s 8th Innovation Forum.  I have had the pleasure of witnessing at first hand the evolution of McKinsey’s commitment to bring innovation to Singapore – through the launch of its Green Campus in 2012, and the McKinsey Asia and Consumer Insights Centre in 2013.  Today, I am particularly delighted to also be announcing the launch of the McKinsey Productivity Sciences Centre. 

 

When McKinsey first opened its office here in 1998, it had only nine employees.  Today, McKinsey has over 200 in its team which provides a wide range of services from Singapore, from consulting services to the establishment of global innovation centres under the umbrella of the McKinsey Innovation Campus.  Many Singaporeans work at McKinsey as consultants, researchers and analysts.

 

The McKinsey practice is well-regarded for its emphasis on knowledge, analysis and innovation.  While tapping on opportunities in America and Europe, McKinsey as an organisation has also consistently recognised the growing importance of Asia as a source of growth and innovation.  One key outcome was the establishment in 2011 of the McKinsey Innovation Campus in Singapore, in partnership with the Singapore Economic Development Board.  This Campus allows McKinsey to develop Asia-specific R&D at scale, while enabling consulting talent to specialise in Asia, building breadth and depth in industry experience.  By centralising these efforts in Singapore, McKinsey is also able to reap the added benefits that stem from better cross-functional sharing, coordination and economies of scale.

 

Comprising six innovation centres at present, the Campus aims to address key growth themes, challenges and opportunities in the region.  It also aims to deliver ground-breaking knowledge to help companies in Singapore and across Asia address their challenges and gain market share in the region.

 

The Green Campus is one of the six innovation centres.  Situated on Jurong Island, this centre is an industrial scale hydrocarbon process plant that helps companies and other major energy users build their core operations capabilities, and improve energy efficiency of their operations by as much as 40 per cent.

 

Another innovation centre is the McKinsey Asian Consumer Insights Centre, which I was pleased to launch in 2013.  This centre focuses on identifying key market insights for companies looking to meet Asia’s rapidly-evolving consumer needs.  Armed with these nuanced insights into an increasingly heterogenous Asian market,  businesses keen to venture into the Asian market can develop and execute more effective and targeted strategies.

 

I am pleased that McKinsey is now augmenting its Innovation Campus with yet another innovation centre.  While McKinsey is no stranger to helping companies address productivity-related challenges, the McKinsey Productivity Sciences Centre (MPSC) is its first centralised hub for productivity worldwide.

 

As thought leaders in productivity, the MPSC has already started to make significant headway into research on specific productivity areas.  For example, the team has explored emerging productivity-related “game changers” in the region, such as the rebalancing of China’s economy, the economic integration of the 10 ASEAN Member States, and the application of disruptive technologies.  The team has also introduced a new methodology to help companies make optimal decisions on plant location.  

 

The advent of the MPSC is aligned with Singapore’s on-going efforts to enhance our companies’ productivity.  As an island-state with limited domestic resources, productivity is key to Singapore’s economic competitiveness and the sustainable growth of our industries.  Our Government agencies have therefore committed substantial resources to supporting all companies, big and small, in their efforts to enhance their productivity.

 

As an example, SPRING Singapore recently facilitated a project between the Singapore Refining Company, its resident contractors and its sub-contractors to eliminate the need for contractors to set up and dismantle their portable compressors on-site.  This project is estimated to save 5,200 man-hours, thus generating savings of approximately $270,000 per year.

 

With government support, another company, Li & Fung Logistics, has invested $119 million in a regional distribution centre in Singapore that will adopt state-of-the-art supply chain management and innovative handling technologies to provide best-in-class warehouse operations.  This is projected to reduce the reliance on low skilled labour from 70 per cent to 40 per cent.

 

While the Government is doing its part to facilitate the adoption of productivity innovations, companies’ investments of resources and time in research and innovation are critical to creating such innovations in the first place. I therefore urge companies to tap on Singapore’s thriving innovation ecosystem to develop and implement business transformation and productivity initiatives that are best-suited to your needs.  Our business consultancies and local research institutes provide a wide range of services to solve sophisticated productivity-related problem statements, and can help you develop and implement solutions for these problem that have been defined.

 

Many leading global corporations have already chosen to leverage on Singapore’s strong ecosystem to make sizeable investments in activities related to innovation and productivity.

 

For example, in March this year, P&G unveiled its S$250 million Singapore Innovation Centre (SgIC).  This is Singapore’s biggest private research facility, employing 500 engineers, researchers and support staff.  At the SgIC, P&G’s innovation process begins with gaining new consumer insights at the centre’s model consumer home, where scientists engage with consumers to discover unmet needs.  This centre is evidence of Singapore’s success in attracting companies to tap on our innovation ecosystem to customise products that meet the unique needs of Asian consumers.

 

Another example is Amgen, the world’s largest independent biotechnology company.  Amgen has invested USD$200 million in its first manufacturing facility here in Asia.  Amgen chose Singapore as its preferred location to innovate new manufacturing technologies aimed at improving production processes and increasing efficiency.  

 

The establishment of MPSC further enriches the innovation ecosystem in Singapore, and gives business leaders like you added choice when seeking innovative solutions to your productivity challenges.

As productivity is also supported by the exchange of innovative ideas and best practices, it is apt that the launch of the MPSC is taking place during McKinsey’s 8th Innovation Forum in Singapore, which serves as a platform to exchange ideas for businesses to improve productivity.  

 

On this note, I would like to conclude by thanking McKinsey for their continued commitment to Singapore.  I congratulate you on the launch of the McKinsey Productivity Sciences Centre. I would also like to wish everyone a productive and engaging discussion today. Thank you.