SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY (TRADE) AT THE SINGAPORE PRODUCTIVITY AWARDS GALA DINNER 2015, 7.35PM, AT THE SHANGRI-LA HOTEL TOWER BALLROOM
Mr Lawrence Leow, Honorary Treasurer, Singapore Business Federation Council,
Distinguished Guests,
Ladies and Gentlemen,
Good evening.
1. It is my pleasure to join you at the Singapore Productivity Awards Gala Dinner.
Singapore Productivity Awards Celebrates Productivity Excellence
2. The Singapore Productivity Awards aims to recognise Singapore companies which have demonstrated and advocated productivity excellence. I am grateful for the work of Singapore Business Federation in championing a culture of productivity through these Awards. Tonight, we celebrate not merely the achievement of the winners but also the milestones that our wider economy and businesses have made.
Positioning Our Economy to Overcome Future Challenges
3. Since the National Productivity Council started its work in early 2010, we have made decent progress in productivity. We are on track to meet our target of 2-3% productivity growth. Labour Productivity, when measured by real value add (VA) per worker, grew 2.5% between 2009 to 2014. When measured by real VA per actual hour worked, an internationally used benchmark, productivity growth is at 2.9%.
4. However, there are several headwinds that we have to work against. First, global economic conditions remain sluggish, with growth in 2015 likely to be slower than in 2014. While we expect global growth to improve somewhat, the continued slowdown in China, the services driven growth in the US, as well as the trends of onshoring activities back into China and the US means that we can expect external demand to continue to be weak.
5. Second, we are also seeing rising competition – both from regional and global players. This is even as technology is threatening to disrupt traditional business models, requiring businesses to reinvent themselves to stay relevant. Finally, Singapore continues to face a tight labour market and land constraints.
6. Despite these challenges, we must continue to grow our economy, and help companies seize growth opportunities so as to create good jobs for Singaporeans. Raising productivity is therefore critical, as it allows us to maintain our competitive edge despite our constraints.
Productivity is Key to Continued Growth
7. To do so, we need to help our businesses and people transform so that they can perform at a higher level than before. There are four main levers that businesses can draw on to increase productivity.
8. The first lever is Innovation. Faced with manpower constraints, businesses could adopt manpower-lean business formats, develop and leverage disruptive technologies and upgrade their people’s skills. To raise the value reaped from every square metre of land, we could intensify the use of land and facilitate, for example, space sharing between businesses.
9. Collaboration is the second lever. Collaboration within the firm - meaning teamwork, is critical to developing ideas for productivity improvements. Collaboration between firms is just as important. To build an entrepreneurial, competitive economy, we will need to develop an entire ecosystem of firms with deep linkages and differentiated capabilities that would cooperate to invent new ways to maximise resources and unlock opportunities.
10. Thirdly, in light of technological changes in a dynamic economy, the nature of jobs is transforming. Therefore we must invest in our people so as to prepare them for the more varied and demanding skills required in the future economy. In the manufacturing sector, for example, tomorrow’s factories will be characterised by the mass adoption of robotics. Emerging technologies like additive manufacturing or 3D printing would yield new products and ways of producing goods. According to Fraunhofer Institute of Industrial engineering, there will be a blurring between the traditional roles of production workers and knowledge workers. The shopfloor worker will need to partner machines and systems, originate ideas, execute decisions and pre-empt the unexpected.
11. Many of you have heard of SkillsFuture, a national effort to provide opportunities for Singaporeans to advance their careers through skills, regardless of their qualifications or starting points. Skillsfuture will therefore help our people develop the skills required in a fast changing economy. The initiatives under SkillsFuture include work-study programmes for fresh polytechnic and Institute of Technical Education graduates, education and career guidance for students and mid-career working adults. I would like to thank and applaud the companies (some of whom are present at tonight’s dinner) who have dedicated themselves to the cause of Skillsfuture, through rolling out programmes to help every individual attain their career goals. I urge more companies to step forward to do the same.
12. Finally, as Singapore continues to be an outward oriented economy, we must continue to help companies internationalise and venture abroad. We have made much headway in developing linkages with the world in recent months. As many of you are aware, last month, we concluded the Trans-Pacific Partnership (TPP), a Free Trade Agreement among 12 countries. TPP would significantly reduce tariff and non-tariff barriers and promote greater investments, enabling enterprises to better penetrate these markets. To better tap on the opportunities presented by such partnerships, we must constantly re-position ourselves in view of trends and changes occurring in global markets.
Winners have Tapped on these Levers to Achieve Success
13. Tonight, we are happy to recognise companies that have achieved success through tapping on these levers. Let me illustrate this with the example of CWT, an integrated logistics and supply chain solutions provider that has championed innovation and investing in people. The company developed and operates TransHub, Singapore’s first multimodal container transportation hub that facilitates resource sharing and consolidate trucking operations among local hauliers, thereby raising container transportation operating efficiency. Transhub also maximised land space efficiency through its in-house developed vertical chassis parking system that allows at least nine container chassis to be vertically stacked and stored in an area normally occupied by one parked chassis. The company has also developed a career progression and development programme that has empowered staff at operational ranks to progress into leadership positions. Employees are also sponsored for relevant degree programmes where required. These initiatives have reinforced the company’s leadership position in the market. The same can be said of the other winners too.
14. In the uncertain global economic environment, our productivity efforts are imperative to growing our economy sustainably, and to positioning our businesses for greater profitability and competitiveness. Innovation, Collaboration, investment in our People and Internationalisation are the four levers that winning companies have tapped on to improve efficiency and seize opportunities. I hope that more businesses would follow suit.
15. Let me offer my heartiest congratulations to all award winners and I wish you continued success. Thank you.