Mr Chaly Mah, Chairman, Singapore International Chamber of Commerce,
Excellencies, Distinguished Guests,
Ladies and Gentlemen
Introduction
1. Good evening. I am delighted to join you this evening at the inaugural SICC Awards Dinner. It is an occasion for business leaders to come together and celebrate successful collaborations by companies in Singapore.
2. Let me first congratulate all the companies and organisations involved in the twelve projects that have been nominated for this year’s inaugural awards. Your stories will encourage, and strengthen the resolve of, many other companies similarly seeking to embark on partnerships.
3. I would also like to commend the Singapore International Chamber of Commerce (SICC) for taking the initiative to present this annual award. Initiatives like this award, as well as SICC’s strong support for the Partnerships for Capability Transformation (PACT) Programme, will go a long way towards fostering a strong culture of collaboration amongst our companies, which will be an important competitive advantage in the years to come.
Importance of Collaboration
4. It is the natural instinct of businesses to compete. Companies typically seek out strategies to differentiate themselves in the market, and acquire a sustained competitive edge over their business rivals. However, today’s businesses face an increasingly complex and dynamic operating environment. Markets are highly interconnected, technological changes are rapid, and consumer expectations are growing in sophistication. Consequently, companies are compelled to respond quickly to shifts in the market, constantly seek out new opportunities, and re-invent products and processes to keep pace with the changing needs of their customers. To go alone it is difficult, time-consuming and resource-intensive.
5. One efficient strategy to deal with this challenge is collaboration among companies, as well as between the public and private sectors. More and more companies, large and small, local and foreign, recognise that significant mutual benefits can be derived from working together and complementing one another’s knowledge and strengths. There are two forces which underpin the importance of collaboration as a business and economic strategy.
6. First, advancements in technology and business model innovations are changing, if not completely disrupting, the way that business is conducted. Emerging business models require companies to tap on the strengths of multiple sectors for success. For instance, a successful e-commerce business requires complementary capabilities in merchandising, advertising and branding, logistics, and IT. Many incumbent retailers do not have the full suite of such fulfilment capabilities needed for success in this space. Collaboration with complementary businesses, particularly logistics and IT, has been crucial for success.
7. The modern business environment is also characterised by rapid change and complexity. This makes it more difficult for any one company to keep up with all aspects of their industry or market trends. As a result, companies are adopting “Open Innovation” strategies to enhance their access to new ideas and capabilities. Procter & Gamble (P&G), one of today’s award nominees, is widely acknowledged as a pioneer in this regard. By actively seeking to connect with external partners under its “Connect Plus Develop” programme, P&G has been able to successfully harness the ideas and strengths of individuals and companies outside the organisation. This has allowed P&G to incorporate insights from a diverse group of external parties and draw from a larger pool of ideas, to produce better products while optimising R&D expenditure.
8. Second, Singapore’s corporate ecosystem is becoming more diverse, both in terms of the types of companies and the capabilities of different sectors. This creates greater opportunities for companies to work together and tap on complementary strengths. For instance, we are witnessing exciting developments in nascent sectors such as Medtech, Cleantech and Fintech. Smaller companies in these new areas are already working with the larger players in related and adjacent sectors.
9. Within many of our industry verticals, we have a diverse array of companies – from best-in-class MNCs who have set up their regional headquarters in Singapore, to well-established local companies, and young SMEs. Our logistics sector is a good example – we have 20 of the top 25 global logistics players here, with the likes of DHL, Sankyu and UPS basing their regional or global headquarters in Singapore. At the same time, we have a group of competitive local companies such as YCH and Yang Kee, who have built up strong capabilities, especially in the region, over the years. Very encouragingly, we are also seeing a number of start-ups entering this sector, bringing with them new ways of doing business and innovative technologies. Such diversity in our corporate ecosystem makes Singapore fertile ground for collaboration.
Strong Government support for collaboration
10. The Government is keen to ensure deeper collaboration within and across industries in the Singapore economy. Indeed, this is a key source of competitive advantage for us; and how we can strengthen it will be a key focal point for the Committee on the Future Economy. Over the years, the Government has sought to foster collaboration between companies in different ways.
11. We have strived to create a physical environment that is conducive for collaboration. In our planning of industrial districts, JTC has deliberately made efforts to cluster related industries together. Two good examples are Jurong Island and Seletar Aerospace Park, where chemical and aerospace activities are clustered respectively.
12. Such clustering brings about a number of benefits. For the downstream energy and petrochemicals industry, physical integration is a key factor for competitiveness. Jurong Island houses upstream and downstream companies close enough to build physical pipeline connections to each other, and aggregate common services, which can then be outsourced. These translate into a cost competitive advantage and sound value proposition for investments.
13. Seletar Aerospace Park, on the other hand, enables collaboration and business synergies by attracting a wide range of suppliers and MRO companies. For example, Hawker Pacific and Jet Aviation share their respective paint facility and interior completion facilities. Their physical proximity and the common tow way within the airport enable companies to tap on each other’s competencies, and avoid duplicative facilities and costs. In addition, JTC’s light industrial multi-tenanted space enables a quick start up for SME suppliers to plug into the ecosystem. Today, Seletar Aerospace Park is home to more than 60 companies comprising an even mix of MNCs and local SMEs, such as Rolls Royce, Pratt & Whitney, Wah Son Engineering and WingsOverAsia.
14. We also have programmes to specifically promote collaboration between companies. For many years, EDB’s Local Industry Upgrading Programme (LIUP) had successfully helped to upgrade the capabilities of our local suppliers who support the MNCs. LIUP was later subsumed under the PACT Programme in 2010. Apart from supplier upgrading, PACT also supports knowledge transfer among companies, and co-innovation by large organisations and SMEs. Since its establishment, more than 750 SMEs have benefited from the PACT programme, including a number of tonight’s award nominees.
Strong involvement from the business community
15. Ultimately, business collaboration must be driven and led by the business community, which best understands the risks and benefits. I am therefore pleased to note that our businesses and government are aligned in this regard. The Singapore Business Federation’s recent Business Position Paper, supported by Trade Associations and Chambers (TACs) including SICC, recommended that we encourage companies to collaborate and develop proprietary solutions and technology. This is precisely in line with the government’s objectives, and I am glad to note that a number of such projects have been supported by PACT.
16. The timely introduction of the “SICC Awards: Innovations in Productivity” is a tangible example of the business community’s commitment to promote collaboration. TACs understand the industry landscape, are well-acquainted with the capabilities of our companies, and are aware of the opportunities and challenges. Hence, our TACs have an important proactive role to play in facilitating collaboration and continuing to push the boundaries.
17. In the long run, a strong collaborative culture will be beneficial to Singapore’s industry, as our companies leverage on the strengths of one another to seek out business opportunities. Together, we will enhance productivity, be more competitive and be better prepared for the future.
Conclusion
18. Once again, let me congratulate all of tonight’s nominees for the inaugural SICC awards. You exemplify the culture of collaboration we seek to foster, and many of these projects mark just the beginning of deeper and longer term partnerships. I wish all of you continued success.
19. Thank you.
***