1. A very good morning to all of you. 

2. Three months ago, we had our worst quarterly performance – our Q2 GDP was negative 13.2%. While grim, we were neither daunted nor defeated. It did not deter us from pressing on with the things that we need to do. 

3. We focused our attention on helping our businesses to pivot, survive and thrive in a COVID environment. We told ourselves that we are not going to wait for COVID-19 to pass. Instead, we will start now to prepare for a new environment, even if COVID-19 is here with us for a long time. 

4. Since then, our performance has improved slightly – still negative, but at minus 7%. The most recent data shows some signs of recovery for many of the sectors. But at the same time, there were also other sectors that are still unable to open and resume business. 

5. Throughout this period, I have emphasised repeatedly that we are not going back to a pre-COVID world, and that we have to start thinking about surviving and thriving in the COVID world.

a. This is not the Global Financial Crisis, where we can expect a quick rebound. 
b. Even if COVID passes by in a year or two; even if we can find a vaccine, produce them in sufficient quantities, distribute them, and vaccinate sufficient people, the world would still have moved on. 

6. Why do I say that? Take a look around us. Even before COVID, the world was already changing rapidly – and in some ways, COVID has only accelerated the changes. Let’s take a look at a few examples. 

a. Retail trade. Before COVID, people were already embracing e-commerce. Brick and mortar shops were struggling to survive. Many had to embrace an online and offline combination to survive. I am sure many of your businesses are the same. 
b. With COVID, circuit breaker and lockdowns, many more people have now come to appreciate the convenience of e-commerce. When I visited a logistics company yesterday, they were telling me that their volume of e-commerce business has grown, especially for the higher value add and time-sensitive products.

7. When I speak to many business executives like yourself, some of you are beginning to wonder whether you still need to travel as much even after COVID.

a. Yes, we will all still need to travel to build new relationships. But for existing relationships, we have now an added option if we can meet virtually over Zoom or other applications.
b. In fact, many business owners like yourself have come to appreciate that even without traveling in a single day, you can meet clients from Europe to China to the US, all without leaving Singapore or even your office.

8. Some of you have also told me that you are now reassessing whether you need so many foreign executives in your company. 

a. Some of you have come to realise that even if the person is not in Singapore, he can be working for you somewhere in Vietnam, India or Philippines. 
b. And the cost to you is a fraction of what they would otherwise cost you, if he or she came to Singapore. 

9. The supply chains have shifted – after COVID and during COVID. People are no longer talking about efficiency, “just in time” only; they are talking about resilience, the “just in case”. People are talking about a China Plus One strategy, or an India Plus One strategy.

10. All these together will have a significant and profound impact on our business environment – how we position ourselves in the world, how we make a living, and how we value add to the global value chain, so that our position in the global value chain is entrenched and not easily displaced by someone else who comes along with a cheaper price only.

11. So, these are the reasons why we are not going back to a pre-COVID world. 

12. Now, I am encouraged. When I shared this message two to three months ago, I did an informal poll with the business executives. I asked them how long it will take us to return to a pre-COVID world. I asked them to vote one year, two years, three years, five years, or never.

13. When I first started this informal poll with all the audiences that I met, the general answer was all over the place. About 20% of all the businessmen then said that we are never going back to the pre-COVID world. 

14. Today, when I do the same poll with the same business groups, the answer is 50%.

15. I told them – whether it is one year, two years, three years or four years, your answer is actually the same. You are just waiting for us to go back to the pre-COVID world. It is just a matter of time. 

16. That mindset is a very different mindset from those who answered “Never”. Because once you say never, the mindset is entirely different. They are not waiting anymore; we are not waiting anymore. 

17. Now in some sense, that is very encouraging. Reality is setting in and we are determined to prepare for the future. The Chinese say “破釜沉舟” (i.e. to burn one’s own way of retreat and be determined to fight to the end). There is no turning back. 

18. Now, how do we go forward? What's our strategy? Today, I will lay out what we will do as a Government to establish the right macro conditions for you to thrive. But I need your help. We need to work together. 

a. The Government can establish the macro environment, but we need business leaders to lead the transformation of your respective businesses. 
b. We can equip you with the resources, we can provide you with access to advice from the partners on board today. But ultimately, as Cheong Boon said, you and your leadership teams are the ones that will make it happen. 
c. It is not the general policies that will help us to transform. It is our policies together with your efforts that will help us to transform. 

19. COVID is not just a physical endurance test, it is a mental and psychological endurance test. And we will do the following things.

20. First, we will nurture our startup ecosystem. 

a. We want to make sure that we have the environment to allow new businesses to form, particularly those with opportunities to scale beyond Singapore. 
b. We want a new generation of startups that says that my ambition is at least the Southeast Asia market if not beyond. 
c. It could be in the consumer businesses, tech businesses, and so forth; it could even be in new emerging areas like urban solutions, environmental sustainability, food resilience. 

21. We have big dreams – that with COVID, with climate change, with the demand for quality products, we can have a new generation of enterprises that provide a new generation of solutions.

22. For example, look at what MAS is doing. MAS has a Green Finance Action Plan to develop green financial solutions and markets. This will give a boost to all companies that want to get into the sustainability industry, and there is a huge market for this in Asia. People are not just demanding products to meet basic needs. People want a certain quality assurance. People want to know that the products that they consume have been produced responsibly and sustainably.

23. Another area that we will be going after will be the agri-tech sector. COVID has shown us how important it is for us to have a secure supply of food and medical supplies. While we don't produce many of these things, people are seeing us as a trusted hub to either produce these things or to trade such things. Through COVID, we have attracted investments for people to produce and value add to food stuff and medical equipment in Singapore because they know that we are not just addressing the needs of the local market. 

24. While other people try to attract investment because of the size of their local market, we attract investments on the basis that we don't have a large local market. But we will have a forward-leaning posture to make sure that our products can sell to many other markets beyond us. And the theory is very simple: the regional market is always bigger than any local market. 

25. We will make sure that we have a series and network of Free Trade Agreements (FTAs) to allow producers and exporters to take advantage of Singapore's position as the most connected hub in Southeast Asia, to do business out of Singapore. This is why we will continue to strengthen our FTAs and create a new generation of Digital Economy Agreements (DEAs) for our companies, and companies who plant their investments here to operate out from Singapore. 

26. As we say, you don't just trade with Singapore, you don't just trade through Singapore. You trade on Singapore, and you trade from Singapore. You use us as a platform, as a springboard to the regional markets. 

27. And to this end, for the startup strategy, we will strengthen our efforts to attract a new generation of entrepreneurs and technopreneurs to work with fellow Singaporeans to create and grow the companies of the next generation. And that includes many of you here today.

28. But this is a tough business. Consistently, we have been ranked amongst the top 20 startup hubs in the Global Startup Ecosystem report. 

a. Out of the 13 unicorns in Southeast Asia, seven are based out of Singapore. 
b. But we should not rest on our laurels. 
c. In a typical Singaporean way, we ask: why are the other six not here yet? 

29. When 13 becomes 30, we will want to make sure that they are here, operating from here, creating many good opportunities for our businesses, including SMEs and also our workers. And I hope that some of you will be the ones bringing us from 13 to 30. 

30. The second strategy is that we will continue to attract globally significant multinational corporations (MNCs) to plant their operations here. This is not a new strategy. We have done that over many years. We do this for a few reasons, and our forefathers did this for a few reasons.

31. First, we know that we don't have all the latest technologies in Singapore. But we have the gumption to go out and attract the best to come here, so that we learn from them, we grow our own people, and in time to come, our people can lead these companies. 

32. This is how we have grown an entire generation of engineers for the semiconductor industry, how we have grown an entire generation of leaders for the petrochemical industry, and now the biomedical industry, and so forth. 

33. But the second reason is equally important. When the MNCs come, they will create an ecosystem for our SMEs to work with them. And many of our SMEs will grow with the MNCs. This will create new opportunities for SMEs and new opportunities for our workers. 

34. This has not changed, and this will not change. But something will change in this strategy. The next generation of globally significant MNCs that we want to attract here – we want them here not just because they add to our GDP and create good jobs only. Adding to our GDP and creating good jobs are invariant. But we need to be even more surgical. We want those MNCs that come here with niche capabilities that cannot be easily displaced. 

35. What do I mean by that? There are many MNCs in the world, many of them produce very interesting and exciting products. But do they have unique capabilities that cannot be easily displaced? 

36. Let me give you an example – semiconductors. We are one of the world's largest producers of semicons for the IC chips and so forth. That in itself has created many opportunities for the SMEs and our workers. 

37. The global semicon industry is a very competitive industry. People can be easily displaced; opportunities can easily go elsewhere based on technology and price. 

a. But in the semicon industry, what is even more important than producing IC chips is the ability to produce the machines that produce the IC chips. 
b. And for that, there are much fewer producers of machines for IC chips than producers for IC chips. 
c. Producers for machines for IC chips will be much harder to displace than producers for IC chips. 

38. And this is how we have to think about our strategy going forward. When we attract a company here, what niche capabilities will it provide to our ecosystem that cannot be so easily displaced? 

39. Let me give another example. Recently all of you have heard about the Hyundai electric vehicle plant. How many of you think that we are going to assemble electric vehicles because we produce the chassis or the tyres? Surely, every Singaporean will understand that that cannot be our competitive advantage. 

40. So, when Hyundai set up an electric vehicle plant and an Innovation Centre in Singapore, which part of the electric vehicle will be most valuable and hardest to displace with the greatest value add from Singapore's perspective? 

a. It is not the tyre or the chassis or the car cushion. 
b. It is the electronics component – the brain in the electric vehicle, or the autonomous vehicle in time to come. 
c. It is the command and control system that allows the vehicle to interact with the macro command and control systems the vehicle is around. 

41. This is what I mean by our second strategy. Yes, we will continue to attract MNCs here, but we are not satisfied just by attracting MNCs. We want MNCs - and SMEs for that matter - to be able to plant themselves in Singapore because they provide unique niche capabilities that cannot be easily displaced. This will provide greater resilience to our economic system.

42. Just as what we have seen in COVID, some companies have become much more valuable. They have done much more business and higher quality business, because they cannot be easily displaced. They have capabilities that cannot be easily displaced. And this is what we hope that you will aspire towards. You are not in the price competition game. You are in the quality game; you are in the niche capabilities game. For us, we cannot compete with many other bigger countries in terms of scale or by price . But we can certainly compete with others on the basis of the quality of our work, the standard of our product, and the niche capabilities that we bring to the global value chain that makes us hard to displace in the global value chain. 

43. The third strategy is why we are here today. And that is to make sure that our companies continue to transform and keep pace, if not stay ahead of the competition in a fast-evolving world. And that’s why I'm so happy to see all of you here today. 

44. In many countries, because of COVID, people will withdraw from their efforts to develop new products and new markets. Because cash flow is tight, because the market is uncertain. Many countries and many companies are playing defensive. How do I hang on to what I have? 

45. But your very presence here today tells us that you are different. You are not playing defensive only. We have a plan, we have a vision, and we have the drive to want to do something different, to position ourselves for new markets, new products and services, that we are not waiting for the COVID to pass us by before we start our plan.

46. Whoever starts today and starts earlier than our competitors will have a much better chance than our competitors in preparing for a post-COVID world or a prolonged-COVID world.

47. This is also the reason why in all the government budget measures, you will see us gradually rebalancing the expenditures. When COVID first started, our first order of business was to prevent large-scale business closures and large-scale unemployment. We said that as we flatten that inflection curve, we must also flatten the unemployment curve and flatten the business closure curve. But you gradually notice that we are pivoting after we have done that. We are going to spend more resources to help businesses pivot into new markets, new products and services, because that is where the new areas of growth will come from. 

48. This is why our promise to all of you and the SMEs out there is this: if you are determined to grow your business, to pivot to new areas, to innovate, to transform your business, we will find the resources to support you. It is not just about giving you grants and subsidies and to defend and preserve what you have. More importantly, we want to support you by giving you the opportunities to create new products and services, reach out to new markets, access new knowledge. 

49. This is why today I am so happy to see the universities partnering you; the group of mentors who have gone before you, coming back to work with you; to encourage you, guide you, and see how we can together create new opportunities for every one of you.

50. This was our vision when we first started the Scale-Up Singapore programme. We now have the third batch running already. They are much larger in terms of size. They have different level of ambitions. We have done three runs with them, and we have gotten good results. 

51. Because of the Scale-up Singapore programme, I asked Enterprise Singapore (ESG) to start something of a different scale for a different group of companies like yourself. And this is the genesis of the Enterprise Leadership for Transformation Programme that we have today.

52. As the Chinese saying goes, a journey of thousand miles begins with a single step. We will support you. We will give you the opportunities to work with some of these consultants to see how, together with your leadership teams, we can chart a new way forward for your company and new lines of businesses. Because ultimately, the giving of grants and subsidies can only help businesses to go so far. 

53. The real breakthrough will not come  just by taking the grants and subsidies. The real breakthrough in the businesses will come from your efforts – when you have new ideas about new markets, new products and services, new ways of producing your goods, new ways of distributing and selling your goods, and so forth. And this is why we hope that such programmes will catalyse more people to come onboard to this transformation journey. 

54. Our commitment to business transformation, our commitment to help Singapore businesses to transform is a never-ending quest. There will never be a point where we can ever tell ourselves that we have arrived. And this is why MTI, together with ESG, is committed to making sure that we run such programmes on an evergreen basis; and that every year, we will have new generations of companies coming through this programme, learning new things, creating new products, exploring new markets, and ultimately creating more opportunities for yourself and helping us to better take care of fellow Singaporean workers. We hope that you will be part of this journey. 

55. Let me now pull the few threads together. 

56. COVID will not defeat us. COVID has been said to be a crisis of a generation. But if we do the right things, COVID will also be the opportunity of our generation – the opportunity for us to pull apart from the competition. 

a. We will do this by making sure that we grow a new generation of new businesses, including startups in new areas from environmental solutions, agri tech, to many more. 
b. We will attract a new generation of MNCs that are here not just to value add to the GDP and the salaries of our people, but a new generation of MNCs that have niche capabilities and will not be easily displaced by COVID or other disruptions. And because of this new generation of MNCs, they will bring along and catalyse the growth of a new generation of SMEs. 
c. We will make sure that we continue to invest in the development of our businesses, for all of you to join the ranks of the future SMEs. Some of you have met me before, and you know what's my definition of SME – it is called Singapore MNCs Emerging. Never ever see yourself as an SME and forever SME; you are Singapore's MNC Emerging. 

57. Finally, a word of encouragement through the tough times. The Chinese have a saying: “时势造英雄还是英雄造时势” – which one do you think you belong to? The time creating the heroes, or the heroes creating the time? 

a. Even if you believe that time creates the heroes, fortune favours the ones that are prepared and hardworking. And we will have to do our homework to seize the opportunities. 
b. If you believe that heroes create the time, then let you be the one to create the new opportunities for yourself, your business, your workers, and ultimately, for Singapore. 

58. Thank you very much and I wish you all the very best.