“Seizing Opportunities, Energising Enterprises”

Mr Chairman,

1. We are now in the third year of the COVID-19 pandemic.

Introduction 

2. Our enterprises and our workers have shown tremendous resilience, particularly our frontline and healthcare workers, amidst a challenging and constantly evolving environment.

3. Our strong economic fundamentals, such as our excellent infrastructure, our vibrant innovation ecosystem, our extensive connectivity to the region and the world, and our trusted and robust regulatory environment, also provided us the ballast to ride out the storm. Together, we achieved a strong recovery last year.

a. We rebounded from the worst recession since independence, growing by 7.6% in 2021. In particular, the manufacturing, information and communications, finance & insurance, and wholesale trade sectors recorded strong growth. 

b. We also remained attractive to global investors, securing commitments of $11.8 billion in Fixed Asset Investment, and $5.2 billion in Total Business Expenditure in 2021. These projects are expected to create more than 17,300 jobs, and close to $17 billion in value-added per annum.

c. Labour market conditions have also improved considerably. Median real income grew by 0.9% after accounting for inflation, and our resident unemployment rate has come down to 3.2%, which is close to pre-COVID levels.

4. The Government has leaned forward to provide generous support to help enterprises through the past two years. We recognise that the recovery has been uneven across sectors, and we will continue to extend assistance in a targeted manner.

a. The Minister for Finance Mr Lawrence Wong announced that we will be supporting firms in sectors which have been most affected by COVID-19 restrictions, through a Small Business Recovery Grant of $1,000 per local employee, up to $10,000 per firm.

b. He also announced an extension of various loan schemes administered by Enterprise Singapore, to facilitate access to financing for Small and Medium Enterprises, or SMEs.

c. We will also do more to give the tourism industry a further lift, as we prepare for international travel to return eventually.

d. Minister of State Low Yen Ling will provide more details in her speech.

5. I am heartened that many of our enterprises do not want to just sit on their hands and wait for the pandemic to pass. Instead, they want to make full use of this time-out period, to uplift themselves and their workers, so that they are ready to sprint ahead when the pandemic subsides.

a. Last year alone, Enterprise Singapore supported over 22,000 enterprises in their transformation efforts, an increase of 44% compared to the year before.

6. Transformation will become even more important in the years ahead. Ms Mariam Jaafar and Mr Edward Chia asked about the economic headwinds we may face in the coming years, and what we are doing to enhance Singapore’s competitiveness.

7. There are several major challenges.

a. Our external environment is increasingly volatile and uncertain. Pandemics and extreme weather conditions are becoming more common. Technology and business cycles are shortening, and changes in international economic regulations such as the impending BEPS 2.0 will affect how we attract and anchor investments here. Geopolitical shifts, big-power contestation, and rising protectionism are also underway. The ongoing crisis in Ukraine is yet another reminder that peace and security, the foundation for economic growth, cannot be taken for granted.

b. As a small and open economy, we cannot insulate ourselves from these external factors. We will need to muster the agility and fortitude to adapt and stay ahead. As Ms Mariam Jaafar said in her speech, we must work hard to secure our position as a stable and trusted global business hub, which includes steadily reopening our borders, committing to a strategy of COVID-19 resilience, and welcoming investments, ideas and people from all over the world.

c. We also face challenges at home. I know many are concerned about how doing business is getting more expensive and costly, as Mr Liang Eng Hwa pointed out. The Minister for Finance in his Round Up Speech explained what the Government is doing to support businesses, and assured the House that we will continue to monitor the situation closely and step up our support if necessary. 

Singapore Economy 2030

8. While there are headwinds, there are also many exciting developments in key sectors across our economy. To position ourselves for growth and seize these opportunities, we must continue to invest in our fundamentals, and build up strong capabilities in our enterprises and our people. 

9. We have already started on this important work. The Future Economy Council is refreshing all 23 Industry Transformation Maps, or ITMs, to refine our transformation strategy up to 2025. Mr Sharael Taha, Ms Jessica Tan and Mr Pritam Singh asked about the progress of the ITMs. We are currently working closely with industry stakeholders, unions, and academia to update our ITMs, to address emerging trends and opportunities. These include digitalisation, resilience, and as Mr Taha suggested, sustainability. Jobs and skills, including the upskilling of workers, is also a key thrust of ITM 2025. 

10. Let me use the Precision Engineering ITM as an example. The Precision Engineering ITM aimed to add 3,000 PMET job numbers from 2015 to 2020. The sector is doing well; as of 2019, the number of PMET jobs in the sector has already increased by about 4,000. The ongoing ITM refresh seeks to enable the sector to capitalise on digital manufacturing and create good jobs in growth areas such as additive manufacturing and robotics. The other ITM 2025 reviews are also in progress, and will take into account the outcomes achieved from the earlier round of ITMs. More details will be shared when ready.

11. Ms Jessica Tan asked about growth and opportunities in emerging sectors. For the longer-term, we need a collective vision for the economy – the Singapore Economy 2030 vision – which will outline our ambition, provide direction, and coordinate actions across the key pillars of our economy. Together, these efforts will put our industries, enterprises, and workers on a firmer footing for long-term, sustainable growth. 

12. Let me share our vision for the four key pillars of the Singapore Economy 2030, namely services, manufacturing, trade, and enterprises.

Developing New Engines of Growth in Services

13. Let me start with the services sector, which Mr Don Wee talked about. Singapore has a large and diversified services sector. It represents more than 70% of our economy, comprising industries such as finance & insurance, information and communications, professional services, and logistics.

14. The bulk of our services sector is export-oriented and has shown remarkable resilience through the pandemic. Looking ahead, there are two major waves of opportunities – sustainability and digitalisation. I will speak more on sustainability and our Green Economy Strategy as part of the Joint Segment on the Singapore Green Plan next week.  

15. Digitalisation is a secular trend which will disrupt all our industries. Technologies such as blockchain, artificial intelligence and machine learning, as well as augmented and virtual reality, have the potential to fundamentally transform how we interact with the world around us. 

16. As more companies accelerate investments in digitalisation, there will also be increased demand for services such as consultancy and marketing. For example, as businesses move online, companies will need the expertise of marketing services firms to create more personalised advertising campaigns with the use of data analytics and marketing technology, or “martech” tools, and to engage customers through immersive user experiences such as gamification, and augmented and virtual reality. Firms will also need to build new capabilities through collaborating with partners from other industries to co-create multidisciplinary solutions, including in areas such as logistics.

17. I am glad to see many homegrown companies leveraging global opportunities afforded by the digital economy.

a. Many of you would have heard of Nium, a Singapore-based FinTech unicorn that builds white label cross-border payment solutions. Today, its software is getting money to people and businesses in over 190 markets.

b. Another example is AP Media, a Singapore marketing firm that specialises in interactive and video content production. At the height of the pandemic, AP Media developed a livestreaming and virtual conference tool which was used for Singapore’s first virtual fashion show called The Front Row. The online portal houses a 3D arena, which visitors can virtually navigate runway shows, panels, workshops and podcasts. AP Media’s creative technology has since been deployed in several international projects, notably Louis Vuitton’s fashion show and Razer’s Global Virtual Conference.

c. Mr Edward Chia spoke about consumer-facing businesses. Digitalisation can also be a powerful transformation tool to help consumer-facing businesses improve productivity and engage new customers. Sephora is a good example. Singapore houses Sephora’s Digital Centre of Excellence with in-house capabilities including in areas such as marketing, creative and design and data analysis. One of the solutions it created in-house here in Singapore is the Virtual Artist Kiosk, which relies on augmented reality to reflect various lipstick colors on their consumers, through a digital screen. Real time analytics such as user engagement and the popularity of products, are then channeled back to Sephora’s platform.

18. Second Minister Tan See Leng will speak more about what we are doing to help firms seize opportunities in digitalisation.

Manufacturing 2030

19. Even as we invest in our services ecosystem, we will continue to build up a strong manufacturing sector. Thanks to our continued investments over the years, we have a thriving and competitive manufacturing ecosystem which exports products all over the world. For example, we account for 11% of the global semiconductor market, and 20% of global semiconductor equipment is manufactured in Singapore. We are also a major player in the biomedical industry, and pharmaceutical companies have been producing lifesaving drugs from Singapore to supply to global markets.

20. Mr Baey Yam Keng asked for an update on our Manufacturing 2030 vision, and the opportunities in this sector. We launched Manufacturing 2030 last year, with the aim of increasing manufacturing value-add by 50% in 10 years. We have already made good progress. Last year, the sector grew very significantly by 13.2%, and received $8.5 billion in total Fixed Asset Investment, creating over 6,000 jobs when these projects are completed.

21. Let me share with you a few examples where we are leveraging technology for manufacturing, in particular advanced manufacturing, to allow us to produce goods higher up in the manufacturing value chain.

a. GE Aviation Engine Services Singapore, which I visited last year, recently became the first maintenance, repair, and overhaul, or MRO, facility in the world to use advanced additive manufacturing technology to repair airfoil components in commercial jet engines. This will further entrench its position as GE Aviation’s largest site globally for engine component MRO, and strengthen Singapore’s aerospace industry.

b. Advanced manufacturing in food-related value chains also offers exciting growth opportunities, especially in areas with strong synergy with sustainability. Plant-based food, for example, is projected to grow by 100 times by 2050 across the world. Oatside is one such local plant-based startup, and Singapore’s first homegrown oat milk brand. It focusses on sustainable sourcing and production, and is tapping on Enterprise Singapore’s Market Readiness Assistance grant to gear up for expansion into Southeast Asia, Korea, Japan, China and the Middle East. I thought Members would be excited to try this local product, so I have arranged for Oatside milk to be served in the dining areas here at Parliament. You can try the milk on its own, or have it with some freshly made coffee from Hook Coffee, a local coffee company that has expanded significantly through leveraging e-commerce.

22. To make a further push towards our Manufacturing 2030 ambitions, we will redouble efforts to grow a vibrant core of Singapore Global Manufacturers that are deeply innovative and can deliver distinctive offerings to their customers. Our economic agencies will provide bespoke support for manufacturers with strong potential, to deepen their capabilities and expand their global reach.

a. One example of a globally-oriented Singapore manufacturer is Akribis Systems, a global leader in motion control solutions. Akribis owns core technologies in direct drive motor components, robotic actuators, and linear stages which are critical to build high precision equipment for the semiconductor, electronics and medtech industries. Akribis is headquartered in Singapore and has a factory and innovation centre here. It has significant global reach, and its overseas business contributes to over 75% of its total revenue.

23. We must continue to strengthen Singaporeans’ interest in manufacturing, and develop a strong local pipeline of talent. We also need to ensure that Singaporeans can access the good job opportunities in the sector. To do so, companies need to offer attractive career progression pathways in line with technological changes, and ensure these prospects are accessible and exciting.

24. We will therefore launch the M2030 Careers Initiative to work with the industry on achieving this, targeting especially our graduates from the Polytechnics and the Institute of Technical Education, or ITE, who have been trained with industry-relevant skills.

a. To level up the industry’s talent development capabilities, the Singapore Precision Engineering and Technology Association, or SPETA, will work with industry partners such as the Singapore Semiconductor Industry Association and our Institutes of Higher Learning to develop a Manufacturing Employer Handbook. The Handbook will provide a range of human capital best practices and resources, to support companies in developing structured career progression pathways for their employees. SPETA will identify and work with at least 20 companies to pilot the adoption of these practices and pathways.

b. We are also working with companies to offer additional high-quality internship opportunities for students in ITE. We aim to secure at least 200 places from 60 companies by end-2022. These internships can go a long way in shaping students’ perception of the sector and kindle their interest. One example is KABAM Robotics, a robotics solution provider headquartered in Singapore in the service robotics industry. KABAM currently has three interns in roles such as software and hardware development, and is looking to bring on another five soon. One of its past interns, Ms Rachel Lim from the Temasek Polytechnic School of Engineering, was given the opportunity to work in the Products team, to support the design, development and assembly of robots, as well as conduct performance testing and analysis. Rachel enjoyed her stint so much that she has decided to join KABAM as a full-time Product Engineer, starting next week!  I look forward to more of such conversion stories in the near future. 

c. We will also work with selected companies to pilot the Accelerated Pathways for Technicians & Assistant Engineers (Manufacturing) Grant, or the “APT(M) Grant”. This will support companies to hire and train ITE graduates for critical technician and assistant engineer roles through on-the-job training, with career progression pathways and competitive salaries.

Trade 2030

25. Let me now talk about trade. Given our small domestic market, global connectivity is essential to help our enterprises grow beyond our borders. As one of the world’s leading business and transport hubs located in one of the most economically dynamic part of the world, we are in a very strong position to take advantage of growth opportunities in the region. Ms Janet Ang asked how we will secure Singapore’s status as a key node in the global trading network, and Mr Edward Chia asked how we are helping our companies seize regional opportunities. We are embarking on a few key moves. 

26. First, we are proactively strengthening regional economic integration through ASEAN and other platforms. This is particularly important in a bifurcated world with increased protectionism and global competition. Greater regional cooperation and integration will not only enhance access to markets and create opportunities for our businesses, but also enlarge the economic pie for our entire region.

a. We are playing a leading role in key regional Free Trade Agreements, or FTAs, such as the Regional Comprehensive Economic Partnership, or RCEP – which is the world’s largest FTA – and as the Chair of the Commission of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, this year.

b. We will also continue to facilitate trade by shaping the rules of the game and setting high standards in emerging areas. We are pioneering new agreements, such as Digital Economy Agreements which facilitate cross-border data flows and digital trade, as well as Green Economy Agreements. We will continue to work with like-minded partners such as the UK, South Korea, Australia, New Zealand, and others, to secure benefits for our companies and people. 

c. Ms Mariam Jaafar asked about FTAs. It is important to help our enterprises, especially the SMEs, utilise and benefit from FTAs. Singapore’s network of 27 FTAs has brought many benefits to our companies, including tariff savings, stronger intellectual property and investment protection, a more conducive business environment, and increased regulatory transparency. We will continue to work with industry partners, including the Singapore Business Federation, to proactively engage SMEs and provide them with the necessary support to take advantage of our FTAs.

27. Second, we will embark on a Trade 2030 strategy – to grow our trading volume, widen the types of trading activities in Singapore, and expand trade with other parts of the world. From 2020 to 2030, we aim to grow our export value from S$805 billion to at least S$1 trillion, and double our offshore trade value from US$1 trillion to US$2 trillion. We also want to capture more re-exports and transhipment flows, to embed Singapore more deeply into global supply chains.

28. To achieve this ambition, we need to redouble our efforts to build a strong ecosystem of trading companies and activities.

a. We will boost our efforts to attract leading Global Traders and increase value capture for Singapore, by anchoring more of their upstream, downstream and innovation activities here. These Global Traders will also serve as platforms to help other Singapore companies to break into overseas markets.

b. We will also accelerate efforts to grow a strong core of Singapore Global Traders, which are locally-grown traders that command global scale and are highly innovative. To do so, Enterprise Singapore will tap on its full range of programme offerings, such as Scale-up SG and the Enterprise Leadership for Transformation Programme, and provide bespoke support tailored to each firm’s unique circumstances and ambitions. These will cover areas such as talent development, innovation, internationalisation, and financing.

c. For instance, Fish International Sourcing House, or FISH, is a homegrown seafood trader and graduate of the Enterprise Leadership for Transformation Programme. It has established presence in over 90 markets. To grow its trading business further, the company plans to invest more than $20 million to set up a 240,000 square foot seafood processing and innovation centre in Singapore, which will enable it to seize new growth opportunities. In addition, FISH intends to almost triple its current headcount of 25 by hiring another 45 employees over the next few years. FISH is also poised to have an impact on our larger trading ecosystem by partnering Singapore enterprises and helping them break into new markets, by allowing them to leverage its existing strong overseas distribution network to grow.

29. Growing our trading volume will create good jobs for our people. The trading sector is one of Singapore’s largest employers with over 300,000 employees in 2020, of which around 80% are locals and close to 70% are PMET jobs. To take on the many attractive opportunities that will emerge from the continued growth of this sector, we must build a workforce with skills and knowledge needed. We have embarked on a suite of workforce upgrading initiatives for the trade sector, such as the creation of a Jobs Transformation Map, and a Career Conversion Programme for Wholesale Trade Professionals. In addition, we are working with industry and Institutes of Higher Learning, to develop more talent in the trading of commodities such as Liquified Natural Gas and carbon credits.

Enterprise 2030

30. Let me now talk about enterprises. Our Singapore Economy 2030 vision needs to be supported by a vibrant ecosystem of Singapore enterprises that are future-ready, globally competitive, and possess deep innovative capabilities. These enterprises will then create good jobs and meaningful careers for Singaporeans. 

31. We will therefore embark on an Enterprise 2030 strategy, to scale up efforts to identify and support promising local businesses, including through the Singapore Global Enterprises initiative to support their growth into global champions. Second Minister Tan See Leng will elaborate on the concrete steps that we will be taking.

Preparing our Workforce for the Future

32. Our Singapore Economy 2030 vision would be neither achievable nor meaningful, if it is not anchored on an unwavering belief in uplifting our people. Enterprises also need a strong workforce with the right skillsets and capabilities to succeed. 

33. Mr Liang Eng Hwa, Mr Shawn Huang and Mr Saktiandi Supaat asked how the Government is building a future-ready workforce. This must be a whole-of-economy effort with close tripartite coordination and collaboration between workers, companies, and the Government. Minister for Education Mr Chan Chun Sing and the Minister for Manpower Dr Tan See Leng will be elaborating on initiatives to develop our local workforce, and help displaced workers upskill and reskill, so that they can continue to fulfil their potential by taking on new job roles or moving to emerging sectors in a nimble fashion.

34. I agree with Ms Janet Ang that company-led training is critical. Companies need to step up, to consistently and persistently invest in human capital to recruit, retain and nurture talent. Workers too need to play their part, and be open to learning new skills and adapting to new roles.

a. As the Minister for Finance announced in the Budget speech, we have relaxed the eligibility criteria for the SkillsFuture Enterprise Credit (SFEC) for one year, to enable more small and micro enterprises to tap on the credits and upskill their workforce.

b. There is simply no substitute for well-structured on-the-job training. Besides ensuring that workers are trained in relevant skills, such investments by employers can also help create a highly engaged and productive workforce. I agree with Ms Foo Mee Har that initiatives like the Company Training Committees, or CTCs, play an important role in this regard. NTUC Deputy Secretary General Chee Hong Tat had earlier spoken at length about how CTCs have supported companies in their transformation efforts during the Budget Debate. I would like to reassure Ms Foo that even smaller companies such as SMEs can also benefit from CTCs. One example is Vicinity Studio, a local content production company founded in 2017. The company worked with its union – the Creative Media and Publishing Union, or CMPU – and the NTUC Training and Placement ecosystem to conduct an Operations Technology Roadmap, and developed a three-year workplan to transform its business and workforce. This helped Vicinity take steps to improve its HR capabilities and staff competencies. The Studio has since grown its business and hired 13 additional new staff, some of whom are interns and SG United Trainees.

c. I urge enterprises to tap on these available resources, and work with us to strengthen our economy and workers together.

Conclusion

35. Sir, let me conclude. 

36. Our enterprises and workers have come far in the fight against the pandemic. The pandemic is not yet over, and the future will continue to surprise and challenge us in more ways than one. The conflict in Ukraine will add bumps in our road to recovery and growth. But let us look ahead to the future with confidence and resolve. We will need to work hard to build on our strong fundamentals, strengthen our agility to respond to uncertainties, and amass the fortitude to make adjustments that can be painful in the short run, but will pay handsome dividends in the long run.

37. The chapters of our Economy 2030 vision are filled with exciting stories waiting to be written. As we continue our work to grow and develop our economy, we can look forward to a wide spectrum of new career and business opportunities for our workers and enterprises to explore. Some of these may not even exist today.

38. As long as we continue to stand together as one, as we have done through the pandemic, and look upon the future with a spirit of enterprise and discovery, I have every confidence that we will make progress towards building a future economy that will meet the aspirations of our workers and companies, and inspire generations of Singaporeans to come. Thank you.