Mr Mark Lee, Vice-Chairman of Singapore Business Federation and Co-Chair for the Alliance for Action
Dr Peter Ong, CEO of KH Roberts
Ladies and Gentlemen,
1. Good morning. Thank you for inviting me to the launch of the Report of Alliance for Action (AfA) on Business Competitiveness.
2. Nine months ago, my Ministry established this AfA with the Singapore Business Federation to explore how businesses can remain competitive amidst an uncertain global economic environment.
3. We live in an increasingly turbulent world, fraught with intensifying big power contestation, de-globalisation and climate change. These will greatly impact trade-dependent, open economies like ours.
4. At the same time, these shifts also present opportunities for Singapore and our region.
a. As businesses around the world strive to mitigate risks, build resilience, manage costs and explore new opportunities, Southeast Asia, including Singapore, is emerging as an attractive hub for manufacturing, finance and insurance services, professional services, as well as information and communications.
b. In fact, while global Foreign Direct Investment (FDI) flows declined by 10%, FDI flows to ASEAN held strong in 2023, and reached a high of US$230 billion.
c. ASEAN’s growth for 2024 and 2025 is expected to remain robust at around 5%, higher than the projected global average of 3%. ASEAN is projected to become the fourth largest economy in the world by 2030, with a combined GDP of US$4.5 trillion.
5. We must therefore position Singapore well so that our businesses can take advantage of the emerging opportunities, and we can continue to attract and anchor high-quality investments here to grow our economy.
a. We will not be able to compete on cost alone; rather, we must ensure that we continue to build a skilled and competitive workforce, optimise land use, and ensure an efficient and pro-business environment.
b. These form the three key pillars that the AfA have focused on in its work – namely, manpower, land and regulations.
c. Let me now speak on each of these in turn.
Building a skilled and competitive workforce
6. First, manpower. There are three key challenges which we have to confront:
a. One, with an ageing population and low birth rate, we will need to contend with slowing resident workforce growth in the years ahead. It is therefore critical for us to raise the productivity of our workforce, so that we can continue to drive the growth of our economy and our wages.
b. Two, given the rapid pace of technological advances, such as in artificial intelligence, we will see more frequent disruptions to businesses and shorter product lifecycles. This will require us to refresh the skillsets of our workers more regularly, so that they can stay relevant and are less likely to be displaced.
c. Three, as our region grows in importance, we will need to ensure a strong base of local and foreign talent with the right expertise, networks and experience, so that businesses want to be based here and use Singapore as a hub to serve the region.
7. This year, we introduced the SkillsFuture Level-Up Programme to encourage and support mid-career Singaporeans aged 40 years and above to refresh their skills.
8. We need employers to step up their efforts to re-skill and up-skill their workers, while re-designing their existing job roles, as they transform their businesses.
a. I am glad to read of the AfA’s recommendations on how we can strengthen support for businesses to continue to invest in enterprise and workforce transformation.
i. In particular, I note the AfA has suggested that the SkillsFuture Enterprise Credit be extended or repurposed beyond its current expiry in June 2025.
b. We will study these recommendations to help companies uplift their businesses and workers.
9. In addition to refreshing their skillsets, we need to help our local workforce gain overseas experience, so that they may in time be ready to take on regional or global corporate leadership roles.
a. I agree with the AfA that we should encourage businesses to tap on existing schemes such as the Singapore Global Executive Programme and the Overseas Markets Immersion Programme to develop a pipeline of globally ready local talent to help them tap the opportunities in our region.
Land
10. Let me move on to land.
11. Given our physical land constraints, we need to optimise our land use and ensurea steady supply of industrial land to attract and anchor new investments.
a. This means being judicious about what types of activities we allocate land to, in order to support the transformation of our economy towards higher value-added activities.
b. This also means intensifying the use of available land, through raising the plot ratio and, where feasible, consolidating related industries in dedicated facilities such as TimMac and Kranji Green for greater efficiency, synergy and productivity.
i. For example, Beng Hock Mechanical Engineering, which specialises in the design and custom fabrication of equipment and system integration for their customers in waste management, engineering and logistics has relocated to TimMac.
ii. While the relocation has created some inconvenience and costs, this move has placed the company closer to industry players as well as its partners and clients, especially to the waste management and recycling companies located at the adjacent Kranji Green.
12. We also recognise the need to provide certainty to businesses to plan their investments and future growth.
a. The AfA has proposed recommendations on lease tenures and renewal criteria, as well as how we can further raise the productivity of industrial land through consolidation, intensification and partnerships.
b. We will study these ideas closely to see how we can better support our businesses, while ensuring that we optimise our available industrial land and drive transformation.
Pro-business regulatory environment
13. Next, we want to ensure a pro-business regulatory environment.
14. As Prime Minister Lawrence Wong had set out in his National Day Rally, the Government is conscious of the need to ensure a business-friendly environment.
a. On one hand, regulations are important because they provide clarity and certainty to businesses.
b. On the other hand, regulations introduced over the years may impose unnecessary administrative and compliance costs on businesses. I am sure each of them would seem appropriate and necessary at that time, but the situation may have changed over time, and we must review these regulations regularly and get the balance right.
c. We must also ensure that our regulations continue to encourage innovation, and not deter businesses from exploring new solutions, especially in nascent areas such as green technologies or AI.
15. Since PM’s announcement, some of my fellow Ministers and I have been engaging businesses to hear their feedback on how the Government can simplify its rules and processes, and keep our regulatory environment for businesses facilitative and progressive.
a. One area which we are looking into is the regulations pertaining to the deployment of green solutions, as this is a fast-growing area with emerging technologies that may require new regulatory approaches.
i. For example, up until recently, deployment of energy storage systems underground was not allowed for fire safety reasons.
ii. Businesses have provided feedback, including through the AfA, that allowing these systems to be installed underground would better enable them to optimise the use of land above ground.
iii. We discussed this with the Singapore Civil Defence Force (SCDF), and the SCDF has since promulgated new fire safety requirements to facilitate the deployment of battery energy storage systems underground.
iv. Credit must go to SCDF for leaning forward in embracing new technologies and supporting our enterprises, as these regulations are the first of its kind globally.
b. Similarly, SMS Low announced a few weeks back that we will set up a Small and Medium-Sized Enterprises Pro-Enterprise Office (SME PEO) under Enterprise Singapore in the first quarter of 2025. This is in light of feedback from businesses, including from the AfA.
i. The SME PEO will serve as a one-stop centre to assist SMEs with their feedback on our regulations, allow us to track and improve our service standards, and enable us to identify systemic issues in our regulatory frameworks.
Conclusion
16. Once again, let me thank the AfA members for undertaking this comprehensive review on how we can help businesses remain competitive.
17. By bringing together industry, unions and Government, the AfA is a good example of our tripartite partnership to build a skilled and competitive workforce, optimise land use, and an efficient and pro-business environment.
18. Let us build on this partnership to help our businesses navigate the complexities of the global market, seize the opportunities that lie ahead, and chart the next phase of growth for the Singapore economy. Together, we can continue to create good jobs for Singaporeans and help them achieve a better quality of life.
19. Thank you.