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Speech by Dr Tan See Leng, Second Minister for Trade and Industry, During Ministry of Trade and Industry (Mti)’S Committee of Supply Debate, on Tuesday, 2 March 2021

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Speech by Dr Tan See Leng, Second Minister for Trade and Industry, During Ministry of Trade and Industry (Mti)’S Committee of Supply Debate, on Tuesday, 2 March 2021 SPEECH BY DR TAN SEE LENG, SECOND MINISTER FOR TRADE AND INDUSTRY, DURING MINISTRY OF TRADE AND INDUSTRY (MTI)’S COMMITTEE OF SUPPLY DEBATE, ON TUESDAY, 2 MARCH 2021 “Anchor Locally, Compete Globally” Introduction 1. Mr Chairman, I shall speak about two ways through which we will help our enterprises emerge stronger from the crisis - first, by anchoring strong local enterprises; second, by helping our enterprises go global. Building a Strong Crop of Singapore Enterprises to be able to Compete Globally 2. Mr Liang Eng Hwa, Ms Foo Mee Har, and Mr Shawn Huang asked how we intend to support businesses and nurture them into local champions. We will do so by pressing on with industry transformation at both the sector level, and contemporaneously at the ecosystem level. Industry Transformation 3. Our overriding priority over the past one year has been to weather the COVID- 19 storm. However, we cannot hunker down forever; we must keep our eyes focused on the future and press on with industry transformation to emerge stronger. 4. Fortunately, we are not starting from scratch. We had earlier embarked on transformation through our 23 Industry Transformation Maps (ITMs). We are refreshing them to make sure they are still relevant in light of COVID-19, and that we are able to unlock new opportunities that have arisen globally over the last 12 months or so. 5. Mr Liang Eng Hwa asked how we will turn up the pace of transformation. We will do this by strengthening our industrial ecosystem and accelerating Industry 4.0 (i4.0) adoption. 6. One example is the manufacturing industry. This is fundamentally changing with digitalisation, robotics, and new technologies like additive manufacturing. The industry needs to transform to achieve our Manufacturing 2030 vision, and we are taking decisive steps to do so. 7. The Smart Industry Readiness Index (SIRI) launched in 2017 helps manufacturing firms take specific, measurable steps towards transformation. We are working with the World Economic Forum (WEF) to make SIRI a global benchmark to facilitate our SIRI-assessed firms to compete globally. 1 8. The JTC-Singapore Business Federation (SBF) Industry Transformation initiative, which was launched last year, will further help local manufacturing companies in their i4.0 transformation by providing access to resources like curated training workshops and capability-building initiatives. 9. We will also create new peaks of manufacturing excellence by bringing together related companies to collaborate, to experiment and to succeed together. Just as Jurong Island and the Seletar Aerospace Park catalysed our chemicals and aerospace industries respectively, so too will the Jurong Innovation District (JID) be the catalyst for our i4.0 ambitions. The JID will house the Advanced Remanufacturing and Technology Centre (ARTC) and factories of the future, and it will serve as the focal point to develop and test-bed new technologies like 5G and autonomous vehicles to serve global markets. 10. i4.0 is most commonly associated with the manufacturing sector, but actually, the spirit behind it – one of being forward-looking, making the most of technology, finding ways to do things more efficiently and smartly – must be a pervasive culture for all of us. It has to apply aggressively across all industries. And I am happy that many of our companies have imbibed this spirit. Ecosystem-Level strategies to Help our Companies Pursue the Next Bound of Growth 11. Besides sector-level transformation, we will also do more at the ecosystem level to nurture all businesses, regardless of size and sector, to pursue the next bound of growth. Pressing on with Building Enterprise Capabilities 12. In 2020, we enhanced co-funding schemes such as the Enterprise Development Grant (EDG) and Productivity Solutions Grant (PSG) to help companies transform their capabilities. Over 15,000 companies embarked on transformation projects with ESG’s support in 2020. In spite of the crisis, this is 50% higher than in 2019. 13. We will also continue strengthening enterprise leadership capabilities through schemes like the Enterprise Leadership for Transformation (ELT) and Scale-up SG programmes. In particular, through Scale-up SG, we aim to groom another 50 future local champions over the next two years. 14. Mr Chairman, we will continue with this suite of support to strengthen enterprise capabilities, and DPM has spoken about the various scheme enhancements we will make to encourage more companies to come onboard. But let me emphasise three key areas that will form the next bound of growth for our businesses to be able to compete globally – a Team Singapore Approach; Access to Financing; and Innovation. A Team Singapore Approach to Capture Opportunities 15. Ms Foo Mee Har and Mr Edward Chia asked how our companies can adopt a collaborative mindset such that the entire value chain is uplifted, and everyone benefits. 2 16. Indeed, we must embrace this Team Singapore approach, because our competition is not with one another here, but with the world. Individually, even our largest companies are modest by international standards. But collectively, we can win as Team Singapore. 17. We are doing much more to develop our winning game plan. The Government is partnering the private sector on the Alliances for Action (AfAs), and they bring together a diverse range of industry and public sector stakeholders to quickly seize opportunities in sectors such as tourism, logistics, and others. 18. For example, the AfA on Smart Commerce has brought together industry players to pioneer new operating models, to digitalise, and to diversify revenue streams. The AfA had launched an Online-Offline 11 November (“11.11”) Campaign, incorporating gamification elements to provide retailers with more marketing opportunities, and deliver consumers a whole new experience. 19. Another example is how various industry stakeholders collaborated to create opportunities in the Meetings, Incentives, Conventions and Exhibitions (MICE) sector. The Safe and Innovative Visitor Experience AfA developed a prototype for hosting exhibitions safely amidst the COVID-19 pandemic, and tested it in November last year at the TravelRevive tradeshow. This attracted close to 1,000 attendees, comprising 65 foreign visitors from 14 different countries, and it showed that Singapore remained open for business, successfully and safely. 20. A big part of our ecosystem strategy is strengthening the partnerships between large and small companies. Hence, I agree with Ms Janet Ang that LLEs can play an important role in uplifting our SMEs. ESG’s PACT programme encourages such mutually beneficial partnerships between companies. PACT has supported more than 280 partnerships and benefited more than 1,500 Singapore-based firms since 2010. The National Innovation Challenges (NIC), launched in 2020, also helps to catalyse cross-company partnerships to address sector-wide challenges. The NIC also helps smaller companies to build up their track record in the process. 21. In addition, our Trade Associations and Chambers (TACs) will also play an important part in fostering industry partnerships. MOS Low will speak more about this in her speech later. Enabling Greater Access to Financing and Capital 22. Next, whether our businesses are planning to develop new products or expand overseas, having access to financing and capital is crucial for our enterprises’ growth ambitions. This could be in the areas of product development or international expansion. 23. The Government carefully monitors our financing ecosystem to ensure that all companies - from startups to SMEs to LLEs - can access the capital they need. We extended the Enterprise Financing Scheme-Venture Debt (EFS-VD) programme and raised the maximum supportable loan quantum from S$5 million to S$8 million. This will give high-growth enterprises greater access to financing. 3 24. Ms Foo Mee Har and Ms Janet Ang asked about how the new Local Enterprises Funding Platform (LEFP) can support our local companies. This is indeed a very major initiative. The Government provides financing support to grow local enterprises, particularly when there is a dearth of private capital. Most of these are in the form of grants or loans. Financing equity initiatives are typically targeted at startups and SMEs, where the risk can be higher or a longer runway for more patient capital is required. This is done through existing co-investment programmes such as those managed by Heliconia and EDBI. 25. However, there is an increasing need to support our larger companies with the ambition to become regional or even future global champions. And this is where the LEFP comes in to precisely meet this need. Drawing on the network and expertise of Temasek, the LEFP will actively seek out promising LLEs to invest in, focusing on sectors that are aligned with the engines of growth in our economy. This complements existing efforts by EDB and ESG to help our most promising firms to scale up, soar, and reach their full potential. Supporting Enterprises to Innovate 26. We will spare no effort to support our enterprises to innovate. But we hope enterprises also do their part to invest in innovation. Businesses that leverage innovation are better placed to compete globally and capture value for our economy. 27. As DPM and Minister Lawrence Wong have mentioned in their speeches, RIE is a cornerstone of Singapore’s national strategy to develop as an innovation-led economy. 28. Associate Professor Jamus Lim spoke about increasing R&D spending. The Government is committed to investing about 1% of our GDP in research, innovation and enterprise over the next five years. This is similar to our commitment for RIE2020 and our earlier research plans. 29. Our investments in RIE is at a comparable level to other Small Advanced Economies (SAEs). Unlike what Associate Professor Jamus Lim alluded to earlier, we are by no means far behind. Compared to more mature advanced economies, our RIE ecosystem is still at a relatively early stage of development.
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