Speech By Henry Kwek
MP for Nee Soon GRC
On the Enterprise Singapore Bill
1. Thank you Madam Speaker for allowing me to speak on this important Bill, which is timely given the many headwinds facing us. For one, globalization has changed trade and investment flows and patterns in recent years. Further, the continued rise of China has impacted production networks in the region, including Singapore’s as we became less cost competitive in many manufacturing operations.
2. All of these changes have also meant that product life cycles and industry evolve much more rapidly than before. We have to respond swiftly to such changes or risk being eliminated or irrelevant. These changes are not just unique to certain companies; they are prevalent across industries. Hence, the response requires closer collaboration between everyone in the industry and government so that policies and market realities are more congruent.
3. The government has recognized this need for alignment several years ago and that is why we saw the birth of initiatives such as the National Productivity Council and the Future Economy Committee. We also saw the establishment of SME Centres to bring policies and government assistance closer to the ground and to the door steps of industry.
4. However, I am very concerned about our SMEs, as they need to change fast. Despite all of these efforts, we have yet to see the full implementation of the Industry Transformation Maps (ITMs). The point we need to take note of is that not everyone in the industry will successfully be able to adopt or follow the ITMs and we need to understand why this may be so. From my understanding, I find that there are two common factors that help industries be successful in following the transformation spelt out in their respective ITMs. Firstly, they have had industry leaders who have successfully worked with the government and then managed to seek a buy-in from the rest of their industry. Secondly, they have had Trade Associations and Chambers (TACs) who have had strong and focused leadership, able to steer the industry to a clear path of adoption.
Professionalization of TACs
5. I have three points to propose in how we can help industries better adopt the ITMs. Let us first start with the TACs, since I have highlighted above that they could play a crucial role. The accountancy and law sectors in Singapore are prime examples of how the TACs have been professionalized. For one, they are staffed by relevant industry professionals who then bring with them the domain expertise in the industry-promotion or transformational work that they do. Having people with the relevant knowledge and experience in the TACs also means that they are able to help the TACs develop industry code of conduct, standards, benchmarks and developmental programs. So there is great value in getting each TAC to be staffed by people from their respective industry.
6. In particular, there is a need to do so to provide support for smaller companies and those still in the growth stage. That is because the government already mandates that all Singapore-registered companies with a share capital of $500,000 and above have to join the Singapore Business Federation (SBF), which is well-resourced, well-staffed and run professionally. The SBF thus has enough capital, legitimacy and is professional enough to have a clout to help the larger companies.
7. But even so, the real leadership and drive for industries to transform under the ITMs must come from the specific trade associations and not the more general broad business chambers due to the need for more intimate industry knowledge and experience. For instance, it will be presumptuous of us to assume that one of the ethnic-based business chambers is able to effectively drive the transformation of the precision engineering ITM. Perhaps they could if they have the relevant knowledge or exposure. But there is a high probability that this may not be the case.
8. Thus, we must look to get the trade associations to have greater ownership and participation in the industry ITMs and we should also see how we can better resource these associations and industry bodies to have relevant professionals so that they can provide effective leadership.
Transforming SME Centres
9. And that brings me to my second point – the role of the SME Centres. Since it will be difficult to ensure that every sector has an effective TAC even though we may try to professionalize it and get it more involved because the reality is that the smaller industries and hence smaller TACs may still need help. For such sectors, the SME Centres can play a crucial role. For now, the SME Centres spend a large proportion of their time in bringing the government grants and incentive schemes to companies. However, with the launch of the Business Grant Portal (BGP) companies here, especially those who are more savvy, will be able to self-help for government schemes. That will, in turn, leave the SME Centre staff with more capacity, giving them an opportunity to drive the ITMs.
10. One way this can be done is for our industries to leverage on the geographical proximity of the 12 SME Centres. For instance, the SME Centres can help provide the industries with the advantage of the use of common facilities, shared services and shared marketing resources. This will especially help the smaller industries and companies. The SME Centres can also develop industry specific capabilities by developing existing or hiring new staff with the relevant knowledge. Alternatively, agencies like SPRING Singapore may also consider co-opting staff with specific industry knowledge to an SME Centre so that the SME Centre can then become the point agency to help with the relevant industry’s ITM.
More Effective Communications
11. While we do all this, there is still the danger of some companies who fall through the cracks. After all, we cannot force some companies to come to the SME Centre if they are not aware of the initiatives or the drive to transform. And this is a real problem.
12. Our Singapore SME landscape is such that many of their owners or management may not be English-educated and thus not familiar with many of the government schemes or incentives. While I know agencies like SPRING have made an effort in recent years to reach out to the non-English media, this may still not be enough. Take the Chinese-media for instance. Reaching out to SMEs through Lianhe Zaobao may still not be enough as some of them read the evening newspaper or Wen Bao. The problem is that many of our SME leaders are not plugged into national news and do not simply have the luxury of time to flip through the newspapers in a day. Hence, we should explore all forms of media channels, including radio and the media from the Malay and Tamil languages.
13. While the Bill has outlined several steps to help SMEs here better adapt to global headwinds and take advantage of international opportunities, we need to also make sure that our industries and companies are geared up to do so. The ITMs are a great strategy to get them more prepared for the future and I believe that the proposals I have highlighted today can complement this Bill to make them more future ready.
14. Thank you, Speaker Sir. I support the Bill.