HEAD V - MINISTRY OF TRADE AND INDUSTRY

Head V – Ministry of Trade and Industry

Building capability of companies

Ms Jessica Tan Soon Neo: Sir, I beg to move,

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That the total sum to be allocated for Head V of the Estimates be reduced by $100.

Mr Chairman, as we have heard in Budget 2011 and the discussions over the last few days, Singapore's economic success over the next 10 years will depend on how companies operating in Singapore innovate and raise productivity to stay competitive to drive sustainable growth. With the constraints and challenges companies face with regard to access to labour and increasing cost of doing business, there will be adjustments required of businesses. These adjustments may be painful for businesses as they may involve structural changes that will take time to materialise. So what I like to ask the Minister is that looking beyond the funding support, can the Minister share the strategies that are in place to assist businesses in Singapore to make the changes required to innovate and increase productivity?

Funding, while crucial for innovation, is not sufficient and actually what is more important is know-how. There has been much discussion on having much more targeted programmes and in having sectoral level approaches to achieving the intended impact. Can the Minister share the status of these sectoral initiatives? What roles do trade associations and chambers play in these sectoral programmes to help businesses? Because as Senior Minister of State Grace Fu has shared on the construction industry in the previous COS discussion, what drives innovation in construction is that it really requires know-how, investments and the ability for the industry to really take the lead in technology and implementing technology.

Actually, there is a bigger piece to be played. There is also the whole supply chain. Really, if we want to look at businesses being productive, if we look at BIM, for example, one company doing it will not have productivity. But actually it

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is the whole supply chain, the whole eco-system of construction companies, their suppliers, their eco-system. I have spoken to businesses and what they have asked for is help to really drive the sectoral-level changes because that cannot be done with one company. So I think that is the thing that will be required in the near future if we really want to accelerate it.

The Budget has also introduced the $850 million Enterprise Development Fund (EDF) to support enterprise growth in the next five years. Businesses welcome the EDF and are hopeful that the EDF will help them as they expand internationally. Can the Minister share details on the EDF and the criteria and how companies can qualify and tap on the EDF?

With the increasing role of the services sector in our economy, service excellence is key in ensuring that companies remain competitive and that they are able to raise service standards to continue to win and retain customers. What is the progress that we are making in this aspect? What initiatives are in place to ensure that we can step change and differentiate the level of service standards of companies in Singapore? It is great that we have MBS. It is great that we have great restaurants, eateries and we bring these great entertainments to Singapore. But what is more important is really the experience, the experience of both Singaporeans and visitors when they use these services. I think this is one area that we really, really need to invest and step change that because our whole economic reliance is actually shifting towards services, and that is an aspect that I really like to understand what more are we doing in terms of investing and really bringing that step change and know-how into this space.

When we talk about leading in the industry and for Singapore to take the lead and we talk about innovation and

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productivity, I really go back to my point about the whole partnership of industry as well as the Government. I do not like to say this, but I think as much as our Civil Service likes to be able to help and lead the industries, the Civil Service cannot do it alone because they just do not have all the know-how. And, therefore, the partnership with industry, the sectoral approach, both at the services level as well as at the industry level is going to be very critical. Sir, I really like to hear about the progress and the strategies going forward.

Access to the growth markets of Asia

Mr Wee Siew Kim: Mr Chairman, riding on a growing Asia is one key strategy for Singapore companies. In recent times, we cannot ignore the growth of China and India. The headroom for further growth is evident and tremendous. However, striking out and thriving in such markets pose their set of challenges and can be rather daunting for smaller companies.

How can MTI assist Singapore companies to strike out and seize opportunities in the growth markets of Asia, especially India and China?

What are the ways to help the SMEs and larger Singapore companies internationalise as well as build the set of capabilities that promotes survival in foreign markets?

There is a myriad of schemes like the Productivity Fund, Enterprise Development Fund, the PIC, R&D incentives, etc. But they can all be rather bewildering for many smaller companies. How can the Ministry assist to reach out and help proactively as opposed to waiting for companies to come scampering for help? The MTI should set its mission as helping companies venture into new markets and, hopefully, as some of them find new growth opportunities, everybody succeeds.

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Innovation could also be a selling and differentiating point. I understand that there are new schemes that help fund test bedding of ideas in Singapore. I support this initiative as we already have the disadvantage of a small local market. This difficulty will be compounded if our companies cannot provide home market track record – making it an even harder sell. Can I plead with MTI to be more liberal in funding such test bedding and not be too fixated by any particular industry sector? One can never know where innovation will take root. In such situations, maybe let a thousand flowers bloom may be the way to go, rather than trying to pick winners.

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