SMEC BUDGET 2017 RECOMMENDATIONS PRESS CONFERENCE 4 JANUARY 2017, WEDNESDAY. Opening Address by Mr Lawrence Leow, Chairman of SMEC

Transcription

1 Page 1 of 6 SMEC BUDGET 2017 RECOMMENDATIONS PRESS CONFERENCE 4 JANUARY 2017, WEDNESDAY Opening Address by Mr Lawrence Leow, Chairman of SMEC Ms Sim Ann, Senior Minister of State, Ministry of Culture, Community and Youth & Ministry of Trade and Industry Mr Teo Ser Luck, Minister of State, Ministry of Manpower Mr Ho Meng Kit, CEO of SBF SMEC Sub-Committee Chairmen Ladies and gentlemen Good morning Introduction 1. A very warm welcome and Happy New Year to all of you left the global economy with waves of uncertainty; Brexit in Europe, the presidential election in US, China s slowdown, the anticipated interest rate hike by Fed and the prolonged suppression of oil prices, you name it we

2 Page 2 of 6 have it. 3. Apart from these economic factors, a steady emergence of innovative business models and technologies, that can potentially disrupt an industry or across multiple industries, have greatly intensified the competition between businesses. 4. In the past 50 years, Singapore enjoyed economic stability and success, with the government s efforts in positioning Singapore as a nation of choice for multi-national companies to anchor their businesses here bearing fruits. Our government-linked corporations also made huge strides in extending their business presence and footprint in the region. If we regard MNCs and GLCs as the twin engines that have propelled our growth all these years, we now need to find a third engine of growth to carry us forward and further. 5. Our local businesses have been known to provide excellent support to the global value-chain. However, as business support services become more and more commoditised, with technology and increased connectivity levelling the playing field regionally, even to the extent of globally, Singapore will need to create a new growth engine of globally competitive companies or GCCs driven by technology, innovation and entrepreneurial talent, to

3 Page 3 of 6 stay relevant to the global value chain and boost our economy. 6. Recent developments suggest that some advanced economies are beginning to adopt more inward-looking policies, threatening trade relations and business dealings our local companies have painstakingly built-up. It is imperative that we have greater control over value creation. We need to start creating and owning our own disruptive innovations, in order to develop truly global brands, that are native to Singapore. 7. To do so, we will need to create a business environment that is conducive for the development of globally competitive companies and provide the necessary support and resources to cultivate innovation and technology, two important aspects of which are financing and asset protection. 8. The SMEC has recommended the setting up of a private bourse to cater to technology companies. A private bourse of such will provide technology companies with the necessary financial and funding support from accredited investors. This private bourse will ensure the flow of smart money, which will continue to fuel the new innovative economy.

4 Page 4 of 6 9. Innovation is a process that may require a very long period before bearing fruits of success. For example, innovations in the field of medical technology or bio technology, may take 10 to 15 years before an actual ground-breaking development takes shape. If the right asset protection is not provided, the resources and efforts could be put to waste, especially when these companies like all businesses, are vulnerable to cyclical economic events. 10. Some states in the US, offer asset protection in the form of assignment of benefits for creditors or ABC, which allows the retention of assets such as intellectual property and other know-hows to ensure continuation of the development of such innovations even when a business faces risks of being unable to continue as a going concern. 11. With our small domestic market, it will take time to cultivate a pool of entrepreneur talents inclined to developing disruptive technologies and even then we may not achieve a critical mass. In order to remain competitive, the government could focus on bringing in such entrepreneurial talents from overseas, to be anchored by joint ventures and partnerships with local businesses, in a similar way to how we have successfully attracted MNCs to setup base in Singapore.

5 Page 5 of This year, SMEC s budget recommendations can be broadly divided into two main parts. I have briefly covered the part on developing GCCs as a new or third engine of growth which is very important as Singapore has to continue to remain as an attractive place for trade and business, not only for conventional businesses but increasingly we have to be a choice location for entrepreneurial talents and enterprises with disruptive technology and innovation to anchor their operations. 13. While Singapore continue to develop and transform in tandem with the new business landscape, the survival of our local businesses over this period of slow growth is of paramount importance to ensure that core competencies are not lost due to economic turbulence. 14. Hence, the other part of SMEC s recommendations in budget 2017 is focused on the provision of broad-based support for SMEs to address issues ranging from cost of doing business to manpower and productivity. These recommendations are pointed towards costs reduction and management, as well as enhancing support for business expansion and transformation. 15. In all, the SMEC has put together 21 budget recommendations for 2017, which will be presented by SBF s secretariat in the next segment. I would like to once

6 Page 6 of 6 again thank all of you for your presence here this morning as well as expressed my gratitude towards all the Subcommittee chairmen and members, for taking time off from their busy schedule to contribute to the work of the SMEC. 16. I will now handover to Mr Koh Tat Liang, SMEC Secretariat for the presentation. 17. End.