Speech at Ernst & Young Entrepreneur of The Year Awards, Singapore 2007
Dr Ng Eng Hen, Minister for Manpower and Second Minister for Defence, Shangri-La Hotel
Mr Ong Yew Huat,
Country Managing Partner Ernst & Young Singapore
Mrs Fang Ai Lian,
Chairman, Ernst & Young Singapore
Mr Wong Ngit Liong,
President of Entrepreneur of the Year Singapore Academy and Chairman and CEO of the Venture Group
Distinguished Guests,
Ladies and Gentlemen, and our entrepreneurs
Good evening
Introduction
Let me first thank Ernst & Young for inviting me here tonight to celebrate the successes of some of Singapore's finest entrepreneurs.
Singapore – Land of Opportunity
2. This year, we also celebrate 42 years of nation building. In that short period, a very different Singapore has emerged. Many of us here, have witnessed first-hand that remarkable transformation. Tonight, as we celebrate and recognise those among us who have succeeded, it would be appropriate to ask how we can ensure that Singapore remains a Land of Opportunity for all. In today's context, where Singapore and indeed the World around us have changed, what conditions must exist so that those with ability and drive will continue to succeed? How do we create an environment so that more will dare to try and fulfil their ambitions for rich rewards? These are important questions because the answers will determine our growth potential over the next few decades. As our economy matures and where growth is more-dependent on value-added and innovative enterprises, we do well to create the necessary pre-conditions for alternate paths to success.
3. Some ideas that were thrown up, including those during the last Economic Review Committee in 2002, have been implemented to create a conducive environment. For example, in 2001, the Start-up Enterprise Development Scheme (SEEDS) was started - it provided matching sums for funds raised from third party investors. We expanded this programme last year with an additional $30 million. We also reduce the price of failure by liberalising the bankruptcy regime. ACE – the Action Community for Entrepreneurship – was also launched in 2003. Various initiatives on funding, reducing regulatory burden and aiding internationalisation, driven by both the private and public sector, has helped create a pro-enterprise environment and entrepreneurial mindset in Singapore. Tonight's event and others like the Phoenix Awards which recognises entrepreneurs who achieved commercial success after facing setbacks play useful roles in providing role models for society and our young. MOE has also introduced into the school curriculum, ways to foster a culture of innovation and enterprise.
The ability to move up
4. While specific programs are important, they will not be convincing unless Singaporeans continue to believe that the system allows them to move up; to realise their hopes and dreams for a better future, both for themselves and their children.
5. Can you still move up in Singapore today? I will use two simple proxies – education and housing – to address this. Each has limitations but nonetheless provide a useful macro-view of the upgrading that occurs in our society. From the educational perspective, I am happy to report that we have done well and social mobility is healthy. Personal anecdotes illustrate this. In the recent PSLE, the top student, Natasha Muhamad Nasir, is from a working class family, and initially from a neighbourhood school – Gongshang Primary – before joining the Gifted Education Programme (GEP) at St Hilda's Primary School. At a broader level, 8 out of every 10 GEP students who scored above 270 in 2007 were also originally from neighbourhood schools. Over the past 5 years, 43% of PSC scholarship recipients lived in public housing, and 34% of them came from households with monthly incomes less than $5,000 – about the 55% percentile of households, with 5 of them receiving the President scholarship. We must maintain our strong educational system which facilitates upward mobility for those who perform.
6. For housing, many continue to improve their living standards. From a study by the Department of Statistics released in 2006, of the 354,000 who changed residences in the period 1995 to 2005, 62% upgraded their residences and only 18% downgraded their residences, with the rest changing to similar type of residences as before.
New strategies for a different landscape
7. Beyond education, what are the pre-conditions necessary for our workforce to maintain the drive for Singaporeans to move up and do better? In the 1950s and 1960s, it was poverty and deprivation. GDP was low at only less than $7 billion dollars at today's prices. Entry barriers were also less since labour and rental costs were low. Educationally, competition was less stringent, as, less than 2% of persons in Singapore had tertiary qualifications. It was a low base, and served to spur many to pull themselves through grit and sweat out of poverty. As a result, many made it big, including many seated here, as traders, merchants, bankers, property developers, and so on. The key entrepreneurial qualities that got them through were sheer hard work, determination, thrift, honesty and good networking.
8. One complaint we so often hear today is that our younger generations today lack the "fire-in-the-belly" of these generations who lived and experienced poverty through Singapore's formation years. While success always requires drive and hard-work – and that has not changed – I would suggest that it would be unproductive to set pre-conditions to those in the 50's and 60's. We need alternate models which spell hope and opportunity for younger Singaporeans. We cannot artificially induce conditions of deprivation when our society at large is affluent.
9. Besides, relative poverty and deprivation exist more realistically in pockets of developing countries around us, like Vietnam, China and India, where the markets are also much larger and provide bigger opportunities. You hear many rag-to-riches stories coming out of China today. One story is that of Mr Kwong Yu Wong, the founder of GOME Electrical Appliances Group. Born into a poor farming family in Guangdong, Mr Kwong started buying watches and radiograms to sell in Inner Mongolia. Today, GOME has also expanded multitudes and even ventured into the real estate business, generating a total turnover of USD $3 billion in 2006. Another story is that of the Hope Group, founded by 4 brothers of the Liu family with 1,000 RMB initially in raising quail and hatching chickens. Over the years, the group expanded in the manufacture of animal feed and beat many state-owned rivals and multinationals to become China's largest private held company and a national model of economic reform.
10. For Singapore, we must accept that the landscape has changed significantly from that during the formation years. For example, 23% of our total resident workforce has at least a degree in contrast to less than 2% with tertiary qualifications in 1970. For younger workers, nearly 50% of every cohort will have a degree eventually. With home ownership at 91%, we can therefore expect an average profile of anyone younger than 35 today to have at least a diploma or degree and who has lived all his life in at least a 4 room flat or in private housing. In short, the centre of gravity for younger Singaporeans is typically middle class – these will be their formative experiences that shape their perspectives. Deprivation and poverty will no longer be key drivers of success.
11. How does a typically well-educated young Singaporean measure success today, and how do they intend to go about succeeding? Firstly, they have different icons. On a global scale, they look to those who achieved riches and success from developed countries. Just to name a few, Bill Gates, Michael Dell, Michael Bloomberg, Mark Zuckerberg – the founder of Facebook, Philip Knight – the founder of Nike, and Niklas Zennström – one of the co-founders of Skype, attended universities. They could have chosen to graduate and work comfortably as a skilled employee for the rest of their lives. However, they did not, but went on to be global leaders who decide what running shoes and computer systems we use today. These examples provide hope that affluence need not blunt personal drive and ambition.
12. Secondly, strong institutions – in whatever form – are important. We want to encourage entrepreneurs but the reality is that relative few have the aptitude to succeed alone. Switzerland, for example is a small country that boasts leading companies in finance and pharmaceuticals, home to global industry leaders such as UBS, Credit Suisse, and Norvartis. For Singaporeans, we need create and build the right institutions for our people so that they can continue to excel.
Expand Opportunities
13. For the 21st century, our approach to promote drive and entrepreneurship is to expand opportunities for Singaporeans.
a. We will spend more on education and cultivate other domains such as arts, sports and music. No child in Singapore should be denied good education simply because he cannot afford it.
b. We will also diversify our economy to include more higher-value–added and technologically dependent industries. This is one of the motivations for our increase spending in R&D. Otherwise, we may have a problem of over-educating our brightest, who then find that opportunities here are limited. Many Singaporeans in Ivy League colleges in the US are already head-hunted before they graduate. Apart from high remuneration, the overseas exposure and exciting work environment makes any job offer overseas extremely enticing.
c. Further, initiatives driving the Biomedical, Chemical, Arts, and Design sectors, and the development of the Integrated Resorts will attract Singaporeans to return and work in Singapore. For example, the Duke-NUS Graduate Medical School provides opportunities for Singaporeans who obtained their basic degrees overseas to return to Singapore for a reputable postgraduate specialisation in thematic areas of Discovery Biology, Clinical Research on Cancer and Stem Cell Biology, Cardiovascular and Metabolic Disorders and so on.
Success breeds success
14. But above all, we need winners to spur others in our society on. So tonight's event is an important motivational "video". Your five previous winners; Mr Wong Ngit Liong, Mr Ron Sim, Mr Tay Liam Wee, Mr Vikas Goel and Mr David Teo; and tonight's winner are the strongest endorsement that you can succeed in Singapore.
15. This message of empowerment – that wherever you start, there is something more worthwhile you can personally accomplish in Singapore - is crucial to our nation building. We should not focus only on the top but extend opportunities to the vast majority, so that they will serve as a larger incubator for success stories. Recognising this, Government has been spending more on adult education to empower individuals further. Over the past few years, WDA has developed the Workforce Skills Qualifications (WSQ) system to train and qualify workers to work in related sectors such as Info-Comm Technology, Precision Engineering, Retail and Tourism. These qualifications have been developed in conjunction with industries and validated by employers. WSQ will also be developed in other growth sectors such as Creative Industries, Aerospace and Process Cluster industries. These qualifications will help existing workers in the industries to upgrade their skills, facilitate movement of workers into new industries that need manpower, and raise productivity through a better skilled workforce.
Talent from all sources
16. But we also have to accept two other facets in Singapore and the World today. First, to succeed as an economy built on high-innovation and value added-ness, relying on talent within Singapore alone will not suffice. Size is against us. A resident population of only 3.2 million cannot compete on its own with high-tech US with 300 million or with low-cost China and India of 1.3 and 1.1 billion respectively. We need to augment our workforce in areas where there are insufficient numbers of skills with foreign workers. Yesterday, my Ministry released the Singapore Workforce 2007 report. As of June 2007, employment has reached an all time high of 2.6 million. The unemployment rate has also dipped significantly to 1.7% in Sep 07, the lowest in nearly a decade. The labour market is getting tight and Singaporeans have benefited from the many jobs created in virtually every sector of the economy. Indeed, the resident labour force expanded by 4.2% a year over 2004-2006. But there are limits to the growth of our indigenous labour force. Thus, after over 2 years of growing very strongly, the growth of the resident labour force has now eased to 2.0% in 2007.
17. In the World Competitiveness Yearbook for 2007 released earlier this year, Singapore emerged as having the most competitive labour market. One of the underlying factors is that companies here have access to the manpower that they need. Indeed, this must be a key concern for any company operating here, especially in the current tight labour market. My Ministry has been closely monitoring the labour market and will be introducing several measures to ease the current manpower shortage.
18. To meet the growing demand for mid-skilled workers, companies will have greater access to S Pass holders. With effect from 1 January 2008, the S Pass quota will be increased from 15% to 25% for all sectors, so that companies can employ more S Pass holders, in lieu of Work Permit holders. Also, with the strong employment growth in Manufacturing and Services sectors, the Dependency Ceiling will be increased by 5% in each of these sectors to 65% and 50% respectively. These measures will enable businesses to have access to the manpower they need to support their growth, which in turn will create more jobs for Singaporeans.
Giving back to preserve society
19. The second aspect we must realistically confront is that as our society matures, it is inevitable that greater social stratification will occur. It has happened to all civilisations - even as we maintain social mobility based on meritocracy, and there will be a layer who will be better off for many generations. The US is a prime example, where the nouveau rich left a lasting legacy of wealth for generations after them. Not all are like Warren Buffet or Bill Gates that have donated their vast wealth to public good and do not believe in inherited wealth.
20. The rich in older societies like US have also recognised the importance of giving – not only to charities but also to other worthwhile causes such as education and research. They also give in terms of other aspects besides money. Their time and experience is equally important. For example one venture capitalist in our International Advisory Panel, had endowed a scholarship in a University in the US. One of the preconditions of the scholarship which he considered a privilege was in having an annual dinner with the recipient of his scholarship. He looked forward to this every year as he got to hear how this particular person was doing, mentoring him sometimes or just giving simple advise at other times. This enriched the lives of both the giver and receiver.
21. Each can give according to his means and out of charity. No one is too poor or rich to give. We must be careful not to approach this in a judgemental way as it will mar the spirit of altruism. Those who are better off can give their time and resources. That way, we preserve, promote and further improve our way of life in Singapore. What we have built as a nation in the last 40 odd years is precious and worth our time and giving to preserve.
Conclusion
22. In conclusion, I would like to extend my congratulations to the 6 finalists of the Entrepreneur of the Year award. I do not envy the job of the judges for I am sure that every one of the finalists is special and a winner. Each one of them deserves recognition for their entrepreneurial spirit and passion in business and life.
23. On that note, I wish you all a pleasant evening ahead.