Speech at SBF-WDA Conference, “Gearing Towards An Innovative & Productive Company”

Mr Gan Kim Yong, Minister for Manpower , Mandarin Orchard Singapore, Mandarin Ballroom 3

Good morning.

      Introduction

1. It gives me great pleasure to join you this morning for this conference jointly organised by the Singapore Business Federation (SBF) and the Singapore Workforce Development Agency (WDA).
   
   Improving Productivity to Drive Sustainable Economic Growth
2. Our economy has rebounded exceptionally well from the recession. For the first half of this year, the Singapore economy grew by 17.9 per cent. Last week, advance estimates by the Ministry of Trade and Industry showed that the economy expanded by 10.3 per cent in the third quarter of 2010 compared to the same period a year ago. Our economy remains on track to achieve the overall growth forecast of 13 to 15 per cent for the whole of 2010.
3. Over the next decade, we aim to sustain economic growth of 3 to 5 per cent a year on average. This means that we have to grow our productivity by 2 to 3 per cent per annum over the same period, doubling or tripling the 1 per cent productivity growth which we achieved over the past 10 years. To galvanise efforts to achieve this target, the National Productivity and Continuing Education Council (NPCEC) has been set up to oversee and drive the national effort to boost productivity and transform our economy such that skills, innovation and productivity will be the main driver of our future growth.
   
   Boosting Productivity at the Industry, Enterprise and Worker Level
4. Making this significant leap in productivity will require a holistic and coordinated approach at all levels: at the industry-, enterprise- and worker-levels. At the industry level, we will have to fundamentally re-look the structure and operations of our key sectors, to review if we have the right industry set-up and the right value chain to capitalise on growth opportunities and build up capabilities for higher productivity. The NPCEC has identified 12 priority sectors to focus initial efforts on, including Construction, Manufacturing and Services like F&B and Retail.
5. Even as we seek to transform the macro-environmental landscape, we cannot forget that enterprises and workers are at the heart of our economy. At the enterprise level, the Government will support businesses that invest in skills and innovation through various efforts such as the Productivity and Innovation Credit, as well as the National Productivity Fund.
6. These initiatives are intended to help companies move towards higher value-added services and activities, ensuring that enterprises harness technology and create more knowledge capital, as well as to streamline their operations and optimise resource utilisation. With SMEs contributing to half of our GDP and employing 60% of our workforce, the critical role of the SMEs in our productivity drive cannot be over-emphasised. SMEs must take the lead in our national productivity drive, and create a conducive environment for innovation and productivity to flourish.
7. Last but not least, at the worker level, we need to ensure that our workers are equipped with the right skills to take on higher value-added and knowledge-intensive jobs. The Ministry of Manpower (MOM) and WDA will focus on harnessing the potential of every worker and develop a comprehensive national Continuing Education and Training (CET) system. Over the next five years, the Government will invest $2.5 billion in CET and reinforce the four key components of our CET system – skills standards, quality of training providers and trainers, career services and physical infrastructure. We will expand our programmes and reach out to help all levels of workers upgrade their capability and foster a culture of lifelong learning.
   
   Launch of the Innovation Improvement Initiative (i³) Programme
8. Today, I am pleased to announce the launch of the Innovation Improvement Initiative Programme (or i³ in short), as part of SBF and WDA’s efforts to jointly enhance Singapore companies’ capabilities in innovation and productivity. The i³ is a project-based programme designed to jumpstart productivity improvement through a series of initiatives to coach companies on innovation and productivity concepts, the use of diagnostic tools and intuitive hands-on projects. WDA will fund up to 70% of the course fees. It is projected that WDA will invest up to $1 million over two years for this programme.
9. Each company will send a team, comprising top management as well as line operators to be coached and mentored by productivity experts. The participation of these leaders, managers and supervisors is key, as they are best placed to initiate change in their companies and to empower workers to play a role in improving productivity at the operations level. The companies that participate in the i³ programme will be guided to facilitate problem-solving and put in place best practices to improve productivity and innovation.
10. I understand that the take-up rate has been encouraging and companies such as Tat Petroleum, Hoo Huat Engineering, Heatec Jietong Holdings and Mun Siong Engineering have signed up for the i³ programme. For example, Heatec Jietong, a leading manufacturer of heat exchangers and piping systems, has adopted the Japanese improvement or “kaizen” methodology in their work processes. Haetec has implemented 18 kaizen ideas and these improvements include designing a machine to automate equipment washing and installing wall-mounted racks to better organise tools. Heatec has signed up for the i³ programme to further enhance the company’s competitiveness. It is a good role model for the industry as it strives for continuous improvement. Companies who have signed up for the programme will be mentored by Master Black Belt or Black Belt consultants from Motorola University, a leader in corporate education and globally renowned for its Six Sigma business productivity expertise.
    
    Conclusion
11. The launch of the i³ programme signifies a strong commitment by the Government to reach out to the business community in our productivity drive, through strategic partners such as the SBF. SBF will actively reach out to companies and encourage them to improve productivity through skills and innovation. Given their strong membership of over 15,000 companies, SBF will be an important bridge between government and businesses to help realise sustainable economic growth for Singapore.
12. I hope that the conference will inspire all of you here today to leverage on the i³ initiative to achieve higher productivity and competitiveness. Your commitment will help us transform our economy. On this note, let me wish you a fruitful session ahead. Thank you.