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Speech at the SIM Interest Group Convention 2010

Mr Lee Yi Shyan, Minister of State for Trade , Industry and Manpower, Marina Mandarin Singapore

Skills, training and development
Mr Ronald Tan, Executive Director, SIM

Mr Zaqy Mohamed, GPC Chairman, MICA

Distinguished guests,

Ladies and gentlemen,

Introduction 

  1. Good morning. It is my pleasure to join you this morning at the 19th SIM Interest Group Convention.

    Punching Above our Weight
     
  2. The 19th Commonwealth Games just concluded in New Delhi two days ago. With 11 golds, 11 silvers and 9 bronze, Singapore ranked eighth in terms of gold medals won.
  3. I looked at the tally closer, and discovered that the countries ahead of us in the medal tally had populations at least 4.5 times our size. On a medal-per-capita basis, we would have ranked third in this Commonwealth Games. For a small population state, we have done exceptionally well. Congratulations to the sportsmen, sportswomen and the Singaporeans who rallied behind them.
  4. In many other areas, including economics, Singapore has also done spectacularly well. As a small city state, we enjoy one of the highest GDP (PPP) per capita in the world. In fact, based on IMF data, we were ranked the fourth highest in the world in 2009. MTI just announced our third quarter growth to be 10.3 per cent. This follows the second quarter's 19.6 per cent and first quarter's 16.9 per cent. We are on our way to achieving a full-year growth of 13 to 15 per cent.

    Singapore's Secrets of Success
     
  5. As I reflect on the Singapore's achievements thus far, and ponder over the driving force that would be needed to continue this trajectory, I would attribute our accomplishments to the way we develop our human resources. As MM Lee, who was then PM, once said of the SAF (Singapore Armed Forces): "What we lack in quantity, we shall make it up in quality". In short, we still can punch above our weight and build a potent force in the many areas we choose to excel in.
  6. If we go back in time to say, 20 years ago, looking at the economic structure and the nature of the industries then, we would quite easily conclude that our economy today is much more diversified, has greater depth, and possesses more complex know-how and advanced proprietary knowledge. Compared to 1990, Singapore Inc. in 2010 is better capitalised, more internationalised and sophisticated in their product and service offerings. Some are on their way to become Asian Multinationals.

    3 Basic Tenets for Sustainable Growth
     
  7. The question is: what will our economy be like in 2030, 20 years from now? For our economy to grow, I believe we have to work hard on 3 basic tenets: Productivity, Entrepreneurship and Internationalisation.

    Productivity-Driven Growth
     
  8. To drive growth in the next era, we will need to be productive in our ways and methods to create greater value. We can no longer depend solely on injection of more labour to raise production level and value. We have to think of ways to raise revenue and profit-per-head by leveraging on technologies and better-skilled workers.
  9. A national target of 2 to 3 per cent productivity growth rate has been set for the next 10 years. How are we going to achieve it? We are taking a holistic approach to drive productivity improvement at three levels: at the industry-, enterprise- and worker-levels.
  10. At the industry level, we will have to examine if we have the right industry structure. Are we operating in the right value chain? Do we have a complete value chain to create economy of scale and build up specialisation? Are there missing parts in our industry supply chain? Is there a need to restructure the industry cluster?
  11. At enterprise level, we ask if our companies have been modernising their production methods, material requirements planning (MRP) and IT systems. Are they well- or under-capitalised? Are our companies paying enough attention to technology exploitation and creating more intellectual properties?
  12. At the worker level, we ask if our workers possess the right type of skills to take on more complex and knowledge-intensive jobs? Are their skill-sets current and relevant to meet the needs and demands of fast-changing industries?
  13. We also question if the leaders of our SMEs are continually updating their management skills and know-how fast enough? Are they keeping themselves abreast of their industries’ best practices here and abroad? Are they sufficiently multi-skilled to be effective, all-rounded leaders?
  14. To guide and support our national drive for sustainable productivity growth, DPM Teo Chee Hean chairs the National Productivity and Continuing Education Council (NPCEC). The NPCEC will enhance the national infrastructure for industries and firms to adopt and implement productivity enhancement initiatives.

    Entrepreneurship – Ground up Innovation
     
  15. The second tenet is about Entrepreneurship. There are two aspects of entrepreneurship: the first is the ability to be entrepreneurial in problem-solving within an organisation, government departments and even in the society at large. An entrepreneurial society often finds creative solutions to resource and environmental constraints, and the problems they face. The second aspect is entrepreneurship as practised by entrepreneurs in creating start-ups, in building up new businesses and in the process, creating wealth and jobs.
  16. As our economy matures, as we compete in the first world league, we have to rely more on our own ingenuity, inventions and original know-how to create wealth, and differentiate our products and services from competition. I think a number of relatively small economies such as Switzerland, Sweden and Norway have shown that by focusing on intellectual property creation, they can create high-value products and services.
  17. We will therefore, do well if our businesses are entrepreneurial and innovative, and new ideas are created from ground up. This way, our economy does not need to rely on just a few key clusters and imported technologies, but is broad enough to have hundreds of engines fired up (the Chinese expression would be 百花齐放).

    Internationalisation – Growing Globally Competitive Companies
     
  18. The Singapore economy has done remarkably well over the past 20 years. Our economy has grown 3.3 times (1990 to 2009). Our stock of FDI abroad has increased almost 10-fold from S$38 billion in 1994 to nearly S$300 billion by end-2008.
  19. Besides our own competitiveness, the larger environment in which Singapore operates in has also been benign. International trade regime was open and liberalised. In more recent years, the gravity of growth has also shifted to Asia. What this means is that there are increasingly more opportunities for our businesses to grow much faster and larger. We are getting a lift from the rise of Asia.
  20. To capitalise on Asia's strong economic growth, our businesses must learn to recruit talents from different cultures and disciplines. Their managers must be savvy to manage multi-cultural and cross-disciplinary teams and yet, be able to build a common value system that is needed for any organisation to function effectively as one entity.
  21. Attracting foreign talent, assimilating them into teams, practising meritocracy in rewards and promotion, are but some of the challenges our business leaders will face in taking their businesses overseas. They either master the skills or forgo the growth opportunities presented right at their door steps.
  22. To internationalise, our companies must develop growth capabilities to commercialise their R&D and venture overseas to seek new markets. To this end, the Government has announced a $16.1 billion programme to be committed over the next five years to develop Singapore to be among the most research-intensive, innovative and entrepreneurial economies.
  23. The Government will also help our SMEs build other capabilities, such as business leadership. SPRING Singapore recently introduced two programmes – the Management Associate Partnership (MAP) to help high-growth SMEs to attract, develop and retain fresh talent; and the Enterprise Internship Programme (EIP) which provides short-term internships for local tertiary students to expose them to working environment in high-growth SMEs. The programmes aim to influence young entrepreneurial talents during their school days to consider SMEs as an attractive career choice.

    Growing Singapore's Human Capital
     
  24. For us to do well in all 3 tenets, we need to have the right type of human resources.
  25. This is why our education budget has been the second largest expenditure every year for many years. While formal education is important, life-long learning is even more critical, now that technology advancements are changing the kind of jobs we will create. Beyond a formal educational system, the Government has also committed S$2.5 billion over the next five years to build up our Continuing Education & Training (CET) infrastructure, including two CET campuses by 2013.
  26. By 2020, 50 per cent of our workforce is projected to possess at least a diploma (compared to 30 per cent in 2009); while 35 per cent are expected to hold degrees (up from 27 per cent in 2009). And among our younger workforce (those aged 25 to 44 years old), about half of them are projected to have degrees compared to 40 per cent today. We will have a better educated workforce. They will be better prepared for the jobs of tomorrow.
  27. With a rising proportion of our workforce possessing tertiary qualifications, the Government is stepping up its outreach effort to Professionals, Managers, Executives and Technicians (PMETs) to groom them into T-shaped professionals. This includes helping the PMETs to deepen their areas of expertise and equip them with a broad knowledge of horizontal functional skills (such as HR, sales, finance and project management).
  28. The development of professional continuous development courses will inject new specialised expertise while multiple skills-based progression pathways will complement the academic route through schools and the CET system. These measures will give all workers the opportunity to acquire greater proficiency, knowledge and expertise, from the most basic jobs to the most complex.

    Conclusion
     
  29. As we take stock of our current achievements and ponder over what the future might bring, we should be justifiably confident of a bright future ahead of us. Singapore has more resources than ever to shape our future. We are investing in R&D, education, workforce development and entrepreneurship.
  30. As HR practitioners, managers and supervisors, you carry the heavy responsibility of developing human resources needed for our future businesses. Our high performance teams of tomorrow will demonstrate attributes of being productivity-driven, entrepreneurial and market-savvy internationally.
  31. Can we do it? Yes, of course. Time and again, we have demonstrated resilience in the face of adversity and determination in overcoming challenges that come our way. This will not be an exception. Our best has yet to come.
  32. Thank you.