Economy

Singapore to strengthen global business hub status and help firms, workers compete globally, says Chan Chun Sing

SINGAPORE- Singapore will strengthen its status as a global business and technology hub to ensure a sustainable recovery out of the Covid-19 crisis, Minister for Trade and Industry Chan Chun Sing told the Parliament on Tuesday (March 2).

Responding to MPs on Tuesday (March 2) during the debate on his ministry’s budgets, Mr Chan said the plan to enhance Singapore’s value proposition within the class of the few high-quality, high-trust global business hubs is part of a three-pronged strategy aimed at turning the challenges of the post-Covid world into opportunities.

The other two strategies include entrenching Singapore as a critical and hard to replace node in global value chains, and building real and unique capabilities in Singaporean enterprises and workers so they can compete in a more globalised world.

Minister Chan stressed that the world is not returning to the pre-Covid era, which means that even if Singapore’s gross domestic product (GDP) returns to the pre-crisis levels quantitatively, it will be a different economy qualitatively.

Mr Liang Eng Hwa (Bukit Panjang) and Mr Desmond Choo (Tampines GRC) had asked how Singapore can stay competitive and relevant amid the disruptions. In response, Mr Chan noted that Singapore will need to create an environment where it can distinguish itself from others.

“We need to be a safe harbour for capital, talent and ideas in an uncertain world. Embrace new technologies to be the disruptor, rather than be the disrupted. Master digitalisation to transcend the constraints of our size and geographical location. Leverage our small size to pivot faster and more nimbly than our competitors,” he said.

To this end, the global hub strategy will need increased emphasis on clear, transparent, consistent and coherent legal and policy frameworks to mobilise capital, aggregate talent and protect intellectual property (IP).

Singapore will also need progressive rules to enable new business models to thrive, superior networks that give denser and more secure connections with the world, and a mix of local and global talent to serve global markets, he added.

The country needs to entrench critical parts of the research and development (R&D) value chains to incentivise businesses to include Singapore as part of their global innovation networks, even in times of crisis.

He said these are the reasons why the Government is investing heavily in the development of local talent, the attraction of global talent, and physical trade and digital connectivity, including free trade agreements and digital economy networks.

Also important is investing in R&D – from basic research to translational research for commercialisation – and the IP regime – from assessment to valuation and even arbitration. “We must get all these enablers right, to strengthen our position as a global business hub,” he said.

However, Mr Chan said the Government is also aware of the growing competition with the global focus moving from cost competitiveness to factors such as the speed to evolve new products and serve new markets, the resilience of supply chains and the quality of new ideas.

He said intellectual capital is fast overtaking physical and financial capital as the defining competitive yardstick.

More on this topic

That is why instead of just pursuing new ‘sunrise’ industries, Singapore also needs to pursue critical capabilities needed to anchor itself in every industry.

Giving the example of the semiconductor industry, he said that instead of worrying about Singapore’s global market share, the focus should be whether it has the access to the IP to produce the chips, and to build the machines that produce those chips.

Moving further upstream, the focus should be the pipeline and innovation of talent and talent networks to improve processes and their quality, so global companies will want to site their operations here, and create better jobs for locals.

He said the same questions apply to high-tech industries like biomedical, and info-communications, precision engineering and even to the manufacturing of surgical masks.

“Doing what others do at a cheaper price is a ‘red ocean strategy’. In other words, these are shark-infested waters, best avoided,” he said. “Producing things that others cannot is a ‘blue ocean strategy’. Here, opportunities abound, the competition is less. That’s where we want to be.”

Singapore must become an “exchange that adds value”, he noted. This could be in the form of providing complementary financing and legal services.

The third strategy involves deepening corporate capabilities and workers’ skills.

“Businesses must play their part to develop local talent and grow Singaporeans to take on leadership positions and Singaporeans must also be prepared to venture overseas to seize new growth opportunities,” he said.

Singapore must leverage on its existing strengths in traditional industries such as aerospace and manufacturing, while investing in emerging industries like digital services and technology.

At the same time the Government will continue to attract global companies and multinational corporations (MNCs), even as it focuses on nurturing local small and medium enterprise (SMEs) to be future global champions, he said.

In reply to Ms Jessica Tan’s (East Coast GRC) question on how to enable active participation of local businesses in emerging sectors, the minister highlighted the various schemes, such as the Scale-up SG and Enterprise Leadership Transformation programmes to help firms build deep he capabilities to compete globally.

To help them internationalise there are programmes such as the GlobalConnect @ SBF, SEA Manufacturing Alliance, and Market Readiness Assistance grants.

For smaller and micro-enterprises, the Government aims to provide them with shared and digital platforms to improve their productivity and efficiencies by accessing shared capabilities – from design to sales to management, he said.

“Covid is said to be the crisis of our generation. This can also be the opportunity of our generation to distinguish ourselves, and to lay the foundation for the next generation by winning new investments and creatingbetter jobs for this and future generations of Singaporeans,” he said.

More on this topic

Join ST’s Telegram channel here and get the latest breaking news delivered to you.

Source: Read Full Article