Singapore Government Press Release

Media Division, Ministry of Information & The Arts, #36-00, PSA Building, 460 Alexandra Road, Singapore 119963, Tel: 3757794/5

SPEECH BY MINISTER OF STATE FOR TRADE AND INDUSTRY AND COMMUNICATIONS, MR GOH CHEE WEE AT THE AMP-SNEF DIALOGUE WITH EMPLOYERS ON "PARTNERING IN TRAINING & RETRAINING AS A STRATEGY FOR GROWTH" AT 9.30 AM ON SATURDAY, 2 NOVEMBER 96, AT OMNI MARCO POLO HOTEL

Mr. Mohamed Alami Musa, Chairman of the Association of Muslim Professionals,

Mr. Stephen Lee, Chairman of the Singapore National Employers Federation,

Distinguished guests,

Ladies and Gentlemen

CHANGING BUSINESS CONDITIONS

1. Companies constantly evolve and re-align their business strategies with market conditions in an effort to stay relevant and profitable. Companies that do not are unlikely to remain in business for long.

2. Companies can either try to anticipate changes in market demand and capitalise on the new opportunities, or diversify into other markets and other products to reduce their exposure to downturns in any particular sector. Whatever the case, companies can ill-afford to stay complacent where they are until it is too late to react to demand shifts.

3. Let me give you an illustration from a dialogue session MTI had with some local companies recently. Traditionally, many of the small and medium manufacturing companies in Singapore supported the larger companies and MNCs that operate in Singapore. Furthermore, many of these SMEs depended on just a few MNC clients for the bulk of their business. Quite a number of them who continued operating in this mode have been hit by the recent downturn in the electronics industry.

4. On the other hand, many of the SMEs which adopted new business strategies such as regional expansion and diversification of markets, escaped the brunt of the slowdown. While others reported big declines in sales, these companies continued to receive orders from the region and for a wide range of products. Many are bucking the trend and expanding their manufacturing investments in Singapore.

QUALITY AS BUSINESS STRATEGY

5. While it is important to look outwards to new markets and opportunities, companies must not forget to also look inwards for growth. By this, I mean taking a fresh look at how the company can use its existing resources such as land, labour and capital more optimally and creatively. In particular, companies must innovate and improve their product quality, and leverage on creativity and quality as their differentiating factors in the competition for markets.

6. Let me elaborate. To many companies, price competitiveness determines business competitiveness. But price competitiveness need not mean the lowest price for a product or service. Customers are prepared to pay more if they perceive they are getting value for money.

7. As land and labour will remain scarce resources in Singapore, basic operating cost in Singapore is likely to remain high relative to other low cost countries. This translates into higher priced products. To remain competitive, our companies must raise productivity and move from producing low-value, mediocre-quality products, to higher-value, high-quality products.

INVESTMENT IN PEOPLE

8. It is easy to say that innovation and quality are important. But how do companies promote innovation and quality improvements? Anyone can buy equipment and machinery to make products. It is how well the equipment is used by workers that determines the output and productivity of the company and quality of the final products. Companies that consciously re-skill, train and re-train their workers to be receptive to new technologies and processes will do well in the long run.

9. The Government recognises the importance of training and is committed to working with industry to help upgrade their workforce. The basic training infrastructure is already in place. The Institute of Technical Education, and Polytechnics, for instance, provide technical training and continuing education for workers. ITE is also the lead institute in providing basic education in English literacy and Mathematics through the BEST and WISE programmes for adults.

10. At the industry level, training centres supported with grants from the Skills Development Fund have been set up to address the needs of specific sectors. The Singapore Hotel Association Training and Education Centre (SHATEC) and the Electronics Industry Training Centre are two good examples. Many of these centres play an active role in planning and supporting the training programmes of their members, especially the smaller companies which may not have the resources to mount their own training.

11. Partnerships between public agencies and successful businesses have allowed industry to benefit too. Examples include the Service Quality Centre of Singapore Airlines and the PSB-Festo Industrial Automation Centre. Such centres set up jointly by the public and private sector help the industry share resources more effectively. By tapping on to each other's strengths, this will lead to better synergy in skills upgrading for the entire workforce.

SKILLS DEVELOPMENT FUND

12. The Skills Development Fund, established in 1979, has been the key instrument used to support employers' training programmes. With a view to helping the unemployed and the economically inactive persons like housewives and retirees to enter the workforce, the scope of SDF has recently been expanded to benefit these categories of people. Currently, the annual disbursement of SDF is more than its collection. There has been concern that the SDF reserves will be depleted in due course. I would like to assure the employers and workers that funds will always be made available to support workers training. My Ministry is now looking into the long term funding requirement of SDF and will work out a funding mechanism to ensure that our workers training programmes will not be compromised.

TRAINING OF MALAY WORKERS

13. I am pleased to note that AMP has been very active in its efforts to upgrade the work skills of the Malay and Muslim community. Through partnerships with other organisations such as the SDF, NCB, PSB and ITE, AMP offers Malay and Muslim workers a wide range of educational and training courses. Since April 1994, the AMP Training Centre has trained more than 3,500 Malay and Muslim workers in BEST, WISE, PRIME, FAST FORWARD, and computer and office skills. It is worth noting that more than a quarter of those trained under the AMP were older workers aged 40 or more, compared with the national average of 16%.

14. In this fast changing and highly competitive global environment, the employment prospect and earning capacity of our Malay workers, like other Singaporean workers, depend very much on their skills level and their ability to absorb new knowledge and apply new technology. All the community self-help organisations should take upon themselves the responsibility and challenge of helping their members to upgrade their skills and enhance their employment prospect through training, retraining and continuing education.

CONCLUSION

15. I am pleased that the AMP and SNEF have taken the initiative to organise this dialogue. This will be a good opportunity for employers and leaders of the Malay and Muslim community to exchange views on how to forge effective partnership in the training and retraining of our workforce, taking into consideration the special needs and circumstances of the Community. I urge all participants to be frank and forthcoming in your discussions. I would also encourage AMP to continue to organise similar forum and other relevant programmes to help uplift the social and economic status of Malay and Muslim workers.

16. On this note, I wish all seminar participants a fruitful dialogue.

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