Singapore has survived and prospered by making ourselves relevant to the world. In the last century, we traded in spices; this century, in tin and rubber. After independence in 1965, we moved into simple manufacturing. Now, we are in wafer fabs, pharmaceuticals and Asian Currency Units. As the world economy changed, so did we.

The computer, the Internet and other IT-related advances have opened up an era of great changes as these new technologies work their way into all activities. It will take 30 to 50 years to exhaust the potential of IT, just as the discovery of the steam engine, electricity, telegraph and telephone took decades after they were first invented to create today’s industrial economies.

The spread of the PC gave rise to VisiCalc, one of the first spread-sheet programmes. The ability to easily calculate cash flows spawned an era of leveraged buy-outs and changed the shape of corporate America. At present, we are just witnessing the beginning of E-commerce. E-commerce will help companies go global. Amazon.com has not only created an entire business in on-line retailing, but by being the first mover, it has an advantage over newcomers. The big prizes will go to those who have that innovative imagination to capture the ideas and turn them into opportunities. To help such lively spirits, we have encouraged venture capital funds in Singapore to finance enterprising innovators whether from Singapore, the region or the wider world. As new technologies work their way into practical life, our entrepreneurs have the opportunities to make breakthroughs and take their companies global.

In an era when knowledge and innovation are critical factors for growth, the Americans have a head start. They have the right environment, the management support expertise, and the marketing networks across America and Europe to help companies with ideas go global. Successful innovators can list themselves on Nasdaq. The Europeans are catching up. The Japanese have changed, realising that their system of going for market share by relying on cheap capital has hit a wall. The Tokyo Stock Exchange is launching a new stock market section called MOTHERS (Market for The High-Growth and Emerging Stocks). Hong Kong is establishing its second board called the Growth Enterprise Market (GEM), aimed at high-tech companies. All these show how intense the competition will be as all entrepreneurs in all countries compete globally.

Three attributes are vital in this competition – entrepreneurship, innovation and management.

The first is the entrepreneurship to seek out new opportunities and to take calculated risks. Standing still is a sure way to extinction. After the crash of the region’s economies, recovery has been rapid in the past year. Our neighbours’ costs have dropped dramatically with their cheaper currencies. China has concluded its negotiations with the US to enter the WTO. It will liberalise its economy and become more competitive. Singapore companies will have to respond to this changed situation.

Enterprise 50 companies present here tonight are the best of our privately-held local enterprises. Out of many start-ups, only a few survive beyond the first years; fewer still prosper beyond the founder. Thirty five E50 companies have successfully gone public in the last five years, to raise more capital for growth. They have graduated from the E50 list. Many others have chosen to remain privately-held. Six companies are being honoured this year for making it to the E50 list for all the five years since this award started. Whichever route you take, your challenge is to ensure that your companies grow.

The second attribute, innovation, is what creates new products and processes that add value. To innovate is to think up new ideas backed by the discipline to develop those ideas into products and services that consumers want.

Creative Technology is a good example. Companies like Systems Access in banking software, and Strategic Technologies in advanced IT systems integration, are promising. Innovation is not confined to high-tech areas. Every business must constantly improve or be overtaken by its competitors. The defensive measures taken by Microsoft against Netscape and other companies show that no incumbent is safe in this age of rapid change. E50 companies can lead the way and serve as role models by the way you innovate and keep ahead of the competition.

The third factor is good management. To grow, company managements have to open up new markets and create new distribution channels. Companies must exploit the possibilities opened up by the Internet. Dell Computers has achieved phenomenal success by harnessing IT to provide ‘mass customisation’, reaching out to a wider market. The Internet allows Singapore companies to break out of our small domestic market. But it is more than a channel for service provision and market reach. The Internet offers new approaches to business and organisation. Dell’s ability to mass-customise requires a sophisticated supply chain management system. Increasingly, manufacturers are getting outside logistics providers to manage the supply of materials and to manufacture the products. YCH and Ascent Logistics are examples of local logistics providers that have undertaken these roles. It is not just enough to have a website to take orders and publish information. Company management must look at how intelligently they can use the Internet to re-engineer their business model.

Tapping the global market also requires good marketing to develop brand-names that have global resonance, like SIA and Raffles Hotel. With the proliferation of virtual and physical products and services, establishing a brand identity that customers trust is critical.

Increasingly, competition will be global. Intensifying competition has caused world-wide mergers among corporations in the last 3 years. Where mergers can bring synergies and economies of scale, Singapore companies should consolidate to compete better on the world stage. We must make our companies world class. It is for this reason that we have liberalised our banking sector. Our companies cannot succeed by relying on protection of our domestic market. The Japanese and Koreans with larger markets, have found that this is not the way forward. Our enterprises must seek out niche areas to compete in, focus and excel in those areas.

To compete globally you need top quality management that can handle complex operations. I notice when meeting top foreign and Singapore CEOs, that successful CEOs have wide visions, always seeking out new opportunities to expand their markets, ceaselessly searching for ways to improve competitiveness.

New Singapore enterprises typically start with a small team of family members, relatives and friends. For the enterprise to grow and flourish, it cannot remain family controlled. It needs talented researchers, engineers, marketers and managers. Talent is a key competitive resource that has to be identified and nurtured. Companies will have to actively seek out the right talent and have reward systems that anchor talent to the companies.

It may be timely for the organisers of the E50 award to look into fine-tuning the criteria to reflect the growing emphasis on knowledge-based activity. Then, 10 years from now, if we learn our lessons from our successes and our failures, many of the E50 award winners will show more enterprise, innovativeness and management capability.

Let me congratulate all the winners for this year’s E50 awards, as well as the 6 companies that have made it to the E50 list for the last 5 years.

Thank you.

2. --------------------------------