Mr DeSimone, Chairman and CEO 3M Corporation

Ladies and Gentlemen

I am delighted to join all of you this morning for the official opening of 3M Singapore’s new Innovation Centre.

3M started its first operations in Singapore a long time ago in 1966, primarily as a marketing and technical support centre for Asia. In the last few years, 3M has increased its activities in Singapore quantitatively and qualitatively. We are pleased that the current 3M management also sees Singapore as a manufacturing and innovation hub to serve a rapidly-growing region.

This Woodlands site houses 3M’s facility for the production of Microflex Circuits. Opened in March 1999, this world-class facility started operations with the largest initial built-up area in 3M’s history. With investment of S$400 million over 5 years, it is also the third and latest addition to 3M’s microflex manufacturing operations. This shows 3M’s confidence in Singapore.

It is this confidence which led 3M to locate an Innovation Centre here. The former Customer Technical Centre has been transformed into an Innovation Centre. From a five-man team in 1994, the centre now has more than 60 researchers, specialists and engineers. A total of S$22 million has been invested in the facility which consists of 15 laboratories covering a wide range of products including healthcare, traffic control, abrasives and electronics.

3M’s new Innovation Centre is in line with EDB’s Industry 21 plan to make Singapore a vibrant global hub for knowledge-driven industries. 3M is an excellent example of how knowledge-based corporations thrive on innovation and technology.

3M has a remarkable record of product and process innovation. Innovation is at the core of 3M’s success. Besides hundreds of ongoing R&D projects, 3M has more than 30 cutting-edge development programmes known as "Pacing Plus Programs" to exploit high growth opportunities and change the basis of competition to 3M’s advantage.

Over the years, 3M has been able to keep up its innovative spirit. No wonder it is one of America’s most admired companies. We have all heard the story of how 3M’s researcher Art Fry invented Post-it Notes which we can’t imagine life without today. 3M has a 15% rule, where scientists are encouraged to take 15% of their time off to pursue new ideas, either within or outside their own area of work. In my own Ministry, Trade & Industry, Saturday mornings are set aside for the same purpose, whenever possible. While we do not expect to come out with new ideas or products for the world markets, we hope that the Saturday gatherings will improve the policies that MTI formulates and the services that we offer to the public. 3M has made innovation a requirement for its business units. It has a corporate goal to derive 30% of its sales each year from products introduced within the last four years, and 10% of its sales from products which are less than one year old. These explicit targets create a special 3M culture that makes inventiveness its highest virtue.

We hope that 3M’s culture will rub off on us in Singapore. In the face of new global challenges, we need an innovative spirit to survive. We are now embarked as a comprehensive national effort to encourage creativity and entrepreneurship in Singapore. While the Government cannot order this to happen, the Government can set goals, re-orientate the young, lay good infrastructure and provide a conducive environment, the way 3M’s management does.

In terms of R&D infrastructure, the Singapore Government has helped to finance 13 research institutes covering a range of technology areas including data storage, wireless communications, microelectronics and manufacturing technology. Not only have these research institutes done good work, they have also produced experienced research scientists and engineers which are also available to industry.

For a knowledge-based economy to prosper, we must protect intellectual property. To this end, Singapore has implemented a number of measures to safeguard inventions. The rise in the number of patents filed reflects a better improved IPR environment. We achieved full compliance with WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement one year in advance of the 2000 deadline. We have strengthened our Intellectual Property legal framework and made it one of the best in Asia.

In addition to R&D and legal protection, we have also made more funds available for innovation work. Two examples are the Innovation Development Scheme (IDS) and the Research Incentive Scheme for Companies (RISC), both of which are familiar to 3M. Its Regional Medical Products Laboratory, Microflex Design Centre and Applications Development Lab, and Regional Centre for the Analysis and Characterisation of Materials are all supported by the National Science & Technology Board (NSTB) and the EDB. While the support itself is not big, it does send a positive signal of the Government’s attitude towards such efforts.

We hope that local Singapore companies will learn from excellent companies like 3M. To facilitate this learning, I am pleased to announce today an enhancement of the Local Industry Upgrading Programme (LIUP) for innovation activities. Under this new enhancement, MNCs are incentivized to work with local companies on product and process innovation. MNCs would then be able to outsource some of their R&D work. For our local companies, this would help them to develop their own R&D capabilities. I hope many companies will avail themselves of the new scheme.

The opening of this Innovation Centre in the New Millennium is an important milestone in our effort to transform Singapore into a knowledge-based economy. I am sure 3M’s good work in Singapore will inspire many others to become more innovative.

Please join me in congratulating the owners, managers and employees of 3M on the opening of its new Innovation Centre.

_________________