Dr Diana Young

President

Association of Small and Medium Enterprises (ASME)

Distinguished Guests

Good Evening

I am happy to join you this evening for the ASME Millennium SME Day Banquet and the 3^rd Woman Entrepreneur of the Year Award Presentation Ceremony.

Over the past year, there have been many speeches and reports on the advent of the New Economy and the challenges as well as the opportunities which are emerging. I am sure that you are well acquainted with the characteristics of the New Economy. I would like therefore to just stress that our SMEs which want to grow and expand will now face not only domestic but also global competition. To have a global presence, SMEs will have to quickly examine and reinvent their business models. In considering their business strategies they will have to consider how to incorporate new technological advances. At the same time they have to strengthen their capacity to leverage on the use of the information technology and the Internet to advance their business interest.

While larger companies with more resources may enjoy certain advantages over SMEs, new ways of reaching customers made possible by technological improvements would have reduced some of the advantages which the larger companies now have. For example the use of the Internet is available to all companies and the limit to using it to maximum advantage is constrained only by one’s creativity and imagination.

Speed is the essence in the New Economy. Here SMEs can enjoy an advantage over larger firms. SMEs can be more nimble and respond faster to new trends and requirements. Well managed SMEs could make speedier decisions to seize new market opportunities.

This brings me to the critical issue of manpower development. The SME’s ability to compete successfully will depend not on capital and other resources for example raw materials, land and high-tech hardware and infrastructure, but more so on the quality of its employees. Are they resourceful, talented, and highly motivated to give their best to enhance the SMEs competitive edge in global competition? Are they being given adequate training and retraining to bring their skills and knowledge up todate and relevant to the needs of the highly competitive business environment? Our SMEs will need to have good human resources development strategies to develop their employees’ potential and talent to the fullest. This is imperative because the limited resources of SMEs mean that more is expected of employees at all levels. They must be empowered to take decisions and to be entrepreneurial in their approach. To get their employees to have the mindset to explore new frontiers, SMEs must allow for some risks and mistakes along the way so long as they are genuine ones and valuable experience and insights gained as a result. If their employees are not confident to try new ways and to do so quickly to meet the competition, it may be difficult for SMEs to seize the opportunities that emerge.

Training and retraining employees is an investment for the companies success. There is increasing evidence that investments in the workforce training are related to a company’s performance. Let me share with you the results of a study conducted by the American Society for Training and Development, (or ASTD for short). These study covers the training outcomes of 575 U.S based publicly traded firms during 1996, 1997 and 1998 and the ASTD found that companies which invested more in training per employee than the average company, improved their total stockholders’ return the following year. ASTD examined the average annual training expenditures of these 575 firms and found that those in the top half of training investment had an average total stockholders’ return of 37 percent in the following year, compared to firms in the bottom half who had an average return of only 20 per cent.

Besides developing their stock of local talents, our SMES should also win their share of global talent. This is imperative, as top globaltalent is scarce and becoming more and more vital to a company’s ability to thrive in the new competitive environment.

To recapitulate, human capital is crucial for a company’s development and growth in the New Economy. In this respect, the inauguration of the ASME Institute of Entrepreneurship Development (INSEAD) which will focus on human resource development in SMEs, augurs well for the SME sector in Singapore. I believe the Institute can make a significant difference to enhance our SMEs’ competitive edge.

Recognizing that the SMEs make an important contribution to Singapore’s competitiveness and economic growth and to help them gear up their capabilities, the Producitivity and Standard Board (PSB) launched the SME 21 Plan in January this year. SME21 is a 10 year strategic plan that outlines the challenges and opportunities facing SMEs in the New Economy. There are three strategic goals in the SME 21; the first is to groom innovative high-growth SMEs, next, to create a knowledge-based pro-enterprise environment and thirdly to develop productive SME sectors. Further several upgrading programmes have been drawn to meet the diverse needs of the SMEs at various stages of development. These programmes include the CEO Learning Circle which is a platform to enable sharing of information, knowledge and experiences among the leaders and senior management of the SMEs. It also enables a network of members to be developed to explore business opportunities together. Another programme is the SME Mentoring Scheme which provides opportunities for SMEs to seek advice from prominent business leaders to chart strategic decisions. I am pleased the SME21 has been very well received by the business community and would like to urge all SMEs to make the most of the SME21 initiatives to equip themselves for the New Economy.

To develop their employees’ skills and talents, SMEs can tap on a variety of workers development programmes including the Skills Redevelopment Programme (SRP), the National Skills Recognition System (NSRS) and the Strategic Manpower Conversion Programme (Infocom) Facilitator Scheme. Our SMEs should take full advantage of resources and facilities provided in the workers development programmes to continually skill and re-skill all their employees and to get them ready for the changing demands in the New Economy.

Finally, it is my pleasure to extend my heartiest congratulations and best wishes to ASME on its 14^th Anniversary. I am particularly happy to note the contributions of ASME in encouraging and recognising woman entrepreneurs. I would like to congratulate all the Woman Entrepreneur of the Year Award finalists for their achievements. My best wishes to Dr Diana Young, President of ASME and the 15^th Term Executive Council for a successful and rewarding year ahead.