Dr Ron Sim,

Ladies and Gentlemen,

I am delighted to join all of you this morning for the official opening ceremony of OSIM’s new Headquarters Building. OSIM has grown rapidly over the past decade, from being a trading company selling household items, to becoming an Asian household name for healthy lifestyle products. It now has 300 outlets in Asia, the Middle East and North America. This was no easy achievement. Much was due to the vision, perseverance and hard work of Dr Ron Sim, the Chairman and CEO of OSIM. We need more of Dr Sim’s entrepreneurial spirit in Singapore. His resourcefulness and determination saw the company through difficult times in the 1980s, and transformed it into the shining success it is today.

For the next phase of Singapore’s economic development, we need an enterprise ecosystem which throws up many companies like OSIM. In the past, we relied mainly on foreign inward investment for our economic growth. Much of our local talent was dedicated to establishing the foundations of a newly-independent Singapore like the SAF, the Civil Service and the HDB. It was also easier to attract foreign investment then because there was less competition. Those days are gone. We are now facing much stiffer competition from awakening giants like China and India. They have huge, relatively inexpensive human resources and rapidly growing domestic markets. Also, compared to Northeast Asia, Southeast Asia is going through a difficult period politically and, as a region, has become less attractive to foreign investment.

To meet these challenges, we have to reposition ourselves. To exploit new opportunities – and there are many – we need many more local entrepreneurs who operate internationally. We should build on our good reputation in the world for reliability, integrity and competence. The Singapore brand name is a major asset we own in common.

OSIM is an excellent example of a Singapore company that has successfully expanded far afield in the healthy lifestyle product market. Despite the current slowdown, sales have grown and it plans to increase by three times or more its worldwide point-of-sales network by 2008, and hopes to join the billion-dollar club then.

To help grow more companies like OSIM – what we call International Singapore Companies (or ISCs) – the Trade Development Board has been restructured to focus on international enterprise. It will be renamed "International Enterprise Singapore" or I. E. Singapore. Its mission will be to help local companies grow and internationalise. I.E. Singapore will be the primary economic agency overseeing the spreading of our external wing. It will offer a wide range of services in Singapore and overseas to help companies shorten their learning curve and make the right connections, including providing market information, doing feasibility studies and finding overseas partners. I.E. Singapore will take over from the Productivity and Standards Board the responsibility of helping our Small and Medium Enterprises (SMEs) expand overseas. As part of this effort, I.E. Singapore will promote Singapore as an SME-hub by attracting enterprises from the US, EU, Japan and other countries to be based here, so that they can collaborate with Singapore’s ISCs to venture into the region. These new functions go beyond TDB’s traditional role in promoting trade.

As we progress from simple value adding to original value creation, innovation and R&D become very important. OSIM’s success today is largely due to constant innovation in product development and astute management of the OSIM brand. OSIM started by selling other people’s products. Now it conceptualises its own products, with much of the design, engineering and development done by in-house creative talent, while the actual manufacturing is outsourced. For Singapore companies to succeed in international markets, they need innovative ideas and approaches that distinguish them from their competitors.

The Productivity and Standards Board (PSB) has been given the responsibility to promote innovation, in addition to its responsibilities for productivity and standards. What we want to improve in the end is our Total Factor Productivity, for which innovation is critical. Total Factor Productivity goes beyond labour productivity and capital productivity. Improvement in Total Factor Productivity is the result of doing many innovative things, big and small, including R&D, improvements in management and morale, reorganization of the workplace and better branding.

The new PSB will play a lead role in raising the productivity of the domestic sector, which comprises almost two-thirds of total business establishments in Singapore and employs half of the total workforce but contributes only one-third of total value added in our economy. To express better its new mission, PSB will be renamed the Standards, Productivity and Innovation Board, or SPRING Singapore in short. SPRING stands for Standards, Productivity and Innovation for Growth. SPRING Singapore will take over from PSB the responsibility to spearhead the National Productivity Movement.

A key factor behind OSIM’s success as an innovator is the importance it places on R&D. Without a lively R&D environment in Singapore, we cannot be an innovation-driven society. We must be good at the creation and exploitation of intellectual property.

The promotion of Science, Technology and Research will become crucial to all our efforts. To support this, the National Science and Technology Board has been restructured and renamed the Agency for Science, Technology and Research (or A*STAR). A*STAR will give greater emphasis to upstream science, engineering and biomedical research. However, upstream research must still have a strong economic focus. A*STAR’s new mission is to foster world-class scientific research and nurture talent for a vibrant knowledge-based Singapore. It will place particular emphasis on nurturing local R&D talent, creating intellectual capital and exploiting intellectual property generated by its research institutes. A*STAR will play a critical role in the next phase of our economic development.

The reorganisation of these three statutory boards – I.E. Singapore, SPRING Singapore and A*STAR – are therefore opening exciting new chapters for MTI and will help us remake Singapore for the 21^st century – growing our external wing, fostering innovation and total productivity growth, and deepening our capabilities in Science, Technology and Research. Working with other economic agencies and the private sector, they will strengthen the foundations for a new Singapore economy.

OSIM is part of this new Singapore economy. I would like to extend my warmest congratulations to Dr Sim and OSIM on the opening of this new HQ building and the award of OSIM’s Business Headquarters status. I would also like to thank OSIM for sharing this celebration with the less fortunate, by way of a generous contribution to the Children’s Cancer Foundation.

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