President, The Association of Small and Medium Enterprises

Distinguished guests

Ladies and gentlemen

Good evening

It gives me great pleasure to join you tonight to witness the signing of the Memorandum of Understanding (MOU) between the Association of Small and Medium Enterprises (ASME) and SPRING Singapore to launch the SME First Stop @ ASME. This SPRING-ASME initiative is clearly a testimony of the commitment of both the public and private sectors to support small and medium businesses in Singapore.

We are living in a world of rapid change. It is said that every year in the Internet era is like seven years in the era before ICT become pervasive. New technologies and new business models appear at breathtaking pace. The changes we can pack into one year these days are equivalent to changes seen every seven years or so in the recent past.

This relentless pace of change has made the business landscape more complex and unpredictable. An established history and well-known brand name are no longer guarantees of success. In 2001, Polaroid went bankrupt. The company that came to define instant photography was blindsided by the rapid rise of digital photography. Microsoft was slow to recognise the significance of the Internet and was caught napping by Netscape. Therefore, every enterprise has to work hard not just to cope with change, but to stay ahead of it.

To stay ahead in this new and very demanding environment, every business which aspires to stay around must have a business unit whose primary role is to anticipate change and to position the firm to benefit from such changes. Businesses must be able to recognise and exploit opportunities. Creating value through innovation is a key factor of success.

As a country, Singapore is no stranger to the constraints of size and limited resources. But, in many instances, we have been able to turn these factor disadvantages into advantage. One of the secrets of our success is a partnership approach. The tripartite collaboration among government, employers and workers has contributed to a harmonious business environment. Our public sector adopts a multi-agency approach in making policies and developing programmes. The same co-operative spirit is also evident in the interaction between the public and private sectors. All these have helped to sustain economic growth for a higher standard of living for our people. Although we are among the 20 smallest nations in the world in terms of land area, our Gross Domestic Product per person in 2001 was among the top 20 in the world! [Annex 1].

Like Singapore, SMEs can also leverage strategic partnerships to help them overcome their relative lack of resources. Experience tells us that these partnerships will enable SMEs to achieve greater levels of innovation and to expand into new markets and product segments when faced with a rapidly changing external environment. This is because firms obtain useful information from its network of strategic partners.

Alliances need not just be formal ones. Analysts have noticed that flexible, informal networks are just as beneficial. In Hong Kong, the various trade associations, and particularly the SME associations, have played a pivotal role in supporting the growth and development of SMEs. These associations provide valuable information on emerging challenges and opportunities, and help SMEs identify and prepare for these. They also survey the needs of the trade & SMEs, collect views and reflect these to the government.

We too have such partnerships and information channels here in Singapore. In fact, back in 1986, the founders of ASME were far-sighted enough to realise the critical importance of information exchange for SMEs’ survival and growth. Subsequent committees have continued with this good work. I am told that you have an array of networking sessions, seminars and forums to provide a platform for members to share information and insights.

The SME First Stop @ ASME will thus nicely complement your efforts thus far. Besides helping each other obtain information, you will now have a new partner to provide assistance at the convenience of a phone call. Not only will you get information on government assistance schemes and training programmes for local enterprises, there will also be first level diagnostic services to help companies identify areas for business improvement and match their needs to the programmes managed by various government agencies. Moreover, SME First Stop is not just for existing SMEs. It also serves as a first point of contact for aspiring entrepreneurs who want to know how the government can help them realise their business ideas.

This SME First Stop call centre will be the sixth in Singapore (Annex 2). Since the first call centre was set up in 1999, the number of calls has jumped ten-fold. To date, it has handled over 30,000 enquiries. These enquiries have enabled SPRING to build up a database comprising more than 8,000 Frequently Asked Questions (FAQs), with information on 60 government assistance programmes for SMEs. To meet the diverse and growing information needs of SMEs, SME First Stop is also constantly improving its database of business information. Today, not only does the First Stop tell you how to get a license or business permit in Singapore, it can also provide information on doing business overseas, for example in countries like India and Japan.

I am glad to note that ASME has also taken the initiative to partner with the academic sector. This evening, I am pleased to announce the launch of the Entrepreneurship OAR Programme. This is a collaborative effort undertaken by ASME, the National University of Singapore and the Nanyang Technological University. The aim is to provide advisory services, development know-how as well as research on industry trends to SMEs and would-be entrepreneurs to help them build distinctive capabilities, exploit and harness the latest technologies and knowledge. OAR stands for the three dimensions of the programme – Outreach, Assistance and Research. But I have no doubt that this programme will be a useful "oar" for SMEs to become productive and resilient enterprises that can ably navigate the choppy waters of the new economy.

Finally, let me share with you some good news. In the third quarter of 2002, overall productivity improved by 6.4% compared to 3^rd Quarter 2001 up from 5.8% in the second quarter. This is encouraging given the generally pessimistic economic news that we have been hearing in recent months. Productivity is a source of long-term economic growth and from which Singaporeans can justify our wage premiums. And these improvements in our productivity tell us that we have been effectively honing our capacity so that when the external environment improves, we will be well-placed to seize new economic opportunities.

In particular, our local SMEs have improved their productivity over the last decade. From 1990-2000, they have seen their value added per worker grew by approximately 4% every year. However, this is lower than the productivity growth achieved by the larger enterprises, which is more than 6%. Thus, local SMEs have tremendous scope to further improve their productivity.

We have an uphill, but critical, challenge ahead of us. SMEs are a very important component of our economy. Nine out of every 10 establishments in Singapore are SMEs and half of our workforce is employed by SMEs. Without a productive and viable SME sector, not only will our export-oriented sectors be bereft of competitive suppliers, one out of every two workers will be without a job! We must transform our local SMEs into vibrant and resilient companies that can become Singapore’s other engine of growth.

This evening, I wish to commend ASME and the various partners whose collaboration has made possible the establishment of SME First Stop at ASME, as well as the OAR Programme. I look forward to more of such tripartite partnerships among government, industry and academia. It is an excellent illustration of how we can combine our respective strengths and expertise to make Singapore a premier hub for entrepreneurship development.

I would also like to offer my warmest congratulations to members of ASME’s 17^th Executive Council whose installation will be held tonight. I wish all of you a bright new year, and every success in your endeavours.

Thank you.

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Annex 1

Source: World Economic Forum, Global Competitiveness Report 2002-2003.

Annex 2

The SME First Stop is a key strategy under SPRING Singapore’s broad-based approach to SME development. It adopts a multi-agency approach in integrating the government’s efforts to upgrade and develop the local enterprise sector. By providing SMEs with a first point of contact to answer their upgrading needs, the First Stop helps SMEs to swiftly navigate the bureaucratic maze.

The SME First Stop has a database of more than 8,000 FAQs covering assistance and training programmes developed by government agencies. Since 1999, SME First Stop has handled more than 30,000 enquiries from the SMEs. The areas of enquiries include business development, computerisation, eCommerce adoption, operations upgrading, financing and market access. We are constantly improving the First Stop database to include information on how to obtain licences and permits for businesses and information on doing business overseas in countries like India (more than 500 FAQs) and Japan (approx. 600 FAQs).

The First Stop offers two main types of services.

• Information Service – value added information pertaining to SME upgrading can be retrieved at the click of a button and sent to the callers instantaneously by e-mail or through facsimile directly from the CSOs’ consoles.
• Assistance-cum-Referral Services – first level company diagnostic services to help SMEs identify areas for business improvement and match their needs to the available programmes managed by different government agencies.

With the launch of First Stop @ ASME, there will be a total of 6 SME First Stop call centres, including the other five at SPRING Singapore, the Singapore Confederation of Industries (SCI), the Singapore Chinese Chamber of Commerce & Industry (SCCCI), the Singapore Malay Chamber of Commerce & Industry (SMCCI), and the Singapore Indian Chamber of Commerce & Industry (SICCI). SCI and SCCCI call centres were set up in year 2000, followed by SMCCI in 2001 and SICCI in 2002.

The call centres are physically located in the premises of each organisation. For SPRING Singapore, there will be two Customer Service Officers (CSOs) manning the hotline during office hours, i.e. from 8.30am to 5pm on Monday-Friday and from 8.30am to 1pm on Saturday. At the other satellite centres, one CSO each will man their hotlines during their operating hours.

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