Distinguished Guests

Ladies and Gentlemen

Good Evening

CHANGING FACE OF GLOBAL COMPETITION

The global economy is recovering. There are encouraging signs of a sustained economic recovery, particularly in the US, where growth was particularly strong in the third quarter of 2003. Jobless claims in the US have also dropped to their lowest level since Jan 2001. This is good news for Singapore. We should benefit from stronger growth in the US which is our second largest trading partner. Singapore is now even better positioned to leverage on US economic recovery because of the US-Singapore FTA. I expect improvements to Singapore’s employment front to filter through next year once our own economic recovery is sustained.

2. However, Singapore will emerge from the economic downturn to an even more competitive economic environment. China is already broadening its economic role beyond that of the factory of the world. We are now seeing new Chinese entrepreneurs and companies emerging that could become global brands in time to come. Then there is the rise of India’s service economy. While parts of China like Guangdong have become the 21st century equivalent of Manchester in the Industrial Revolution, India is trying to become the world’s back-office. Both economies boast of skilled workforces who are willing to work for lower wages than those in the developed countries.

3. How should Singapore companies compete in this more difficult competitive environment? They need to create better value than their competitors.

PRODUCTIVITY AS ANOTHER DRIVER FOR VALUE-CREATION
4. A key strategy to create value is through increasing productivity. Take the example of Citibank’s Regional Cash Process Management Unit which has been in Singapore since 1992. Integration of its IT and people capabilities has helped to reduce its cash processing cost from more than $5 per transaction in 1998 to less than $1.50 today. Citibank chooses to stay in Singapore because of our highly productive workforce.

5. SPRING Singapore has done much over the years to upgrade the productivity of Singapore companies. By adopting SPRING’s People Developer framework, Yokogawa Electric Asia has halved the cost of materials over 12 months. Yokogawa’s presence in Singapore contributes some 300 jobs and contract manufacturing and services opportunities for over 25 small local enterprises.

6. The examples of Citibank and Yokogawa show how successful integration of people development can help achieve higher productivity and better business performance. Integrating people development activities to support business needs is the basis of the People Developer standard, which SPRING Singapore launched in 1998 to help organisations move up the people development ladder. Organisations that have embarked on the People Developer programme have reaped significant results.

7. The People Developer programme celebrates its fifth anniversary this year. To date, 432 organisations have been certified. Another 3,500 are working towards achieving the standard. More than a quarter of a million workers, or one in eight in the workforce, have been provided with skills upgrading and career development under the programme.

8. This evening, another 128 organisations will be recognised for their people development efforts. About half are organisations attaining People Developer status for the first time.

9. The other organisations receiving the People Developer plaques tonight are what are referred to as “renewals”. They have gone through cycles of review and introduced improvements to their people development activities. For these 'die-hard' People Developers, people development is an investment that pay dividends. Of noteworthy mention is my own Ministry. I mention this more with relief than arrogance, that we practice what we preach.

10. People development has certainly paid off for another local company, Learning Vision International. This local SME, which started out as a pre-school learning provider, is now a leading player in the growing childcare and early education industry. Through cycles of refinement in its people development strategies, Learning Vision has set its sights on expanding through franchising and going into the adult learning market.

PEOPLE EXCELLENCE AWARD
11. The People Excellence Award recognises the best of the best in people development. Two organisations will receive the award this year. The first winner is an organisation that processes almost 40,000 transactions a day, with a total value amounting to $38 billion. Handling such a high volume of transactions and so much money is an enormous responsibility. This organisation has to ensure that it hires, trains and empowers its staff to do the job well.

12. The other winner is a small organisation, with just 80 staff. It faced many constraints in developing its people. To overcome these constraints, it has creatively redesigned itself to provide horizontal, vertical and diagonal career development opportunities. It has also developed its own capabilities in training its people. I shall leave it to the organisers to tell you who these People Excellence Award winners are.

13. But people development is not just about raising productivity. Rather, people development should be at the heart of a philosophy that effective management of a company’s workforce or human capital is fundamental to its business success. Effective Human Capital Management should be integral to the company’s business model. Companies that manage their human capital well have systems and practices that effectively develop, engage and reward their workforce. The People Developer Programme is a step towards more effective human capital management in Singapore. However more needs to be done. This is where the new Singapore Workforce Development Agency, or WDA, can work together with SPRING to facilitate stronger human capital management by companies here. One of the key pillars of WDA’s work is to help Singapore companies upgrade their human capital management systems to better develop Singapore’s workforce. WDA aims to boost workforce capabilities by helping companies upgrade the skill levels of their employees. But training or skills upgrading alone is not sufficient to raise the potential and competitiveness of our workforce. Employees need to be effectively managed and developed within their corporate environments. This includes the right job designs, remuneration practices and career development systems. For instance, the current wage restructuring effort spearheaded by my ministry is about putting in place more flexible remuneration systems that respond more effectively to business conditions. Such a wage system is integral to a strong human capital management system that effectively motivates workers and engages their efforts through the ups and downs of a business cycle.

14. WDA will adopt a sectoral perspective to facilitating the implementation of stronger human capital management systems. There is no one size fits all HR model. Different sectors have different business needs and people development emphasis. WDA will work with companies in specific sectors to identify best HR practices suited to their industry needs, and facilitate the implementation by companies of stronger human capital management systems. This will be integral in developing a more competitive workforce in Singapore.

CONCLUSION
15. In conclusion, the government will continue to support the efforts of companies to develop their workforces and enhance their competitiveness. MOM and WDA will work with industry partners and agencies like SPRING to raise the levels of people development and human capital management in Singapore.

16. My heartiest congratulations to all the organisations which have achieved the People Developer standard and to the People Excellence Award winners this year! You are indeed role models for other organisations in Singapore to emulate.

17. Thank you and have a pleasant evening.