(Delivered in Parliament on 5 February 2018)
The Enterprise Singapore Board Bill seeks to merge the operations of IES and SPRING into a single entity and also to transfer the fair trading functions of SPRING to the Competition Commission of Singapore.
The move to integrate the functions of SPRING and IES would facilitate the provision of domestic and international state support to enterprises in a co-ordinated fashion, in the manner of a one-stop-shop. Such a move may eliminate any potential for inter-agency overlap or rivalries and reduce confusion and time on the part of enterprises seeking government support. Moreover integrating all functions relating to fair trade under the new CCCS would have the same streamlining and rationalizing effect. Therefore this is a step in the right direction and I do not oppose the Bill. The work of supporting local enterprise is critical, so as to grow a third pillar to drive value and job creation for our economy, alongside MNCs and government-linked entities.
I would like to ask a few questions and make a few suggestions in relation to the future and important work of the Enterprise Singapore Board or Enterprise Singapore. Before I do so, I declare that I am the CEO of a research consultancy that works with a wide spectrum of end-clients including some SMEs.
Firstly, there is a strong case for the Enterprise Singapore to differentiate the account management approach it takes to enterprises according to whether an enterprise has limited growth potential and aspirations versus those with strong potential and ambitions.
The term SME is a convenient shorthand which we all use. However, there are often big differences between the S and the M. Aside from just size, there are differences in terms of the mind-set of the entrepreneur. Some SMEs are more focused on stability, have modest ambitions and may not want to become the next Facebook. But others are more focused on growth and should be encouraged and supported to become job creation and value creation engines for our economy.
For those enterprises may be small or mid-sized, not in a hurry to grow radically, largely domestically-oriented and/or are more focused on stability rather than growth, there is a case for supporting such enterprises with challenges like productivity, internationalization and business succession planning, so as to maintain jobs and grow wages. The approach taken to support these SMEs could be more oriented towards programme administration. But on top of that, some of those enterprises could be nudged using incentive schemes towards sunrise sectors within their own broad industry or in adjacent industries where they have core competences that can be leveraged.
On the other hand there are enterprises that have the potential to become regional or global champions, those with the ambition, drive and ability to become engines for job creation and value creation for our economy. These would need support in a more open-ended way. The appropriate approach to support such enterprises would be to provide more aggressive support in a more holistic, responsive and creative way. Such enterprises may need support in terms of human capital, recruiting management and expert talent. They may need support to obtain financing, where at some stages of growth some SMEs continue to experience an inability to raise sufficient financing from capital markets, VCs or banks. And they would need support in terms of internationalization and overseas market penetration, or even foreign direct investment to locate parts of their global business supply chain abroad while keeping critical headquarters functions in Singapore. The optimal approach for such enterprises would perhaps involve tapping on whole-of-government resources to enable them to resolve problems in their overseas operations or to introduce them to sources of funding or potential partners, to cite two examples.
Will Enterprise Singapore provide different approaches in this manner to support local enterprises based on their needs, abilities and aspirations? The different approaches that are called for may require separate divisions and separate operating styles in those divisions.
Secondly, would the integration lead to companies being serviced by a single account manager as in a single account management officer or account management team within Enterprise Singapore to avoid confusion and for maximum efficiency on the part of the company as well as state?
Thirdly and to take this further, does the government try to arrange a single account manager for each company for government support, across all agencies? That account manager could reside in different agencies, eg STB for tourism-related companies. Anecdotally it would appear that some companies may not be completely clear about whether there is a single government account manager along these lines.
Fourthly, how will the Enterprise Singapore’s role be differentiated from that of other economies agencies like the EDB and STB? And how will this differentiation be conveyed to the companies these agencies serve?
Lastly, I trust that one area the new Enterprise Singapore will actively look into is how to catalyse links between Singapore companies when they operate in international markets. We do see such links between some foreign companies when they move abroad, whereby such foreign companies cluster into specific areas or even buildings and business centres, share learnings and networks and thus shorten the learning curve and lessen the risk for one another. This is especially important in difficult markets, like Africa, which is probably the next and last frontier emerging market region. I would like to know what Enterprise Singapore plans to do on this issue.
Mr Speaker sir, local SMEs are responsible for half of GDP and over two thirds of jobs in our economy. The consolidation of most state support to local enterprises under one roof has the potential to create a powerful one stop shop to support our local enterprises in ways that are appropriate to their entrepreneurial trajectory, for maximum benefit to our economy.
The Workers’ Party supports this move to consolidate local enterprise support under Enterprise Singapore.
Local enterprises need to be a strong third pillar of our economy alongside MNCs and GLCs. Right now their share of value-added is much smaller than their share of jobs, implying that we need to move those capable and aspirational SMEs up the productivity ladder. At the apex, we need to groom a critical mass of local companies to become globally-competitive, with the centre of gravity and critical headquarters and other functions rooted in Singapore.