Committee of Supply – Head V (Ministry of Trade and Industry)

The Chairman: Head V, Ministry of Trade and Industry. Mr Liang Eng Hwa.

Recovery and the Next Bound of Growth

Mr Liang Eng Hwa (Bukit Panjang): Mr Chairman, I beg to move, "That the total sum to be allocated for Head V of the Estimates be reduced by $100".

Our economic agencies have risen up to the occasion during this pandemic crisis. Besides the daunting healthcare challenges, we were also faced with multiple stresses on the economic front and also to ensure that supplies continue to flow into Singapore, especially essential items and necessities.

For a small country with limited local resources, it is no small feat that we can continue to secure the adequate supplies needed, especially during the intense months when borders were closed and many countries restricted exports.

The economy went into a nose dive with the steepest contraction recorded in the second quarter of 2020 at -12.6% and an overall contraction of -5.4% for the whole of 2020.

Armed with strong fiscal support and moratorium measures, the economic agencies went into overdrive mode to swiftly get these measures out to the businesses. It was timely enough to save many businesses and jobs and, importantly, prevent economic scarring.

Sir, here, I would like to commend the great work by the officers from Enterprise Singapore (ESG)—much of what they have done may not be visible to the public. I remember sending many emails to them, appeals and requests for assistance from our residents who were deeply impacted by the crisis. The ESG officers were always sympathetic and helpful to each of these requests and would duly close the loop with the residents and businesses with support, help and advice.

I would like to mention a few names, actually, of some of the ESG officers who have helped me: Joyce Khoo, Ms Ong Wee Yang, Lynette Liu, Johnny Teo, to name a few, and of course, the hardworking Assistant CE, Ms Chew Mok Lee, among others.

During the most turbulent period of the crisis, I know that the ESG and MTI teams have gone out of the way to tap on their global networks to secure food items and other essential supplies. These are real operations and I can imagine the responsibilities and pressure on the shoulders of the MTI and ESG officers during that period of time.

This pandemic underscores the importance of resilience and diversification for our sources of essential supplies and the need for a robust stockpile policy.

COVID-19 also reminded us that we will still need to maintain a small but substantial part of manufacturing capabilities locally, which can be quickly scaled up in times of need. These may well be low value-add production during peacetime but can suddenly become important critical resources in an unexpected crisis.

Of course, all these resilience-related contingent provisions would add further costs to Government. It will also have structural implications to the overall economy and the cost of doing businesses here. I hope that MTI can monitor this closely and look at how we can holistically optimise the overall costs.

Sir, the other economic agency that has risen up to the occasion is EDB. In 2020, despite being the year of the global pandemic, EDB was able to attract investment commitments of $17.2 billion, which, when these projects are fully implemented, will create 19,000 new jobs. This is against a backdrop of falling global foreign direct investment (FDI) flows.

A case in point is Singapore's continued ability to attract foreign tech giants to set up here in 2020—such as the likes of ByteDance, Amazon, Twitter, Zoom, Tencent, among others. Other exciting and value-creating investments brought in last year include the Hyundai Motor Group Innovation Center, Siemens' Advance Manufacturing Transformation Center, Tata's Digital Acceleration Centre, and others.

EBD was able to sell Singapore as an open, trusted and connected hub that comes with a skilled talent pool, well-endowed capital, and a vibrant and innovative enterprise eco-system.

Together with our vibrant local enterprises and Singapore being a premiere financial centre, these new investments all add up to strengthening our position as a global-Asia node.

We must build non-substitutable or sticky connectivity so as to maintain our competitive edge as a critical node. So, beside best-in-class physical connectivity, we also need to develop and enhance other centres-of-excellence such as digital connectivity, trade connectivity—even regulatory connectivity.

Can I ask the Minister for an update as to how we are enhancing Singapore's connectivity to the world.

Sir, while attracting FDIs and enhancing our position as a global-Asia node helps generate growth, the other important engine of growth is in the development of our enterprises.

In almost every Budget, there will be focuses and sizeable allocations targeted at helping businesses to transform, to build capabilities and to innovate. In more recent Budgets, we have also seen increased support in areas such as digitalisation and in developing sustainability as a competitive advantage.

We need to grow our local large enterprises (LLEs) into industry champions and also help promising medium-size companies grow to become LLEs.

Catalysing a wide range of capital to help businesses transform and to scale is also one of the key enablers laid out in Budget 2021.

Some of the risk-sharing arrangements with market providers of capital includes the Venture Debt Programme for high-growth enterprises, co-funding the transformation of mature enterprises under the Emerging Technology Programme or the Local Enterprises Funding Platform where the Government and Temasek Holdings will co-invest $500 million each.

Can I ask for an update from the Minister as to how are we growing our local champions and how are we revving up the pace of transformation to achieve size and scale?

Also, has COVID-19 set us back on our internationalisation momentum?

Given the various structural shifts as described in the Budget Statement, how will Singapore operate in the new global and regional landscape and stay competitive and relevant?

One particular structural shift is in the reconfigured global supply chain. How can Singapore companies seize these opportunities in the reordering and reorganisation of the global supply chain and be plugged into the critical parts of the global networks?

Sir, our economic response to this crisis has to go beyond just counter-cyclical measures. We need to take bold steps to seize new opportunities, invest in new capabilities and be well positioned for the next bound of growth.

Question proposed.

12.30 pm

Business Hub of Asia

Ms Foo Mee Har (West Coast): Chairman, COVID-19 has accelerated the bifurcation of global trade and exposed the vulnerabilities in inter-connected supply chains. As countries and companies rebuild business networks, relocate value chains and continue to de-couple, Singapore must work to stay relevant and position itself for the shifting economic landscape. How has Singapore performed as an investment destination in the midst of the pandemic and what strategies is the Government pursuing to distinguish ourselves as a business hub?

Singapore must redefine our competitive edge by pivoting towards innovation as a driver of growth and a vibrant digital economy. So, I would like to ask: what progress have we made to nurture a strong start-up eco-system and how does Singapore compare to other start-up eco-systems in Asia and across the world? Singapore is recognised globally for its leadership in the field of intellectual property protection and scientific research. So, are we attracting our fair share of deep-tech start-ups in search of robust IP protection?

To support the development of the digital economy, it is critical to offer corporations access to top-tech talent. How is Singapore doing in our efforts to develop tech talent from our Institutes of Higher Learning as well as programmes, such as TechSkills Accelerator? How successful has the Tech.Pass been in attracting established tech entrepreneurs, leaders or technical experts from around the world to come to Singapore, where they can nurture disruptive innovation?

Singapore’s handling of the COVID-19 pandemic has also shown the world once again what we are capable of as a people and as a nation. In a fragmented world where trust is in short supply, this is the time that Singapore is well-positioned to capitalise on the premium for quality, resilience and neutrality, all of which play to Singapore’s strengths. This is an opportune time for Singapore to capitalise on our brand.

Sir, I would like to ask what initiatives have EDB and other agencies undertaken to step up the marketing of Singapore as a leading global business hub, recognised for its quality infrastructure, safety, stability, connectedness and accessibility? Can we work towards a Singapore certification framework that provides Singapore companies, especially our SMEs, a quality certification for their products and services, similar to the Swiss Label and the Brand K initiatives in Switzerland and Korea respectively? Second cut.

Supporting Local Corporates

Chairman, whilst it is understandable that existing broad-based fiscal support cannot be sustained indefinitely, we should be cognisant that companies need time to recover. Any premature withdrawal of support may undo the good work already invested to keep them afloat during the pandemic.

According to an SBF National Business Survey, only 38% of total transactions were paid on time, and almost 50% of late payments were above 30 days past due, on top of the credit terms already offered. Therefore, it is critical to time the withdrawal of loan schemes carefully, including the Temporary Bridging Loan Programme (TBLP) and SME Working Capital Loan, in order to ensure the much-needed relief in cash flows does not vanish suddenly.

The Government has sent a strong signal that it will back firms, support firms, that are ready to transform in this Budget. I especially welcome the Local Enterprises Funding Platform to support large local enterprises from the more traditional sectors with $1 billion in Government and Temasek funding. Companies should seize this additional funding to embark on transformation to reinvent and rejuvenate their business model.

In addition to Temasek, the Government should also consider the participation of other established private equity firms for more parties to contribute to the development of these local corporates. Besides funding, we should support large local firms to access R&D in their pivot to new growth areas as well as higher value-added services and offerings. They can also benefit from support in forging new partnerships locally as well as internationally.

Sir, as Singapore embarks on the next phase of expansion of the manufacturing sector by attracting market-leading manufacturing firms to anchor their operations in Singapore – the hon Liang Eng Hwa mentioned a few – I call on the Government to ensure that this ambition achieves a wider impact so that these high-value or advanced manufacturing firms catalyse an entire generation of supporting local industries, all of whom may grow in tandem. How can the Government spur partnerships with local corporations and the development of an integrated value chain that includes sub-contractors and service providers in Singapore, as well as opportunities to venture overseas together?

Recovery and Longer Term Trends

Mr Desmond Choo (Tampines): Mr Chairman, the most vexing story of the COVID-19 pandemic has been that economies have to deal with damaging cyclical forces from the virus and accelerated structural changes. Ironically, while the blueprint to manage the virus-related fall-out is perhaps seemingly clearer, that of the large structural forces are less understood. It has also questioned Singapore’s trade hub status.

COVID-19 precipitated protectionism as countries critically re-examine the resiliency of their supply chains. Many vulnerabilities from long supply chains were unraveled. Companies would now need to rebalance their supply chains to manage their risks. As a node for global supply chains, Singapore will now need to re-examine how it can stay competitive.

There is an added layer of complexity from the US-China tensions. Decisions on how and where to source for products and services are now mired in a web of trade tensions.

Air travel and, consequently, aviation and hospitality sectors will change fundamentally. The ease of online collaboration would significantly alter our MICE activities. This has disrupted the eco-system of commercial activities that we had built up over time. Our hub strategy would need to adapt to the new trade climate. I would like to ask the Minister: how will Singapore operate amidst the cyclical challenges and ensure our competitive edge in the longer term? What are the global re-opening opportunities that we must seize now?

Larger companies with more resources are better prepared to deal with such changes. Things are much less rosy for the SMEs. The changes will unduly affect them as they have less cash to manage disruptions. The Jobs Support Scheme (JSS) was a key support for these companies. But with JSS winding down except for the hard-hit sectors, SMEs will need added relief support through grants and loans. As they are preoccupied with surviving the crisis, investment in capex is likely to take a backseat. This makes longer term survivability ominous. I suggest that we can enhance our enterprise development grant to help SMEs with their capex investment.

SMEs must now cope with loan moratoriums and COVID-19-related measures coming to an end. There will be SMEs that have yet to see a material rebound in fortunes. I would like to ask the Ministry if it can continue to provide support for them through extension of loan payments or grant support. Amongst these SMEs could be good young start-ups. Losing such innovative SMEs could mean setting back our entrepreneurship scene.

Late last year, Facebook announced a small businesses programme that supported companies with cash and ad credits. The latter help companies to drive business. There is value for us to pursue more of such programmes with our companies to help them drive better revenue growth.

Navigating Fractured Globalisation

Prof Hoon Hian Teck (Nominated Member): Chairman, Singapore's economic transformation since independence has relied on integration into the global economy. That reliance came at a time when trade barriers that were set up during the Great Depression in the 1930s – a period of prolonged slump – were being dismantled. Hence, Singapore’s economic growth from the 1960s onwards rode on growing world trade. Now, COVID-19, which has adversely affected both the advanced and emerging economies, can tend to cause countries to adopt inward-looking protectionist policies. The question: how do we navigate a world of potentially more fractured globalisation? MTI, no doubt, must have devoted much time and energy to think about how the Singapore economy can still take advantage of economic openness to generate good jobs for our residents.

Nevertheless, let me share some thoughts. The answer, to answer this question, I believe, is that we should create dynamic comparative advantage as a small open innovation-driven economy. Despite the challenges we face, this is the way to achieve the required productivity growth to support an economy that creates good jobs with good pay. There are three, to my mind, potential sources of comparative advantage in the current circumstances.

First, this comparative advantage could come through a so-called “home market” effect. Let me explain. The demand for Singapore’s goods comes from both domestic sources as well as external sources. A feature of the COVID-19 shock is that, broadly speaking, it affects two sectors unevenly – an affected sector, which includes aviation, aerospace and tourism, and a non-contact-intensive sector. There is a decline in demand for goods produced by the affected sector. How do we boost domestic demand for goods produced by the non-contact-intensive sector? A key factor here is the degree of substitution between the goods produced by the affected sector and the goods produced by the non-contact-intensive sector. Because of COVID-19, Singapore residents are unable to travel overseas for holidays. In normal times, our local businesses would find it difficult to capture a large portion of the spending of Singapore residents because they would prefer to travel overseas for their holidays. Now that it is difficult to travel overseas.

There is, therefore, a natural advantage presented to our local entrepreneurs. This potentially means a larger domestic demand for the goods and services of our local businesses. If the trade association and chambers representing these local businesses can facilitate the organisation and marketing to reach these residents, we can lower the average cost of supplying the goods from the non-contact-intensive sector. These businesses can then charge a lower price as the whole industry enjoys economies of scale. Even when COVID-19 is over, the experience of offering products to suit local customers’ tastes could well enable our innovators running these local firms to reach foreign customers as well.

Second, our large human capital base and investment in digital infrastructure can enable our entrepreneurs to reach overseas markets. Although there are fewer tourists walking down the streets to purchase from local firms, digitalisation might enable them to find an online platform to reach overseas customers who would have taken their holidays in Singapore in the absence of the pandemic. An example is to create a virtual experience for these foreign customers. Local firms can also build upon the digital platform to establish a business presence as part of the global value chain to supply intermediate products to foreign customers. In this regard, let me acknowledge the advantages that Digital Economy Agreements, already established with Australia, New Zealand and Chile, confer to our local firms an advantage in their internationalisation efforts.

Third, our investment in urban design to make Singapore environmentally-friendly with a low carbon footprint can facilitate research and development (R&D) in clean technology. Innovative firms engaged in R&D in clean technology will find it more profitable to undertake risky investments if it can find a sufficiently large market for its products. As Singapore makes a commitment to adopt a whole-of-society approach to create an environmentally sustainable place to live, work and play in, this creates a larger demand for capital goods that embody this clean technology. Having tested their products in the local Singapore market, these innovative firms can then potentially export such capital goods to the rest of the world. In sum, there are still potential opportunities, despite the circumstances, to ride on global opportunities to grow.

In conclusion, despite fractured globalisation, spurring innovative activities to ultimately reach overseas markets can enable the Singapore economy to achieve the required productivity growth to support good jobs with good pay.

12.45 pm

Calibrating Incentives to MNCs and SMEs

Mr Leon Perera (Aljunied): Mr Chairman, Singapore provides amongst other things tax incentives for MNCs to set up regional headquarters and other investments because they contribute towards our economy. SMEs, which are the backbone of our economy, making up 72% of employment and 44% of added nominal value in 2019, also received support. But the pandemic has given us a sobering reminder that SMEs play on an unequal footing because of their smaller balance sheets and brand value. MNC investment is often attracted by incentive packages that include tax incentives and other forms of incentivisation. These are tied to economic targets like total business spending, fixed asset investment and headcount.

As I argued in my Budget speech, can incentive packages for MNCs include an additional tier of incentive if the MNCs work with local SMEs in executing the investment project. This additional tier can be offered very selectively where there are good local SMEs that can be partners to MNCs and it should be meant as a nudge and encouragement, not mandate or dicta.

There are schemes like PACT which reward MNC and SME collaboration, just like there were schemes like LIUP in the past. But, however, SMEs really grown into regional and global players helped by these schemes.

In other countries in the region, MNCs are sometimes required to have a certain percentage of local equity. I am not advocating that at this point as it may make us too uncompetitive to attract MNCs.

Last but not least, do our economic agencies regularly audit these schemes to weigh the cost in terms of cash outlay and so on, versus the benefit in terms of job creation and economic multipliers?

The Chairman: Ms Jessica Tan.

Ms Jessica Tan Soon Neo (East Coast): Mr Chairman, can I take my four cuts together?

The Chairman: Yes, please.

Global-Asia Node

Ms Jessica Tan Soon Neo: Mr Chairman, the manufacturing sector contributes 21% of Singapore’s GDP and employs over 450,000 people. With the growing importance of and the economic shift to Asia, Singapore is well positioned to be a more resilient and advanced manufacturing base in Asia for the world.

Many leading global companies have located their operations in Singapore. Singapore’s Smart Industry Readiness Index (SIRI) catalysed the transformation of companies in the manufacturing sector around the three pillars of Industry 4.0 – around process, technology and organisation. The Assessment Matrix has helped companies start, scale and sustain their Industry 4.0 transformation. How is Singapore continuing to promote Industry 4.0 adoption?

Against the backdrop of the current COVID-10 pandemic, how will Singapore continue to be an attractive manufacturing base and move up the value chain for these companies? And how will Singapore continue to instill confidence for companies to build on their investments in production, headquarters, R&D and supply chain manufacturing functions in Singapore and to make Singapore the Asian node for their operations in the region?

What is the future of our manufacturing sector? And how can Singapore ensure that our supply chain remains resilient in a post COVID-19 world?

Emerging Sectors

The world is becoming more complex and there is greater inter-relationship across sectors and adjacent opportunities.

We are seeing the growing importance of Asia as an engine for growth. Digitalisation is accelerating and the growth of the digital economy has gained greater momentum with the COVID-19 pandemic. The disruptions have also highlighted the importance of resilience in our supply chain. With climate change and the drive for sustainability, there is increased emphasis on sustainable products and services.

With these trends, what are the growth and/or emerging sectors for Singapore? How are we developing these sectors? How can we enable active participation of our local businesses in these sectors?

Internationalisation

Mr Chairman, accessing new markets can be challenging for any company, large or small. With a small domestic market, increasing digitalisation and competition, Singapore companies cannot ignore the need to look beyond Singapore to grow.

Budget 2021 has introduced the new Local Enterprises Funding Platform to support large local enterprises and enhanced the Venture Debt Programme to help SMEs access necessary capital to expand overseas and to seize opportunities.

Can Minister share how more local businesses can be supported to internationalise, grow and build capabilities to compete globally? Apart from capital and funding support, these companies need to develop their talent. And beyond talent, what support is available for our Singapore companies to access systems and platforms, know-how and networks to enter new markets. Similar to how Alibaba’s Tmall has enabled global startups access the China e-commerce market. How can Trade Associations and Chambers of Commerce or other bodies be encouraged to play a stronger role in helping businesses overcome internationalisation challenges?

Enterprise Development

Mr Chairman, with digitalisation and the structural changes in industries, can Minister provide an update on the progress of businesses transformation of companies especially SMEs in the adoption of digital solutions to improve productivity in the face of manpower and cashflow challenges? How can we encourage more SMEs to transform and adopt digital solutions to improve productivity in the face of manpower and cashflow challenges? What support will the Government provide to SMEs intending to digitalise?

With the many different schemes to support businesses, understandably, there is also a myriad of support schemes. So, how can Government support schemes be streamlined and made more accessible for businesses, especially our SMEs?

A key part of enterprise development is access to talent. How is Singapore developing our pipeline of local tech talent? What resources are being directed towards improving the training and upskilling of local SME workers for technology-related roles and innovation?

Returns from Past RIE Expenditures

Mr Leong Mun Wai (Non-Constituency Member): Mr Chairman, we are fortunate that Singapore has adequate financial resources and is willing to think ahead by investing in RIE or Research, Innovation and Enterprise to future-proof our society and economy. Between 2005 and 2020, we have spent a total of $55 billion on RIE, an amount larger than the drawdown of reserves to fight the COVID-19 pandemic. The next RIE budget for 2021 to 2025 calls for another $25 billion of spending.

The budget also calls for $2.2 billion to be spent on "talent development", including postgraduate scholarships, but the majority of the postgraduate students, researchers and faculty members are foreigners.

At the NUS' Centre for Quantum Technologies established in 2007, 74% of its researchers and postgraduate students are foreigners in 2019, a decade after its establishment. What does that say about our progress in building up our domestic research talent pool over the last two decades?

In our opinion, it is premature to increase research expenditure significantly when we still lack a sizeable domestic pool of research talent.

Also, besides looking at the research component of the RIE budget, the Government should also conduct a review of the allocation of resources used to promote innovation and enterprise.

From my humble experience as a venture capitalist, new ventures cannot be effectively promoted by the Government using co-funding. This is because the limited number of public servants would not be able to assess the potential of thousands of venture ideas emerging at any one time. It is better to let the private sector do the job.

A better alternative is to provide tax credit to activate access capital in our system to fund the ventures and increase taxes on passive capital that do not. In this way the capital can be channeled into proper use to help us to become a regional venture capital hub for both Singaporean and foreign ventures.

The Government should confine and expand its role as a facilitator by helping local ventures through its procurement policies, which my colleague Hazel Poa has brought up in her speech, through buying local products to boost their credibility and through providing facilities for testing and commercialisation for many more companies apart from the selective few presently.

Hence we urge the Government to relook at the allocation of resources to Research, Innovation and Enterprise in order to achieve better outcomes for Singaporeans and for our the economy.

Spending Wisely on National R&D

Assoc Prof Jamus Jerome Lim (Sengkang): Chairman, I wish to declare that I work at a research-oriented Institution of Higher Learning.

In 2017, our national expenditure on research and expenditure, as a share of national output, amounted to a low shy of 2%. This amount is actually below the global average of 2.3% and, perhaps, more tellingly, for a nation that seeks to be a knowledge-based economy is also significantly below the amounts that other technology-seeking economies have devoted. The United States, for example, spends 2.8%, Japan 3.2%, Korea 4.6% and Israel 4.8%.

Our companies are also decidedly old economy. Singapore has few firms for which intangible assets make up the majority of the balance sheet. Even one of the top Singapore-based Internet and E-commerce firms, SEA Limited, reports that only about 1% of its assets are intangible.

There is solid evidence that R&D investments can improve and be a boost to productivity via catalytic effects on innovation. The need to boost productivity is especially poignant in light of Singapore's poor productivity performance and in effect that has been collaborated study after study. It can also pay for itself since heightened productivity would itself grow out our GDP pie.

Increases in national expenditure appropriately directed for R&D is, therefore, an evidently attractive avenue for not just boosting productivity and, therefore, growth but also helping companies and our people stay at the forefront of advances in the digital economy and other artificial intelligence revolution, green technologies, modern manufacturing and biotech innovations.

Civil servants responsible for disbursing grant support for firms confidentially share that they often face difficulty in identifying and allocating grant financing. They add that local businesses remain reluctant to fully embrace R&D, even where financial support is available. It is critical that we convince as many local firms as possible, especially those in the SME sector, that their continued success hinges on cultivating and embedding an innovative mindset.

Just as pertinent, we have to be sensitive to the transition process and channel R&D funds away from certain industries that our economy has traditionally relied on such as petrochemicals, wholesale trading or back-office finance that we deem to be inconsistent with our 21st century economic model. Instead, we can re-direct R&D grants and subsidies toward the sunrise industries that the Government has already identified.

Finally, I would caution this House that our notion of sectors deemed worthy R&D financing for innovation need not be wedded to solely high tech industries such as innovation and communications technology or biopharmaceuticals, but also much more traditional goods and services.

1.00 pm

The vast majority of our government grants via A*STAR or IMDA, even when not explicitly earmarked for technology start-ups, are still heavily directed towards supporting business digitalisation. While important, innovation may occur in unexpected ways. For example, we can look at the continued refinement of modern Singapore cuisine, developing new techniques for sustainable landscaping and energy efficient building design, pioneering new elderly care methodologies, or identifying new tools to support advanced manufacturing, as Minister Heng has already emphasised.

More generally, candidate projects with the highest probability of success are seldom best identified via tightly defined conditions, which speaks to the need for us to be more accommodating in our assessment methods and more liberal in our qualification criteria for Government R&D grants. Under what conditions will MTI be willing to target and increase an R&D expenditure to bring us closer to the spending for technology driven economies? This amount, to be funded from public and private sources, will ostensibly be directed toward a broad range of innovative activity across the economy and especially in existing SMEs with innovative activity.

Incoming Investments and Job Opportunities

Mr Abdul Samad (Nominated Member): Chairman, in a Straits Times article on 21 Jan 2021, MTI declared that Singapore managed to attract about $17.2 billion in fixed asset investments in 2020, despite weathering its worst recession since Independence as a result of the COVID-19 pandemic. Such achievements must have come through great efforts by the working staff of luring and convincing investors to invest in Singapore. Well done to the staff in MTI!

We were also made known that such investments, when completed, would lead to the creation of more than 19,000 new high quality jobs over the next five years. We note that close to a quarter of the new jobs would be digital roles, such as cloud developers, software engineers and cybersecurity specialists.

Chairman, this news brings hope – hope of a Singaporean worker who looks forward to seizing opportunities for such high value-added jobs. In fact, union leaders are curious to know how our locals can seize such job opportunities. Such good jobs, we hope, will be able to lure the younger generation of ITE and Polytechnic graduates into the workforce early or even narrow the unemployment of our locals over the years ahead.

From the good news requires actions to get ready the workforce for type of skills and knowledge required. On this point, I would like to ask how the Labour Movement and our training associations like NTUC Learning Hub can collaborate with Government agencies like EDB and other key partners, to bridge the skillset gaps to ensure that we prepare our workers to seize the job opportunities and allow Singaporeans to form the core of the company workforce.

Information and knowledge actions will certainly give us more lead way to identify workers and training institutions to help prepare our workers. On behalf of fellow leaders from NTUC, we look forward to working closely with MTI and EDB to prepare our Singaporean workers to seize such high value-added jobs when the companies come on board. We want every worker to aspire for such jobs, as every worker should aspire to for better job, better work prospects, for a better life for themselves and their families.

The Chairman: Ms Janet Ang.

Ms Janet Ang (Nominated Member): Mr Chairman, Sir, I would like to take both cuts together.

The Chairman: Yes, please.

Renewed Social Compact in the Workplace

Ms Janet Ang: Mr Chairman, let me start by recollecting a meeting I had organised for a IBM Senior Vice President to call on the then Singapore EDB MD, Mr Lim Swee Say. During the meeting, Mr Lim asked a question which stuck in my head for good, and it goes something like this: “How can Singapore stay relevant to IBM’s growth ambitions and global strategies?”

After the meeting, the IBM SVP shared with me that no country has ever framed a question like that before! IBM was surely impressed, to say the least. That year, IBM established its first disk drive manufacturing facility in ASEAN, right here in Singapore. Was that a coincidence? And this track record persists even in COVID-19 year, as hon Member Liang Eng Hwa has shared earlier.

The Singapore EDB is an amazing marketing machinery in selling the advantages of Singapore and “bidding” for jobs for Singaporeans. Attracting the MNCs to our shores amidst competitive landscape is a feat in itself but what makes Singapore stand out is that Singapore delivers on our promise; a) with the Singaporean workers who are skilled, hardworking and principled; b) with Singapore companies that have the capabilities to be plugged into the MNC’s global eco-system; c) with our efficient government systems and non-corrupt business practices; and d) with Singapore being the open and global city that is attractive to the best of global expertise and diversity of brain power.

This has been what makes Singapore, a small economy, break out from the rest.

In recent times, there have been rumblings of “foreigners taking our jobs”. I believe that now is the time for stakeholders to work on a renewed social compact. And as I said in my Budget debate speech, I have highlighted two points: 29 TACs including SBF have signed a joint statement in support of fair hiring and employment practices. Businesses must play their part to have fair practice in the workplace, and develop local talent and leadership. For MTI and EDB, in their engagement with the MNCs to lean-in on the value of the Singapore talent as the foundation of their business success.

According to a McKinsey Study, post-COVID-19, we will see “remote work” on the rise. In other words, companies do not need to bring the foreign talents on-shore as they can distribute the work off-shore. Can the Minister share the Government’s strategy to maintain or even enhance our hub status? Or do we have an alternative strategy?

For me, I believe that a new social compact in the workplace is one of the critical factors.

For my fellow Singaporean PMETS, we need to acknowledge that foreign talents do complement Singapore talents. Asking “who has moved my cheese?” will not help. Having the skills to do the job is but minimum expectation.

According to a February 2021 Singapore Human Resource Institute study, employers increasingly look for critical attributes such as a growth mindset, a risk-taking attitude and a drive to excel. Our Singapore workforce and us as parents to the next generation workforce, must “wake up” from our unrealistic expectations, seize the day and bounce back with our classic Singaporean “Can Do” attitude. Appreciate the Minister's response.

Tech, People and Capital for SMEs

Budget 2021 has the critical elements of Tech + Skills + Capital + Vision for Singapore to emerge stronger. I would like to focus on the Capital part of the equation in particular, Temasek and the Singapore Government’s co-investment to set up a new $1 billion "Local Enterprises Funding Platform". This Fund will invest in LLEs and support their growth. I am sure that the selected LLEs will benefit not only from the additional capital injected by this fund but will also benefit from Temasek’s leadership development, mentoring, and access to networks and tools, which will further enable the LLEs to accelerate their becoming potential local champions.

I have a few questions and one idea for the Minister with regards this purposeful proposition.

One, that criteria must the LLE fulfil for the company to be eligible to be a “target” investment for this Fund?

Two, assuming that there will be an over-whelming response from the LLEs, how will Temasek and MTI decide which LLEs to fund? For example, sector specific, green future and so on.

Three, will this "Local Enterprises Funding Platform" initiative be extended to support SMEs as well?

In Singapore, we have many SMEs which may be "stuck" due to lack of capital, lack of access to tools and networks especially for going beyond Singapore, and lack of leadership and expert capabilities needed to breakout and stand out. SMEs do hire more than 70% of our workforce. If we can lift our SMEs, it will be a lift for the Singapore workforce. I would like to make a plug for SMEs who are not quite your start-up, or your LLEs by size, to be given an opportunity to be a part of this initiative.

And, finally, I would like to offer an idea – perhaps, there is an opportunity for the LLEs to play "Queen Bee", to bring along the SMEs in their value-chain, and be funded as a portfolio of companies in a value-chain, under this initiative. This could empower the players to hunt in a pack, and thereby strengthening overall competitiveness.

Helping SMEs Attract Local Talent

Mr Gerald Giam Yean Song (Aljunied): Mr Chairman, I declare that I am a director of a local SME providing technology consulting services. SMEs face many challenges in attracting and retaining local talent. There is sometimes a bias against working for SMEs in favour of MNCs, GLCs or the Civil Service. Many SMEs try their best to attract local talent, for example, by offering competitive salaries, but with mixed results.

We need to help our SMEs attract more local talent if we are to nurture globally competitive, homegrown firms. I propose three ways to help them achieve this.

First, in both the classroom and at home, teachers and parents could encourage our young people to broaden their career aspirations and widen their definition of success. Not every child needs to aspire to be a doctor, lawyer, banker or government scholar. Many SMEs provide incredible opportunities to learn different skills and take on multiple roles.

Second, there needs to be a rebranding of SMEs as employers of choice. We have many local enterprises made good. We could do more to profile SMEs both in the media, and also as business case studies within classrooms.

Third, Enterprise Singapore could assist more SME managers to adopt modern management practices. They could be provided easier access to certified executive coaches who can provide one-to-one guidance on improving their management approaches. I believe all these could help our local SMEs become more attractive workplaces for Singaporeans to work and enlarge the SMEs' talent pool.

Innovation and Enterprise Development

Mr Shawn Huang Wei Zhong (Jurong): Mr Chairman, SMEs have the potential to significantly boost economic growth. It is known that the productivity gap between large companies and SMEs can vary in several multitudes depending on the industry.

As such, helping to raise the productivity of SMEs can be a worthwhile endeavour given the potential upside and the ability to drive economic growth within the country. SMEs are better positioned to integrate proven practices and technologies. And they also have more agility and are at less risk in testing and adopting new technologies, especially technologies and processes of large companies. At the same time, SMEs can be more innovative. As SMEs are usually unencumbered by large systems and outdated strategies, they are often able to rethink established practices and cut through traditional industry boundaries.

However, the lack of resources and access to talent continues to pose implementation challenges for SMEs. Limited awareness of digital solutions, limited access to digital talent, and limited capital to invest in digital technologies can hinder the uptake of these technologies by SMEs.

Governments have started expanding their productivity programmes toward digital adoption and started dedicated programs to help SMEs deploy more productive digital processes.

One good example we could learn from is the Mittelstand 4.0 centres of excellence in Germany. An example would be the first 26 AI competence centers, staffed with 20 AI coaches to train 1,000 SMEs each year.

As shared in a McKinsey report, in Finland, the Ministry of Economic Affairs and Employment and several technology industries have launched an accelerator dedicated to helping firms deploy digital solutions. The accelerator offers six-month programmes for companies that have already piloted AI application on products and services. About 15 Finnish companies provide funding and technical support to the accelerator. Then, these organisations would work with service providers, start-ups, academia in short sprints to help deploy the AI applications or the deliverables. The first batch of companies from accelerator, for example, would work together to then deploy speech recognition technologies.

1.15 pm

Some companies progress by fusing physical and cyber realms. One such local company come to my mind. Leon, the founder of a local watch company, BOLDR, has a global franchise. They are amongst the first to build a mechanical watch with digital functions. With two full-time employees, Yong Hong and Jaspo, they design, build and supply watches using Sellita and ETA movements. Watch enthusiasts would know that these are very high quality movements.

As the name of the company represents – BOLDR – we too can help SMEs tackle challenges and develop their capability to expand further.

To secure Singapore's future we must be able to build an innovative eco-system that has the ability to grow and compete globally.

As such, I would like to seek the Minister for Trade and Industry's update on how the Government is supporting enterprises to commercialise and capture value from innovative ideas generated from R&D how we can help our enterprises grow innovation capabilities; how local enterprises can be supported to grow and build capabilities to compete globally; and finally, how to support and transform and seize opportunities to emerge stronger.

Igniting More SME Collaborations

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Mr Chairman, Sir, as no one single economic entity can be self sufficient and survive in a silo – just as humans require some form of interaction with one another – every business needs to collaborate and coexist. I hence would like to ask the Ministry on the existing take-up rate of Partnership for Capability Transformation (PACT) grants and how many of the applicants involve companies collaborating across industry verticals.

PACT should be the first port of call grant for all enterprises to encourage companies to collaborate and achieve greater economies of scale. Government funding will also be maximised as it impacts two or more businesses and their employees.

Due to our small domestic economy base, it is crucial that we foster a collaborative and partnership mindset amongst companies. Such joint venture projects and collaborations can be preludes to deeper partnerships such as actual mergers and acquisitions as company founders, directors and employees develop trust and relationships with each other.

This is crucial in our efforts to scale up SMEs. This complements the Deputy Prime Minister's announcement of a joint Government investment with Temasek Holdings to invest in our LLEs as it provides a pipeline of SMEs that could grow to become LLEs or be combined with LLEs via mergers and acquisitions.

Supporting Tourism Sector Recovery

Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Chairman, in the past year, industry players in the tourism sector have made many changes to survive in this challenging climate. But the hard truth remains that we are a small market and we need to be realistic about the current lower appetite for international leisure travel.

Nonetheless, we should use the crisis as an opportunity to drive innovation and improve productivity and boost Singapore's profile as a safe, secure, efficient and exciting destination. Can we continue to enhance infrastructural and product development in the industry to ensure that Singaporeans want to holiday at home and that we can compete in international markets? We can also plan to run more safe and secure major events designed to assist in the global recovery from COVID-19.

With that in mind, what are the short to long-term plans for the tourism sector? How can we help the financing structures for tourism SMEs and hotels and to integrate new digital capabilities? How can we invest efficiently in the sector to keep it afloat while keeping losses minimal? Are there plans to partner with other regional tourism boards in other companies and corporates to give the sector a much-needed boost in the post-COVID-19 environment?

Mr Derrick Goh (Nee Soon): Mr Chairman, may I take cuts (u) and (v) together?

The Chairman: Yes, please.

Supporting SMEs in the Longer Term

Mr Derrick Goh: Sir, SMEs have given feedback that they have been very grateful for the relief measures such as the Jobs Support Scheme (JSS). One SME restaurant chain owner mentioned to me about how JSS helped her business stay afloat and survive the most difficult period last year, allowing the SME to retain over 50 staff to reach the stage now where the business is seeing some improvement.

As the economic recovery will take longer, some business segments will experience a flatter K-shape recovery. The key measures of help from the Resilience Package such as the JSS and Government loan schemes such as the Temporary Bridging Loan Programme, will end by 30 September 2021. What are other non-financial support will be provided to help boost SME services to help them ride out this pandemic situation?

SMEs are doing what they can to do more business, so in place of subsidies, will the Government be planning to bring forward contracts to support the demand for SME services?

As border controls and travel restrictions will take a lot longer to normalise, given the pandemic situation outside of Singapore, this means that the tourism industry will have to bear longer the low demand for their services. Given this, what other plans does the Government have in place for the tourism sector beyond the Resilience Package?

Many of our residents will not have the opportunity to travel and have been keen to explore more of Singapore, as observed from the experience of the last December holidays. Will the Minister consider accelerating domestic tourism for our citizens to further explore Singapore's nature and arts and culture scene to help our local businesses?

Helping More SMEs to Transform

Mr Chairman, on item (v). We have been striving to help strengthen our SME businesses. It is a known fact that they are often faced by challenges, such as the lack of business size and scale, and as a result, face challenges in adopting technology solutions that could generally be costly on a standalone basis, but could perhaps be a lot more affordable if adopted across a segment of the industry.

Taking an example from SMEs in the restaurant business, we are seeing an increased use of e-menus. However, the use of e-ordering solutions and analytics is way lower even though it helps productivity and can even help supplement the lack of manpower and wait staff.

SME entrepreneurs want to focus on their business and many are not tech savvy. They want to see more help – from an economic standpoint of technology service as a platform. So, for one, they will not see the incurrence of capital cost, since grants generally do not cover 100% of the initiative; and secondly, they want to minimise risk since they do not know if the benefits of the technology solution will pay off.

Given situations like this, what will the Government do more of and differently beyond providing grants to better encourage and guide our enterprises to adopt technology and digital solutions to improve productivity?

From a trade associations and chambers of commerce (TACs) standpoint, they also have a role to play, given their influence through their long-standing relationships with their members. Can the Minister explain what the progress has been in this space so far, and if TACs can play a part to help aggregate the demand for such information and communications technology (ICT) needs to further complement the efforts of the Government to deliver more economical solutions for the respective segments in their industries?

The Chairman: Minister Chan.

The Minister for Trade and Industry (Mr Chan Chun Sing): Mr Chairman, let me first thank all the Members for their questions and many useful suggestions. I would also like to thank the many Members who have spoken kind words on the work that MTI has done over the last one year.

Mr Chairman, over the past week, much has been discussed about how we should or should not use our reserves, and how we can and we should – and we want to – do many more things for various groups in our society.

However, we must not lose sight that first and foremost, we need to earn our keep – for this and future generations – under the shadow of the COVID-19 pandemic. We are still trying to get out of the most serious recession since Independence.

We are not returning to a pre-COVID-19 world. Even if our gross domestic product (GDP) returns to a pre-COVID-19 level, quantitatively, we will have a qualitatively different economy then.

The share of sectors and industries will be different. The types of products and services that we produce and trade with the world will be different. The skillsets of our people required to make a living will be different. We must start now to build this new economy.

I will be frank. There are many challenges and downside risks. Geopolitical tensions remain a concern. Technological disruptions are accelerating. The COVID-19 virus is mutating. The rollout of vaccines across the world is uneven and this will complicate countries' recovery from the pandemic.

All countries have spent an extraordinary amount of fiscal resources to stabilise their economy. Many, if not all of them, will contest for fiscal revenue, possibly leading to tax policies that will distort investment, production and trade. The rules-based global trading order, underpinned by the proper functioning of the World Trade Organization (WTO), is straining. Global supply chains are being re-ordered and re-configured, not always for economic reasons.

Mr Liang Eng Hwa and Mr Desmond Choo asked how we can remain competitive and relevant amidst these disruptions.

The short answer? We need to turn these challenges into opportunities. We must be a safe harbour for capital, talent and ideas in an uncertain world. We must be connected, trusted and resilient, as a node, both physically and virtually, in order to serve different markets in a bifurcating and fragmenting world.

We need to embrace technology, especially digital technology – to be the disruptor and not be the disrupted.

We need to master digitalisation to transcend the constraints of our size and geographical location, where mastery of data can lead to increasing returns to scale. And we need to leverage on our small size to pivot faster and to respond more nimbly than our competitors.

Over the last six months, MTI has visited our companies every week to see how we can work with them to overcome the immediate challenges but more importantly, to seize the opportunities going forward. These plans have been widely reported in the media and I will not repeat all of them today. Instead, I will draw together three broad strategies that we must execute well, consistently and coherently.

First, strengthen our position as a global hub for business and technology. Second, entrench ourselves as a critical node in global value chains to make us hard to displace. Third, build real and unique capabilities in our enterprises and workers so they can compete in a more globalised world.

Mr Liang Eng Hwa and Ms Foo Mee Har asked how Singapore has performed as a business hub amidst COVID-19.

1.30 pm

We have done credibly so far. We have attracted in 2020, $17.2 billion worth of Fixed Asset Investments and $6.8 billion in Total Business Expenditure. These are votes of confidence and faith in Singapore. We should be proud of how we have responded, but we must press on. The ease of digital connection, collaboration, supervision and even execution will redefine the role of hubs for businesses.

Lower value-added activities will increasingly be off-shored to remote working sites, as they are no longer constrained by geographical boundaries. Work from home means work from anywhere around the world. Competition will never be local but always global.

However, the world will still need high quality business hubs for high value-add transactions and trusted collaborations that must be executed via physical interactions. For Singapore to be in this global class of the few high-quality, high-trust business hubs, we will need to create an environment where we distinguish ourselves.

And this is how we are going to do it.

First, with clear, transparent, consistent and coherent legal and policy frameworks to allow businesses to mobilise capital, aggregate talent and protect intellectual property.

Second, with progressive rules to enable new business models to thrive.

Third, with superior networks that give us denser and more secured connections with the world, allowing global businesses to operate out from Singapore.

Next, with a mix of global and local talent to serve diverse markets across the entire globe.

And finally, to entrench critical parts of the R&D value chains, so that businesses will include us in their innovation networks, even in the depth of any crisis.

These are the reasons why we are investing heavily in the development of our local talent, the attraction of global talent to complement and reinforce our local talent pool. This is also why we are aggressively strengthening our physical trade and digital connectivity including expanding our network of Free Trade Agreements and the new generation of digital agreements and partnerships.

This is also why we have spent and will continue to spend on our R&D – from basic research to translational research for commercialisation, and this also why – as we have heard from MinLaw – we will continue to strengthen our IP regime, from valuation to arbitration and assessment so that we provide a complete eco-system for businesses wanting to put their IP in Singapore.

We must get all these enablers right, to strengthen our position as a global business hub. With all these enablers in place, we are confident that our reputation as a trusted and efficient place to do business will distinguish us from the competition.

But, we are not complacent and we must never be complacent. We are always very aware of the stiff competition that we are up against.

Let me now touch on our second strategy to entrench ourselves in the global value chains

Indeed, the nature of competition has changed. While quality and cost competitiveness will continue to remain as important factors, other more important factors have arisen: the speed to evolve new products, the speed to penetrate new markets, the resilience of supply chains and the quality of new ideas, as intellectual capital will increasingly overtake physical and financial capital as the defining competitive yardstick.

Ms Jessica Tan and Mr Liang Eng Hwa asked about growth sectors, and how we can seize opportunities in the re-organisation of the global supply chains. We are looking out for emerging sectors such as agri-tech, urban mobility and sustainable urban solutions, as Prof Hoon Hian Tech has mentioned. Minister of State Alvin Tan will elaborate on how we will help local businesses venture into the agri-tech sector.

But, instead of just pursuing new "sunrise" industries, we also need to pursue critical capabilities needed to anchor ourselves in every industry that we choose to compete in – be they "sunrise" or otherwise. That is why our second strategy is to entrench ourselves in the critical niches of the global value chains.

Take the semiconductor industry, for example. How much we produce and how much global market share we command now may not be the most important question over the long term.

Over the long term, what is important is whether we have access to the intellectual property to produce the chips and the intellectual property to build those machines that produce the chips.

Moving further upstream, do we have the talent and talent networks to continuously innovate, to improve our processes and quality control, so that global companies will want to site their operations in Singapore and create better jobs for our people? These questions apply to high-tech industries like semiconductors, biomedical, and info-communications; as much as they apply to precision engineering and even to the manufacturing of the humble surgical masks.

Recently, I visited various enterprises and research institutes to better understand the new world of manufacturing to see how they incorporate Industry 4.0 technologies from data analytics to additive manufacturing.

A product that used to require many parts to assemble, can now be produced as one simple part, with additive manufacturing enabling, with much less wastage and much greater precision.

A product that used to take years to evolve can now be designed and redesigned in days.

A production system that used to be put together only after the product design has been finalised, is now being put together while the product design is being conceptualised.

The speed of evolution of products and production system is amazing. And we need to understand all these changes. The ability to set standards for adoption in a fast-paced market has become critical to a product's success. The "good enough" and fastest, will beat the better but slower. There is much that we need to learn and change our mindset in this new, competitive environment.

Doing what others do at a cheaper price, is "Red Ocean Strategy". In other words these are shark-infested waters, best avoided.

Producing things that others cannot, is "Blue Ocean Strategy". Here, the opportunities abound. Here, is where we want to be.

Similarly, we can no longer be a place of arbitrage. In a globalised world, we will be easily disintermediated and displaced by cheaper competitors or digital platforms, unless we can add something unique and of value to others. We must become the exchange that adds value.

The value-add can be the provision of complementary services or adjacent services, from financing, to legal to business syndication. It can also be in terms of verification and traceability in a world that is increasingly conscious about sustainability.

Mr Liang Eng Hwa and Prof Hoon Hian Teck spoke about enhancing connectivity and taking advantage of our economic openness. Indeed, our superior connectivity will be a value-add factor in a world seeking greater resilience and diversity in their supply chains.

We have here a deep and wide collection of global and local companies. This allows the companies located here to compete as an eco-system. And I want to emphasise this: we compete as an eco-system. In turn, our ecosystem attracts more companies to situate themselves here to take advantage of this superior network and the dense eco-system.

This is now a virtuous cycle that was hard-fought and hard-won. We must not lose this. If we do the wrong things and damage this reputation and ecosystem, we can quickly lose it all. "Wrong things" include inconsistent policies on business, taxation, manpower and talent. "Wrong things" include sending the world the wrong signals that detract from our intent to enable our companies to form globally competitive talent teams to compete with the world. We should be mindful.

Let me now touch on the third strategy: to deepen our corporate capabilities and workers’ skills. The IMF already ranks us a one of the world's most competitive economy. Our workers are amongst the world's best. But, this is a journey without end and we must continue to invest in their capabilities and skills.

This is why, I agree with Ms Janet Ang about about creating a new compact among businesses, employees and the Government. We will spare no effort to help our enterprises and workers acquire new capabilities to compete in a more globalised world.

We cannot shield ourselves from global competition, but we can and must equip ourselves to compete globally. Businesses can play a role in this, together with Government and the unions.

We must all play our part to develop the local talent and grow Singaporeans to take on leadership positions. Singaporeans must also be prepared to venture overseas to seize new growth opportunities. These are the correct ways forward for a small economy like ours.

To deepen our corporate capabilities requires an eco-system approach. We must leverage on our existing strengths in tradition industries such as aerospace and manufacturing, even as we invest in emerging technologies like digital services.

We must continue to attract global companies and MNCs with cutting edge business concepts and technologies to be planted here while we nurture our SMEs to be future global champions. I always tell our SMEs, "Stop calling yourselves 'small, medium enterprises'. Aspire to be Singapore MNCs Emerging SMEs."

Mr Leon Perera asked about the grants given to MNCs versus SMEs and suggested to tie a conditional incentive for MNCs to work with local SMEs. I am glad Mr Leon Perera shares our philosophy.

In the last five years, we gave around $13 billion to MNCs and $21 billion to SMEs. But looking merely at relative grant amounts versus returns and value-adds overly simplifies the situation. First, the relationship between MNCs and local companies is often symbiotic. When MNCs here do well, they are more likely to work with local companies, source from them and have them as part of the value-chain and supply chains.

We also encourage MNCs to work with SMEs through the PACT programme, which supports knowledge transfer between larger companies and local SMEs or start-ups. And we will do more where it makes sense to.

Second, our support for MNCs and SMEs serve to enhance their symbiotic relationship in various ways. MNCs are already best-in-class in their industry. Our support helps them to bring in new business lines and technology that will uplift our entire eco-system and create high value-added jobs here.

For SMEs, we provide support for more fundamental purposes: digitalising, entering into new markets and streamlining work processes. As smaller businesses level up, they will also grow to become an integral part of the local supplier eco-system for MNCs and beyond.

Ms Jessica Tan asked how we can enable the active participation of local businesses in emerging sectors. We have different schemes to help companies big and small – because their needs are different. For large enterprises, our goal is to help them compete globally by providing access to superior trade networks, R&D and talent networks. We will help them become regional or global champions, by providing growth capital and support for the commercialisation of R&D.

For medium-sized enterprises, our goal is to have more of them and bulk them up to compete in niche areas, beyond Singapore. This why we embarked on the Scale-up SG and Enterprise Leadership Transformation programmes to build deep capabilities for them to compete on a global scale.

We also aim to help them internationalise by bringing them together to compete overseas with programmes such as GlobalConnect@SBF, and the Southeast Asia Manufacturing Alliance. Schemes like the Market Readiness Assistance grants help them to penetrate overseas markets.

Second Minister Tan See Leng will share more on the support available for different enterprises.

For small and micro-enterprises, our goal is to provide them with shared and digital platforms to improve their productivity and efficiencies by accessing shared capabilities, from design to sales to management. Minister of State Low Yen Ling and Minister of State Alvin Tan will share more.

I would like to say something. Our schemes are constantly evolving. We are never shy to do away with old schemes that are no longer relevant, no longer needed, or are less relevant. We will constantly re-invest our finite resources into the schemes that do the best, the most, for our enterprises.

Mr Chairman and Members of this House, let now me reiterate where I left off at the beginning.

We are not returning to a pre-COVID-19 world. How we make a living will change even faster in the days ahead.

1.45 pm

Let us and let us help our people, focus our minds on the new forms of competition ahead, for it will be tougher, it will be more global. Let us not focus on the wrong issues or try to resist inevitable change, or try to protect what will be made irrelevant and displaced in time to come.

Ultimately, our ability to do many of the good things that we have said in this House rests on our ability to earn our keep and make a living in this more globalised, more competitive world and we must never forget that.

Let us face up to the competition, do the right things, help our enterprises and people acquire a competitive advantage to distinguish ourselves from the competition.

COVID-19 is said to be the crisis of our generation. This can also be the opportunity of our generation to distinguish ourselves, to lay the foundation for the next generation, by winning new investments and creating better jobs for this generation and the next. I have every confidence that if anyone in the world can do this, Singapore and Singaporeans must be amongst them, and we will emerge stronger together from this crisis. [Applause.]

The Second Minister for Trade and Industry (Dr Tan See Leng): Mr Chairman, I shall speak about two ways through which we will help our enterprises emerge stronger from the crisis.

First, by anchoring strong local enterprises; and, second, by helping our enterprises go global.

Mr Liang Eng Hwa, Ms Foo Mee Har and Mr Shawn Huang asked how we intend to support businesses and nurture them into local champions. We will do so by pressing on with industry transformation at both the sector level and, contemporaneously, at the eco-system level.

Our overriding priority over the past one year has been to weather the COVID-19 storm. However, we cannot hunker down forever. We must keep our eyes focused on the future and press on with industry transformation to emerge stronger.

Fortunately, we are not starting from scratch. We had earlier embarked on transformation through our 23 Industry Transformation Maps (ITMs) and we are refreshing them to make sure that they are still relevant in light of COVID-19, and that we are able to unlock new opportunities that have arisen globally over the last 12 months or so.

Mr Liang Eng Hwa also asked how we will turn up the pace of transformation and we will do this by strengthening our industrial ecosystem and accelerating Industry 4.0 or the I4.0 adoption. One example of this is the manufacturing industry. This is fundamentally changing with digitalisation, robotics and new technologies like additive manufacturing. The industry needs to transform to achieve our manufacturing 2030 vision and we are taking decisive steps to do so.

The Smart Industry Readiness Index or SIRI launched in 2017 helps manufacturing firms take specific, measurable steps towards transformation. We are working with the World Economic Forum (WEF) to make SIRI a global benchmark to facilitate our SIRI assessed firms to be able to compete globally.

The JTC-SBF Industry Transformation Initiative, which was launched last year, will further help local manufacturing companies in their I4.0 transformation, by providing access to resources like curated training workshops and capability building initiatives. We will also create new peaks of manufacturing excellence by bringing together related companies to collaborate, to experiment and to succeed together.

Just as Jurong Island and the Seletar Aerospace Park catalyse our chemicals and aerospace industries respectively in the not-too-distant past, so too will the new Jurong Innovation District or JID be the catalyst for I4.0 ambitions.

The JID will house the Advanced Remanufacturing and Technology Centre (ARTC) and factories of the future, and it will serve as the focal point to develop and testbed new technologies like 5G and autonomous vehicles to serve global markets.

I4.0 is most commonly associated with the manufacturing sector but, actually, the spirit behind it – one of being forward-looking and making the most of technology, finding ways to do things more efficiently and smartly – must be a pervasive culture for all of us. It has to apply aggressively across all industries. And I am happy today that many of our companies have imbibed this spirit.

Besides sector-level transformation, as I have alluded to earlier on, we will also do more at the eco-system level to nurture all businesses, regardless of size and sector, to pursue the next bound of growth.

In 2020, we enhanced co-funding schemes such as the Enterprise Development Grant (EDG) and Productivity Solutions Grant (PSG) to help companies transform their capabilities. Over 15,000 companies embarked on transformation projects with ESG’s support in 2020. In spite of the crisis, this is 50% higher than even in 2019.

We will also continue strengthening enterprise leadership capabilities through schemes like the Enterprise Leadership for Transformation (ELT) and Scale-up SG programmes. In particular, through Scale-up SG, we aim to groom another 50 future local champions over the next two years.

Mr Chairman, we will continue with this suite of support to strengthen enterprise capabilities. The Deputy Prime Minister has spoken about the various scheme enhancements we will make to encourage more companies to come onboard.

Let me emphasise three key areas that will form the next bound of growth for our businesses to be able to compete globally. One, a Team Singapore approach; two, access to financing; and, three, innovation.

First, a Team Singapore approach to capture opportunities.

Ms Foo Mee Har and Mr Edward Chia asked about how our companies can adopt a collaborative mindset such that the entire value chain is uplifted, and everyone benefits. Indeed, we must embrace this Team Singapore approach. Because our competition is not with one another here, it is with the world. So, individually, even our largest companies are modest by international standards. But, collectively, we can win as Team Singapore.

We are doing much more to develop our winning game plan. The Government is partnering the private sector on the AfAs; these are Alliances for Action. They bring together a diverse range of industry and public sector stakeholders to quickly seize opportunities in sectors, such as tourism, logistics and others. For example, the AfA on Smart Commerce has brought together industry players to pioneer new operating models, to digitalise and to diversify revenue streams. The AfA had launched an online-offline 11 November campaign, 11-11, incorporating gamification elements to provide retailers with more marketing opportunities and deliver consumers a whole new experience.

Another example is how various industry stakeholders collaborated to create opportunities in the pandemic for the Meetings, Incentives, Conventions and Exhibitions (MICE) sector. The Safe and Innovative Visitor Experience AfA developed a prototype for hosting exhibitions safely amidst last year's pandemic and tested it in November last year at the TravelRevive tradeshow. This has attracted close to 1,000 attendees, comprising 65 foreign visitors from 14 different countries. It showed that Singapore remained open for business – successfully and safely.

A big part of our ecosystem strategy is strengthening the partnerships between large and small companies. Hence, I agree with Ms Janet Ang that LLEs can play an important role in uplifting our SMEs. ESG’s PACT programme encourages such mutually beneficial partnership programmes between companies. PACT has supported more than 280 partnerships and benefited more than 1,500 Singapore-based firms since 2010.

The National Innovation Challenges, launched in 2020, also helps to catalyse cross-company partnerships to address sector-wide challenges. The NIC also helps smaller companies to build up their track record in the process. In addition, our trade associations and chambers of commerce or TACs, they will also play an important part in fostering industry partnerships. Minister of State Ms Low Yen Ling will speak more about this in her speech later.

Second, enabling greater access to financing and capital. Whether our businesses are planning to develop new products or expand overseas, having access to financing and capital is crucial for the enterprises' growth ambitions. This could be in the areas of product development or just for international expansion.

The Government carefully monitors our financing ecosystem to ensure that all companies – from start-ups to SMEs to LLEs – can access the capital that they need. We have extended the Enterprise Financing Scheme-Venture Debt Programme (EFS-VDP) and raise the maximum supportable loan quantum from $5 million to $8 million. This will give high-growth enterprises greater access to financing.

Ms Foo Mee Har and Ms Janet Ang asked about how the new Local Enterprises Funding Platform (LEFP) can support our local companies. This is indeed a very major initiative. The Government provides financing support to grow local enterprises, particularly when there is a dearth of private capital. Most of these are in the form of grants or loans.

Equity financing, equity initiatives are typically targeted at start-ups and SMEs. This is where the risk can be higher or you need a longer runway for more patient capital. This is done through existing co-investment programmes, such as those managed by Heliconia and EDBI or EDB Investments. However, there is an increasing need to support our larger companies with the ambition of becoming regional or even future global champions. This is where the LEFP comes in to precisely address and meet this need.

So, drawing on the network and expertise of Temasek, the LEFP will actively seek out promising LLEs to invest in, focusing on sectors that are aligned with the engines of growth in our economy. This complements existing efforts by EDB and ESG to help our most promising firms to scale up, to soar and to reach their full potential.

Third, supporting our enterprises to innovate. We will spare no effort to support our enterprises to innovate. But we hope our enterprises must also do their part to support us to invest in innovation. Businesses that leverage innovation are better placed to compete globally and capture value for our economy.

As the Deputy Prime Minister and Minister Lawrence Wong have mentioned in their speeches, RIE is a cornerstone of Singapore's national strategy to develop as an innovation-led economy.

Assoc Prof Jamus Lim spoke about increasing R&D spending. The Government is committed to investing about 1% of our GDP in research, innovation and enterprise over the next five years. And this is similar to our commitment for RIE2020 and our earlier research plans.

Our investments in RIE is at a comparable level to other small advanced economies. Unlike what Assoc Prof Jamus Lim alluded to earlier, we are by no means far behind. Compared to the more mature advanced economies, our RIE eco-system is still at a relatively early stage of development. Notwithstanding that, in absolute terms, we have increased our investments in RIE significantly since our first National Technology Plan in 1991.

In fact, if you look at, just for reference sake, Singapore's public expenditure on R&D, it was about 0.7% of GDP in 2018, compared to 1.1% for Denmark, 1% for Sweden and Switzerland. So, I think we need to compare on the like for like.

2.00 pm

This kind of investments are significant for a small country like us. It is not just about increasing public investments into R&D, but it is about making very judicious investment. About spending the money wisely. About continuing to develop the capabilities that are needed for us to meet our national strategic needs and to create new growth opportunities for ourselves. And in the past 20 to 30 years, we have made collectively as a country, significant strides. But my exhortation is to everyone who is in this House: we cannot rush this.

Mr Leong Mun Wai also asked about the returns to our RIE investments and commented about the foreign talent in our RIE landscape.

Our investments in RIE have benefited Singapore in several ways. First, business expenditure on R&D has increased by more than two-and-a-half times, from $1.5 billion in 1998 to approximately $5.6 billion in 2018. We hope to continue to see continued growth of private R&D spending. All of our Government financing schemes, including the LEFP, the Venture Debt Programme and all the rest, help to crowd in private capital.

To his point about foreign talent in our RIE landscape, let me reassure Members of the House, that we have developed a strong core of research scientists and engineering talent and we will continue to grow our pipeline. In fact, the number of Research Scientists and Engineers (RSEs) has almost tripled from about 12,700 to over 36,000 in the last 20 years, from 1998 to 2018. And 70% of this group of 36,000 are either Singapore Citizens or Permanent Residents. Of this, the industry RSEs, both industry and private sector RSEs, grew at a slightly faster rate, from about 6,500 to over 19,000 in the same period.

For the RIE 2025, we will continue to push these initiatives and build up our scientific talent pipeline. We are increasing the A*STAR scholarships by almost 25% to encourage local undergraduates interested in taking up PhDs through the Singapore Teaching and Academic Research Talent scheme and the Returning Singapore Scientist scheme. We are strengthening the pool of Singaporean academic talent in our universities.

All of these returns extend beyond hard data. More and more companies are investing in Singapore because of the nexus to our R&D eco-system. Whether to create durable aircraft engines or skincare tailored to the Asian skin, they want to create intellectual property as a sustainable, competitive edge in an economy that is trusted, and in Singapore that fits the bill.

Our R&D investments also delivered benefits in a disruptive environment. During the pandemic, when the world was short of COVID-19 test kits, our biomedical science R&D capabilities built up over the past 20 years have enabled us to develop and manufacture Fortitude COVID-19 diagnostic tests, which have since sold more than five million units in over 45 countries.

Prof Hoon Hian Teck said that spurring innovation and activities will enable Singapore companies to capture opportunities, and Mr Shawn Huang has asked about how we are helping our enterprises grow innovation capabilities. As I have said earlier on, we will continue to support our enterprise, including SMEs, to benefit from R&D and innovation, particularly in areas that have delivered outsized returns. We will do so by providing financing for innovative start-ups.

ESG administers the Startup SG Equity programme to catalyse private sector investment into innovative Singapore-based tech start-ups in key emerging sectors. Besides equity co-investment, Section 13H and Fund Management Incentive tax schemes also encourage fund managers to direct their capital toward Singapore-based businesses and start-ups, and these schemes were enhanced in Budget 2020.

One of the challenge that start-ups face is the relative lack of talent who can bridge research and business. The newly established Innovation and Enterprise Fellowship programme will expand the local pool of deep-tech technical talent with experience in R&D translation, by connecting researchers with accelerators, start-ups, or investors for product development and technology commercialisation work.

Beyond start-ups, we are also doing more to help SMEs with innovation and commercialisation of R&D. First, talent and knowhow are critical.

We will continue to support SMEs that lack access to research talent through the Technology for Enterprise Capability Upgrading (T-Up) programme. With this T-Up programme, A*STAR seconds research talent to SMEs to enhance their innovation capabilities. Since its inception in 2003, more than 900 A*STAR researchers have been seconded to over 800 SMEs.

Our Innovation Advisors programme also facilitates the know-how by appointing experts from various fields to SMEs to impart relevant advice and networks.

Mr Chairman, I have described our strategies to anchor strong local enterprises to emerge stronger from the crisis. But the ultimate ambition is to help our enterprises spread their wings and internationalise.

Mr Liang Eng Hwa asked whether the pandemic has put a dent on our internationalisation momentum and Ms Jessica Tan asked how our businesses can be supported to internationalise. Indeed, the travel restrictions have definitely made it harder for our businessmen to travel to foreign markets and the conditions in several of our major export markets remain challenging. However, I am encouraged by our businesses’ continued willingness to pursue alternative means of accessing foreign markets. We will do more to support our companies to internationalise and seize opportunities globally.

We will expand the Global Innovation Alliance (GIA) network from 15 to 25 cities over the next five years to support enterprises’ ambitions to expand their global market outreach and seek innovation partnerships. Cross-border innovation platforms such as the Co-Innovation Programme (CIP), under the GIA, will support our enterprises in collaborating with overseas partners on innovation projects.

We will also support to offset businesses’ internationalisation costs, in addition to the six-month extension of support levels for the Market Readiness Assistance (MRA) grant, we will also fold in Trade Credit Insurance support to help defray costs of such insurance. In addition, we have also expanded the scope of qualifying expenses in the Double Tax Deduction for Internationalisation (DTDi) scheme to include Virtual Trade Fairs to account for new modes of internationalisation due to COVID-19.

Third, a key ingredient of international success is a strong talent pool. Through the Global Ready Talent (GRT) programme, our students and young professionals can gain greater exposure and deeper in-market knowledge, and thereafter, become strong contributors to their employers’ global expansion efforts. And since the launch in 2019, GRT has supported more than a thousand Singapore enterprises in creating such opportunities for close to 6,000 students.

Ms Jessica Tan also spoke about the importance of our trade associations and chambers of commerce (TACs) in supporting businesses to compete globally.

This brings me to my last point on how TACs are supporting internationalisation. One example is how the Singapore Business Federation (SBF) has partnered ESG to launch its GlobalConnect@SBF initiative. This initiative, through their team of market advisors, providing targeted advisory services, has since supported more than 2,500 Singapore businesses in spite of the challenging conditions in 2020.

Supported by all these efforts, our common vision of success is to have an eco-system of resilient enterprises that are highly capable, that are open to collaboration, and that are equipped to compete globally. They will be nimble, and innovative, and able to withstand external disruptive shocks and black swan events such as COVID-19.

In conclusion, Mr Chairman, opportunities favour the prepared and the bold. For budding entrepreneurs, I encourage you to take the first step. Put your dreams into a business plan, develop a minimum, viable product or solution, present them to us. And we will review and where it is feasible, we will do our best to help you, to uplift and to soar.

For existing enterprises, I urge you to seize the opportunities available and to dream big. If you have the gumption to take the next step, the Government will ride this journey with you. To strengthen you, to enable you to spread your wings. We will be the wind beneath your wings.

The Chairman: Mr Alvin Tan.

The Minister of State for Trade and Industry (Mr Alvin Tan): Mr Chairman, Minister Chan Chun Sing spoke about digital acceleration and how it is affecting businesses, workers and consumers. With COVID-19, tech adoption is no longer an option, but an imperative. Indeed, we have observed two major transformation trends.

First, the global tech landscape has transformed. It has become quicker, more dynamic, more competitive. Before COVID-19 hit, 80 of the world’s top 100 tech companies were already operating in Singapore. Despite the pandemic, we have attracted even more tech-driven companies to Singapore due to our sustained leadership in the digital field, strong intellectual property regime, digital connectivity and support for innovation.

For example, we announced in October that the Hyundai Motor company is constructing an innovation centre here to pilot new advanced manufacturing models using artificial intelligence, big data and other technologies.

Such investments will boost Singapore’s mobility eco-system and grow adjacent industries. But such investments are by no means guaranteed, and we must secure our position in this highly competitive environment. We simply must, as Mr Lee Kuan Yew reminded us, stay relevant to the world.

The second transformation is that more local companies have used tech to transform. Businesses that are thriving in this new world, have transformed by using digital solutions to access new markets even without a physical presence.

In the spirit of SG Together, our Government is supporting businesses digitally transform. Initiatives such as Grow Digital, as part of ESG’s and IMDA’s SMEs Go Digital programme, help businesses reach global audiences through e-commerce platforms.

I hope to see even more businesses tap on such initiatives to transform themselves.

Tech can transform firms, but it can also catalyse sector transformation. It can help struggling industries, like our tourism sector, pivot and prepare for recovery, but also uplift high growth industries, like agri-food tech. This is because sectors such as agriculture and retail have successfully used tech to grow and create new opportunities. With agri-food tech, we can now produce food more efficiently and strengthen our food supply resilience. This helps us overcome our challenges as a resource-constrained country where land and environmental factors make it challenging for an agriculture sector to thrive.

2.15 pm

Sophie's Bionutrients which is a Singapore-based company is the first agri-food tech start-up to grow alternative protein from microalgae in a matter of days, using just a fraction of space. It won the 2019 Liveability Challenge and will launch its first urban protein production facility here and scale up in Asia. Companies such as Sophie’s Bionutrients highlight the vast opportunities that businesses can seize using tech.

Mr Don Wee asked about our plans to help SMEs venture into the agri-food business. Enterprise Singapore (ESG) and the Singapore Food Agency (SFA) have schemes to support agri-food tech businesses and catalyse private sector financing from set-up to scale up. These include ESG’s Enterprise Financing Scheme and SFA's Agri-Food Cluster Transformation Fund.

To encourage early-stage equity investments into Singapore-based agri-food tech start-ups, ESG collaborated with SEEDS Capital to appoint seven co-investment partners. We expect this to translate into more than $90 million of investments. Shiok Meats, a local alternative protein start-up, which raised $17.3 million in Series A funding, is an example of companies that could benefit.

And as we grow this industry, new exciting jobs will be created for Singaporeans. When I visited the Marine Aquaculture Centre in St John’s Island, I met with Ong Jingyi from Republic Polytechnic. She is an Aquaculture Specialist at Allegro Aqua. Young and passionate Singaporeans like Jingyi can look forward to exciting careers in our fast-growing agri-food tech industry.

So, tech is a useful tool to help businesses grow, secure new opportunities and survive during COVID-19. This is especially so for our tourism sector which is struggling.

With on-going travel restrictions, our tourism sector continues to face difficulties. Mr Saktiandi Supaat and Mr Derrick Goh asked about how we are helping our tourism sector recover.

In 2020, we supported over 7,000 tourism businesses to retain locals through our Jobs Support Scheme (JSS). We will extend the JSS by six months to support our tourism sector, as Deputy Prime Minister Heng has suggested. Tourism firms will receive 30% support for wages paid from April to June 2021, and 10% support for wages paid from July to September 2021.

We will also extend the waiver of licence fees for hotels, travel agents and tourist guides to December 2021.

As international visitor arrivals will likely remain weak this year, domestic demand is critical to support our tourism businesses which is a point that Prof Hoon Hian Teck made earlier. So, one such measure to catalyse domestic demand is our SingapoRediscovers (SRV) campaign and vouchers scheme which will continue to encourage Singaporeans to explore our diverse offerings and support our local tourism businesses. We are closely monitoring feedback about the SRV scheme and are exploring ways to further improve it.

COVID-19 has changed the tourism landscape and travel norms. Beyond current challenges and looking ahead, how can we help our tourism sector transform and build resilience against future disruptions? Here is what we are doing.

Last February, we set up the Tourism Recovery Action Task Force, comprising tourism leaders from Government and industry, to identify opportunities and to co-create solutions to ensure that our tourism sector is well-placed when borders reopen.

To support our MICE industry and MICE sector, we set up the Alliance for Action on Enabling Safe and Innovative Visitor Experiences which worked closely with Government and industry to develop a prototype for safe tradeshows and exhibitions.

The Singapore FinTech Festival x SWITCH event is an example of how the sector has adjusted to seize opportunities amidst COVID-19. When I visited, I saw first-hand how its organisers, SingEx and Singapore Association of Convention and Exhibition Suppliers (SACEOS) pivoted into a unique hybrid event. Instead of setting up chairs and screens at Singapore Expo like they used to, they had to set up digital networks, large scale ZOOM conferences and real-time dashboarding. I met with Si Choon Hoe, a 65-year-old senior executive at SingEx who picked up these skills and is sharing his wealth of experience with younger colleagues. The event was a success, attracting participants from over 160 countries.

Through STB’s "SingapoReimagine" initiative, we are working with tourism sector to spark ideas and shape the future of tourism – positioning Singapore as an attractive and safe destination.

We will also open Tcube this year which is a platform for tourism stakeholders to meet and test new solutions.

Tech is key in the transformation process. But at its core requires talent. People. The two transformations I talked about are only possible because Singapore remains a trusted and well-connected hub where talent can grow and thrive. Talent that can help us to nurture a vibrant and competitive tech eco-system that can hold our own against the world and help Singapore remain relevant.

Mr Abdul Samad asked about the job opportunities and required skills arising from investments and business trends. Increased production and consumption of digital services have fueled the demand for tech talent in Singapore.

Based on LinkedIn’s Jobs on the Rise Report, the demand for data science, cybersecurity and specialised engineering talent in Singapore has surged. Microsoft’s estimate that there will be 149 million new tech roles globally by 2025. So talent is scarce and global competition is fierce. Korn Ferry estimates that the world will be short of 4.3 million tech workers by 2030.

Other countries are already in the hunt for this talent. Countries such as France, China and Malaysia have also enhanced or launched visa programmes to attract tech professionals to their shores.

So, what must we do? We cannot afford to close ourselves off from the world. We need to continue ensuring Singapore’s global attractiveness and work with companies to attract and develop the talent they need, both locally and globally.

We must and will also grow our own local timbre. Second Minister Tan See Leng spoke about building talent and leaders in SMEs locally. In the rapidly evolving tech sector, we are also doing the same.

Ms Jessica Tan and Ms Foo Mee Har asked about our plans to grow our local tech talent pipeline. Our Government, Institutes of Higher Learning (IHLs) all play important roles in this regard.

The TechSkills Accelerator (TeSA) programme equips individuals with in-demand skills in emerging tech and helps our companies upskill existing workers and hire professionals. MCI will share more about TeSA at their COS.

Our IHLs are also training aspiring talents to take up ICT roles. Over the next three years, our IHLs will generate around 20,000 local tech talent, supplemented by at least 6,250 from WSG’s and IMDA’s place-and-train programmes in functions such as Software Engineering and Cybersecurity. These are jobs that the LinkedIn and Microsoft reports show to be in hot demand.

The private sector is also playing its part with Trade Associations and Chambers (TACs) such as SGTech having set up the STAR fund to help members deepen their capabilities in the workforce.

Mr Chairman, globally competitive teams have diverse and cosmopolitan workforces, with a mix of talents from different shores. Minister Chan spoke about how Singapore must remain open to talent if we are to compete and secure our position globally. This is even more critical in the tech sector.

So, we must attract global talent to complement our local workforce and fill our skill shortages. This is part of our strategies to develop a base of tech companies and talent to ensure Singapore is able to compete globally. This will also create more opportunities for locals to work in globally competitive teams and dynamic teams, along top tech talent from all over the world. As I did; and as some Members in this House, including Ms Janet Ang in IBM and Ms Jessica Tan in Microsoft did.

So, one way to ensure top talent joins Team Singapore is through Tech.Pass and Tech.Pass which allows high-achieving, top-tier global talent to contribute to our economy in multiple ways as a founder, employee, consultant and academic. This puts Singapore in a competitive position in the global race to attract highly skilled tech professionals in critical fields.

To Ms Foo Mee Har's question, we have seen keen interest in Tech.Pass since applications opened in mid-July and we will continue to evaluate the scheme.

Beyond tech roles, demand for other key skills has also expanded. Businesses that have experienced a surge in demand for products and services have expanded their engineering, production and business development capabilities. Sectors, such as Advanced Manufacturing, continue to see strong demand for automation engineers and design engineers and skillsets such as programming and 3D modelling and we have initiatives to help jobseekers gain these required skills.

Singaporeans can also gain hands on experience through industry-relevant training. For example, under the Attach-and-Train programme for robotic engineers, Singaporeans can learn robotics and automation technologies through on the job training attachments at host companies.

Mr Abdul Samad will be pleased to know that our Government works with tripartite partners, including the Labour Movement, training providers and the industry, to develop such schemes and upskill Singaporeans in progress with Singapore’s growth.

Mr Chairman, we are in the middle of the most challenging pandemic recession that our world has faced. We cannot let up. We must seize the opportunities that are feasible to us. We must remain open and not closed to the world and as the world transform so must we ahead of the world, relevant to the world.

In this transformation, our Government will stand shoulder to shoulder with our businesses and our people. We will and must ensure that Singapore continues to be a global centre for business, innovation and talent, where local and global talent can live, work and play.

In my maiden Parliament speech, I likened Singapore to the Starship Enterprise – diverse in talent, always exploring new frontiers, boldly going where no one has gone before and breaking through the crisis before us.

But we cannot be a global node without also transforming our local businesses. In that vein, Minister of State Low Yen Ling will next elaborate on the support for our local enterprises as they undergo their own transformation journey. [Applause.]

The Minister of State for Trade and Industry (Ms Low Yen Ling): Mr Chairman, as Singapore settles into Phase Three and vaccinations are underway, we seek to sustain the momentum for recovery and emerge stronger post-COVID-19.

Earlier, Minister Chan, Second Minister Tan and Minister of State Tan spoke about our forward-looking agenda and reiterated MTI's commitment to help our enterprises emerge stronger from this crisis. So, let me now elaborate on our near-term priorities ahead.

SMEs will continue to play a pivotal role in the recovery of our economy. They make up 99% of our enterprises, of our companies and contribute 72% of employment. To support the SMEs’ recovery and growth, we will strengthen our business eco-system in partnership with companies and trade associations and chambers (TACs).

Let me share how the Government will co-create the future roadmap with SMEs and boost our support for digitalisation as urged by Mr Shawn Huang and and Ms Jessica Tan.

I meet with the heartland merchants regularly. Several shopkeepers indicated their interest to go digital, and those who were online, were keen to do more. They asked for more resources and support to innovate.

This positive attitude and readiness to transform is commendable and we will pull all stops to rally behind our SMEs, our heartland merchants.

Our flagship Heartlands Go Digital Programme provides specific support to equip our heartland shops with up-to-date IT knowledge, e-payment options and digital solutions. It aims to revitalise heartland shops and future-proof these businesses with solutions ranging from visual merchandising in stores to local place-making activities and digital marketing. This programme is led by the Heartlands Digitalisation and Revitalisation Committee co-chaired by Senior Minister of State Sim Ann and myself, reflecting a collaborative and, most importantly, an enterprise-centric approach. The Committee comprises Federation of Merchants' Association Singapore (FMAS), Heartland Enterprise Centre Singapore (HECS) and Government agencies like ESG, STB, GovTech, IMDA and HDB.

To rev up the speed of adoption, close to 200 Digital Ambassadors and business advisers have been on the ground reaching out to some 20,000 heartland enterprises. They shared with the shopkeepers about the benefits of digitalisation and provide step-by-step guidance on how to go digital.

As of February 2021, we have engaged more than 85% of these heartland shops and are on track to meet our target this month.

Interestingly, over the last one year, we are seeing more second generation and third generation family heartland businesses leveraging on available Government programmes to transform their business by going digital. Allow me to share one interesting example.

2.30 pm

Petite Blooms – they are a florist business in Teck Whye, run by a mother and son team – recently made the leap to e-payments because they wanted to capture the growing number of e-savvy customers. Today, up to 25% of their sales use e-payments and revenue has gone up by 10% in the first three months of going digital. Petite Blooms is also now on Shopee. Thanks to the Heartlands Go Digital programme, the shop has diversified its revenue streams and enhanced its online visibility, resulting in more business.

Mr Chairman, while we reposition our SMEs for growth through digitalisation and innovation, it is equally important to extend our support for capability development and cashflow management. Mr Derrick Goh and Mr Gerald Giam can be assured that we have many programmes that boost the productivity of SMEs and make them more competitive and attractive to Singaporeans.

In particular, the Productivity Solutions Grant (PSG) that was introduced in 2018, continues to assist businesses in their transformation journey and provide them with support for IT solutions and equipment as well as consultancy services. Since then, more than 19,000 SMEs have adopted IT solutions and equipment to get ahead. The top sectors for PSG adoption include the retail, building and construction, wholesale trade, food services and services sectors.

To help more enterprises transform, we are extending PSG's enhanced maximum support level of up to 80% till 31 March 2022. We hope this will encourage more SMEs to come onboard, transform and gear up for economic recovery.

The journey to transformation, though exciting, can be tough too. That is why we have 11 dedicated SME Centres providing one-stop assistance for SMEs islandwide. The centres' onsite business advisors partner our SMEs to guide them in their capability development and growth.

Mr Shawn Huang, Mr Derrick Goh and Mr Desmond Choo will be delighted to know that the SME Centres will begin piloting specialised advisory services to support enterprises in specific areas such as digitalisation and financing.

For example, when a SME wishes to expand but lacks the funds, the SME Centre's specialist advisor will help to assess the company's financial health and recommend the appropriate financing model and available financing instruments. The specialist advisor then guides the business owner and the SME on how to strengthen his or her loan applications and will then also provide the link-up between the SME and the relevant banks for their loan application.

Last year, the SME Centres assisted over 32,000 SMEs and more are expected to benefit from the new services. We urge SMEs to tap on the advice and resources available at our 11 SME Centres. We want to help SMEs to build up their capabilities and workforce so that they can raise their productivity and scale up their business.

I would like to assure Mr Gerald Giam that the Government is constantly looking at how we can assist SMEs to attract more local talents. The Global Ready Talent Programme (GRT) helps SMEs and enterprises build up their talent pipeline by exposing more Singaporeans to internships and overseas work opportunities. This allows our SMEs to discover potential employees and also provide our students with a better appreciation of our SMEs.

Mr Chairman, we share Ms Jessica Tan's view that Government schemes should be streamlined and made more accessible to businesses. With easier and smoother Government transactions, we hope business costs will be reduced.

This is why we have rolled out the GoBusiness Gov Assist, a portal that consolidates all available Government assistance onto one platform. Since its launch last August, it has received over 230,000 unique visits. This year, we will be introducing an online guided journey on the GoBusiness platform to help businesses start faster and start right. It will provide a step-by-step guide on how to set up a business as well as recommend a suitable business structure and suggest relevant resources.

In addition, the GoBusiness platform will have a function to assist our businesses to make checks or changes regarding premise use. This will allow companies to also quickly check, identify the right governing authority and provide information on the approved uses of rental or purchased commercial premises.

While we gear up for an economic recovery, we are also mindful of the on-going challenges in our economy. To navigate the uncertainties, we need all hands on deck. This is the time for our trade associations and chambers (TACs) because our TACs are most needed to help their members overcome difficulties and capture new opportunities.

In my recent engagements with the various TACs, I saw how they led their members to build core capabilities and pivot to other business models.

For example, the Singapore Furniture Industries Council (SFIC)'s fifth Membership Assistance Scheme benefited over 70 companies with training, opportunities in design innovation and digital capability development. It also also introduced Creativ-Space, which is a new business-to-business (B2B) e-sourcing and marketing platform that is first-of-its-kind in Asia. I graced the launch in October last year and saw how Creativ-Space helped 20 local brands, including Commune Lifestyle Pte Ltd, to break new ground and expand their reach to areas like Europe. I am delighted to hear that Commune Lifestyle's e-commerce sales have doubled in the last 10 months.

TACs also will play an important role in facilitating greater collaborations between enterprises. We are aligned with Mr Edward Chia's views on supporting more business collaborations. Second Minister Dr Tan See Leng has shared about how the Government will continue to support collaborative projects through schemes such as PACT.

Mr Edward Chia and Mr Derrick Goh will be pleased to know that the Government will work more closely with our industry partners such as TACs to upgrade their core capability. As TACs continue to play their role of supporting industry transformation and business growth, they will have to attract, retain and develop the right talent. Recognising this need, a TAC competency framework, led by the Singapore Chinese Chamber of Commerce and Industry (SCCCI), with the support from the Singapore Business Federation (SBF), BSG and SkillsFuture Singapore (SSG), will be developed.

This is the first time a competency framework is being created for TACs. Developed in consultation with the TACs, the framework will identify existing gaps and relevant skills required by the TAC secretariats and their leaders. Suitable programmes will then be developed to upgrade and build the skillsets of the TAC sector.

This competency framework is expected to be ready in the third quarter of this year and we strongly encourage our TACs to adopt it to upskill their staff. Mr Chairman, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Chairman, SMEs play a pivotal role in the recovery of our economy. They make up 99% of our companies and contribute 72% of employment.

To support the SMEs and micro-enterprises to recover and grow, the Government will introduce the following three new initiatives.

First, SME Centres would begin piloting specialised advisory services to support enterprises in specific areas such as digitalisation and financing. For example, SMEs with queries on financing can consult the SME Centres' Specialist Advisors, who will help to access a company's financial health and recommend the appropriate financing model and available financing instruments. Similarly, SMEs can also seek professional advice from the SME Centres' Specialist Advisors on matters related to digitalisation.

Secondly, we will be rolling out two new features on the GoBusiness portal. We will be introducing an online guided journey on the GoBusiness platform to help businesses start faster and start right. It will provide a step-by-step guide on how to set up a business as well as to recommend the suitable business structure and suggest relevant resources.

In addition, the GoBusiness platform will have a function to assist businesses to make checks or changes regarding the premise use. Businesses that wish to change the use of their premise can submit their application to do so on the GoBusiness platform. This will help to simplify the interface between businesses and Government agencies.

The Government will work closely with the TACs to develop a TAC competency framework, which will help TACs in attracting, retaining and developing the best talents. The framework will enhance the relevant skills required by TAC secretariats and their leaders to effectively support businesses in their transformation and development. This competency framework is expected to be ready in the third quarter of this year.

The Government has been injecting resources into supporting the continued growth of our SMEs. We hope that SMEs will capitalise on these schemes to transform and increase their productivity so as to secure their own future.

(In English): Mr Chairman, in closing, there will be no return to a pre-COVID-19 world and our enterprises must seize the initiative to transform their business models to secure the future. Rest assured that MTI, ESG and the various economic agencies will work hand in hand with our enterprises, TACs and industries to co-create, innovate and unlock new opportunities for growth.

Together, we can overcome as partners in solidarity, forging a new tomorrow where businesses, companies, SMEs and heartland shops will thrive and flourish. [Applause.]

The Chairman: Mr Liang Eng Hwa.

Mr Liang Eng Hwa: Sir, two clarifications for the Minister. Firstly, on the Trans-Pacific Partnership (TPP), which is now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The United States was the original member of the partnership agreement but has since withdrawn under the previous administration. I just want to ask the Minister how does he see the prospect of the United States rejoining the agreement now that they have a new administration.

My second clarification: the Minister spoke about the substance of our recovery. He mentioned that, quantitatively, we may have shown some growth year-on-year but, qualitatively, we have some way to go and may not be out of the woods yet. Can I ask the Minister how would the Government help companies not only to chase top-line growth but also to grow qualitatively or to transform qualitatively? Does it necessitate a different approach in the way we support companies and businesses, going forward?

Mr Chan Chun Sing: Mr Chairman, I thank Mr Liang Eng Hwa for his two supplementary questions.

First, on the issue of the TPP and CPTPP. Recently, I think Members would have heard the interest of the United Kingdom and even China to join the CPTPP. From Singapore's perspective, we welcome all countries who are able to meet the high standards of CPTPP to join us so that we can continue to enlarge the partnership for the benefit of all members and also to have more certainty for a rule-based trading order in the world.

With respect to the US' interest or renewed interest to return to the TPP or CPTPP, at this point in time, I think it would be premature for us to come to any conclusion. Because the United States, they themselves are doing their own internal deliberations as to whether they should rejoin the TPP and if so, how.

We are in communications with our US counterparts. We encourage them to take a fresh look at this agreement, not just from the economic perspective but also from the geostrategic perspective. The response that we have thus far gotten from the US administration is that indeed, they have members within the administration that are open to relooking at the merits of this agreement, from both the economic and the geostrategic perspective.

2.45 pm

Mr Chairman, on the second question that Mr Liang Eng Hwa asked, indeed, quantitatively, with good progress towards the end of this year or the early part of next year, we should be able to get back to the same GDP level as the pre-COVID-19 level, quantitatively. However, qualitatively, as I have mentioned in my speech, the economy would have changed. And I think we can look at it from two perspectives.

The first perspective, many people have talked about a K-shape recovery. And there are two dimensions to a K-shape recovery. One is that, within the whole economy, the K-shape refers to some sectors which will continue to do well and may, in fact, do much better in a COVID-19 environment. These include some in the biomedical sector, the ICT sector. And there are also sectors within the economy that will continue to require help to sustain them through these difficult times. These include the aviation sector and the tourism-related sector. That is the K-shape within the macroeconomy. But there are also K-shape recoveries within certain specific sectors. I take the example of retail as a good example.

Overall, for the enterprises that are in the retail sector, some of them are doing much better than even before because they are able to seize the opportunities and pivot into the online sector. They are able to use the online space to transcend their ability to serve markets beyond Singapore. So, some of the retailers are doing much better, especially the online retailers. But on the other hand, there are also retailers that do not do as well because their models of just being an arbitrage centre would increasingly be disintermediated and be displaced. So, we need to be careful about the forces, both at the macroeconomy and at the sectoral level.

The other qualitative change that Mr Liang Eng Hwa's question alluded to is this. In the past, many of our businesses are very wont and very concerned with controlling their cost structure and, indeed, all businesses must do that. But going forward, beyond controlling our cost structure, there are a few things that are more important – and equally, if not more important – than just controlling the cost structure.

The first and most important thing is how can we get increasing returns to scale by increasing the top line. So, to increase the top line, our companies will need to penetrate overseas markets, use the cyberspace to go beyond Singapore. Second, how do we compete on the basis of our intellectual capital beyond our financial capital or the conventional factors of production, like land, labour and so forth? So, these are important ways that we need to change our mindset of how we compete in the new world, compared to the past. Thank you.

The Chairman: Mr Leon Perera.

Mr Leon Perera: Thank you, Mr Chairman. And I thank Minister Chan and all the MTI officeholders for their replies. I have just one more general point of clarification which I suppose I should direct to Minister Tan See Leng because he talked a lot about the take-up rate for various schemes, like the ESG and so on. So, I think that it is important for us to monitor these take up rates, like the number of firms which have availed themselves of the scheme. I would like to ask the Minister: would he agree that that is not an effort indicator? And effort indicators are important. They are useful and we should measure them. But does the Ministry also measure outcome indicators? What do I mean by "outcome indicators"? At the end of the day, how many of these local companies are achieving a certain threshold in terms of shareholder value, in terms of market share in a particular product category, in terms of absolute revenue signs or so on?

Now, I know that it is difficult to assess causation versus correlation. I know, at the end of the day, the entrepreneur is responsible for delivering outcomes. The scheme is just an enabler or facilitator. But would it not be useful for---does the Ministry actually do this to measure at the end of the day, and we have a pool of local companies who have benefited from various schemes after a certain period of time, X number of these local companies have attained these performance benchmarks and these thresholds, so that we know that we are sort of moving in the right direction, even if it is not possible to pinpoint causation?

Mr Chan Chun Sing: Mr Chairman, I thank Mr Leon Perera for that question. On behalf of Minister Tan See Leng, because this involved the whole MTI portfolio. The answer to Mr Leon Perera's question is definitely yes. We definitely benchmark what we achieve, not just from the input perspective, but from the output and also, most importantly, from the outcome perspective. Indeed, that is my guidance to all the MTI staff and our Statutory Boards that whenever we apply a scheme to any of the enterprises that we intend to help, let us not just look at the input, not just look at the output, but look at the outcome. And, as Mr Leon Perera says – and we agree with him – that the outcome will depend on a multitude of factors. It may not be causal, but it will, at least, give us a sense of whether we are making progress. And that is why, during my speech, I mentioned that, at every point in time, MTI is constantly reviewing our schemes to make sure that we apply the finite resources to the best use in order to grow our enterprise as an eco-system. And where we need to, we will make some adjustments to the scheme. We will prune some of the schemes that are less relevant in order to redirect resources to schemes that are much more in need by the enterprises.

The Chairman: Ms Jessica Tan.

Ms Jessica Tan Soon Neo: I have two clarifications, one is for Minister Tan See Leng who mentioned the point about the review on the ITMs to ensure their relevancy. Is any work being done to also look at the ITMs and the age adjacencies across ITMs because there could be new opportunities and new business models that could be taken up from those opportunities?

The other question is for Minister Chan with regard to his point about not just looking at the sunrise industries, but also a very important focus is also on entrenching and embedding ourselves within the global value chain. Can the Minister also share some of the key priorities in what is being done in this space and where are some of the key focus areas?

Dr Tan See Leng: Mr Chairman, I thank Ms Jessica Tan for the question. The answer to the question is, yes. In fact, we are in the process of reviewing. Obviously, during the pandemic, a lot of the opportunities have also availed themselves in terms of the digitalisation efforts and how we conduct meetings and so on online, to even the review of some of the industry transformational maps with regard to the biomedical and biopharma industry in terms of diagnostics, biotech and so on. So, this would be a more systematic review of how we can look for new cheese and look for new areas in which we can enlarge the spheres of influence around some of these industry transformational maps. And to the extent that is possible, we could even have overlapping areas in which we can find new opportunities to branch into.

So, I think, in time to come, we should be able to update the House a few months into the future. Thank you.

The Chairman: Assoc Prof Jamus Lim. Sorry, Minister Chan first for the reply.

Mr Chan Chun Sing: Mr Chairman, let me answer Ms Jessica Tan's question with a framework and also perhaps to illustrate that with one or two examples.

Why is it so important for us to entrench ourselves in critical niche areas? Now, we have to be honest with ourselves. Given our size, we are unable to compete in all parts of the value chain and, in fact, very few, if any companies or enterprises will try to do that. Then the question we ask ourselves is: given our size, given our capabilities, which part of the value chain can we best entrench ourselves that makes us harder to displace – not impossible to displace; there is no such thing.

So, let us look at the IC chip, for example, the semicon industry. Many people produce many types of wafer fabs, semiconductors and so forth. And we cannot possibly compete in all of them. But there are certain niche areas that we have the capability and where we focus our R&D into those capabilities, for example, the RF modules, so that we can carve out a niche for ourselves in those very specific areas. So, we look for areas whereby we have a competitive advantage, not based on size, but based on our intellectual property.

Recently, I visited the humble mask-making machine when we acquired the capabilities to make the filters so necessary for good-quality masks. We ordered two machines from two different countries. And, lo and behold, as we assembled the machines and as we got to understand the production a bit better, we realised that, common to both machines, there is one particular part in both machines that is the most expensive part. It looks rather innocuous, but it is the most expensive part. It costs about more than 10% of the price of the entire machine. Just a block of metal with 4,000 very fine holes that allow us to make those fibres. And we cannot even see the holes with our naked eye. And that taught us a lesson. We may be buying machines from different countries because everyone wants to diversify their supply chains, and so do we. But that particular country that made that particular part of the machine has captured a very niche area that very few can do. That even if machines come from different parts of the world, they, ultimately, go back to that same supplier. This is the kind of niche areas that we aspire to be in for our industries so that we are in critical parts of the global supply chains that make us hard to displace.

The Chairman: Assoc Prof Jamus Lim.

Assoc Prof Jamus Jerome Lim: Thank you, Chairman. I thank both the Ministers as well as the Ministers of State for their very insightful look at this. In fact, I must say I thoroughly enjoyed, especially the two speeches by Ministers Chan and Tan, and I find myself almost dangerously in unanimous agreement with what they have shared. Now, that said, I will just point out two things.

One is that while I appreciate that the Government has shared that Singapore spends a comparable amount in public expenditure on R&D to countries like Sweden, I should note that the figures I cited were actually for national R&D, which includes spending from private sources. And this is not in dispute, I think. It is from a source with reliable provenance. So, I wonder whether the Government will be willing to share its strategy for perhaps catalysing greater R&D spending by the private sector.

Mr Chan Chun Sing: Mr Chairman, we thank Assoc Prof Jamus Lim for agreeing with us on many things. Let me talk a bit more about how we want to catalyse R&D spending. In fact, indeed, it is very true. The Government cannot always be the one to decide which area of R&D spending that we want to do. Of course, there are areas of basic sciences that we will need to invest because there are very little commercial opportunities at that stage of development. But at the later stages of R&D development or for research and innovation, we will want to crowd in – as Minister Tan See Leng said – we would like to crowd in more private investments in this. And that is why there are different schemes for different parts of the R&D chain. Upstream, for basic science and technology, most of the funding will come, generally, more from the Government sources. But as we go downstream towards the innovation and commercialisation possibilities, we would have to crowd in more of this. That is why, as a strategy, as we go downstream, our funding of many of these initiatives, we would like to have a funding component that sees the private sector participation. The Advanced Remanufacturing and Technology Centre (ARTC) is a good example.

All the companies put skin in the game and the Government chipped in our part as well. This is how we crowd in the thing. The companies come together to define the R&D outcomes that they would like to see and they will also share the outputs that can be derived from the research effort. So, this is the kind of effort that we would like to encourage our private sector to work with the Government, especially in the downstream translation into commercial opportunities. So, it is not the same type of strategies across the entire different parts of the R&D chain. It is also not the same type of strategy for different types of R&D, ranging from biomed to deep-tech, to other e-commerce opportunities.

The Chairman: Ms Foo Mee Har.

3.00 pm

Ms Foo Mee Har: Thank you, Chairman. I have two clarifications for the Minister and Minister of State. Let me start with the first one.

Minister of State spoke about the Tech.Pass programme that was launched. It is attracting strong interest, but I do not believe there was much colour. I did ask quite specifically to give us some colour about the type of entrepreneurs that it was attracting. What are the some of the things they are bringing to Singapore? So, if Minister of State can give a bit more colour about the success of this scheme because I think there is a lot of interest.

The second clarification is for Minister Tan about the nurturing of the deep-tech start-up eco-system. I had asked what is our share of the deep-tech start-up given that Singapore is particularly known intellectual property protection. So, are the start-ups that we are nurturing, are they of the deep-tech type?

Mr Alvin Tan: I thank Ms Foo Mee Har for question with regard to the Tech.Pass. Let me just take a step back and just share a little bit about the Tech.Pass programme and where we are currently.

The Tech.Pass effectively targets a set of very high skilled tech professionals, includes tech founders, leaders and experts. And these professionals would have a track record either in founding or leading sizable tech companies as well as in the development of tech products that has mass adoption.

These tech talents are, as I mentioned earlier on, in short supply globally. Since we launched it in mid-January this year, we have approved about 22 applications for the Tech.Pass, thus far.

Let me just share a little bit about what these tech professionals will do. It is not just in creating jobs for Singaporeans, because when they come here, they bring with them networks as well as their eco-systems and as well as their know-how and technical knowledge. But, they would have to take up lecturing roles in Institutes of Higher Learning. For example, serve on the board of directors of a Singapore-based company; be a shareholder or investor in Singapore companies; and also conduct corporate training or workshops. So, they are going to be deep seated into the tech sector and help us to grow.

But the tech sector is very fast and is very dynamic and so, we will have to monitor how the Tech.Pass is working. Thus far, we currently have 22, but we will have to adjust and see what kind of tech professionals we want to attract in, assess the viability and also assess how they are doing within the parameters that we have set up. So, we will get back to this House when we have more approvals and look at the efficacy as well as the effectiveness of the scheme.

Dr Tan See Leng: I thank Ms Foo for her question. Indeed, we actually have a very vibrant deep-tech, not just the the system but also the culture as well as the entire programme. Perhaps, I could simplify it into three thinking.

First is the knowledge part, the knowledge part of the deep-tech. In the knowledge part of the deep-tech, we have the Autonomous Universities, we have collaboration and tie-ups with international institutions to train and to also collaborate with talent from all over the world, to deepen the research, the development, the research and innovation into many of these deep-technology. For instance, like autonomous vehicles, the 5G networks and so on and so forth.

Then, there is the know-how. In terms of the know-how, we work very closely by expanding our global innovation alliance. As I have alluded to earlier on, we are expanding them from 15 cities globally to 25. We hope to broaden that by also deepening the co-innovation programme, whereby we establish partnerships between our local talent, our local homegrown talent, the talent that we also develop overseas and partner them with talents from from renowned institutions all over the world.

That has resulted also in us bringing companies, as what Minister Chan has alluded to earlier on, in the setup of the Advanced Remanufacturing and Technology Centre and SIMTech over in the Jurong Innovation district. And through the Polytechnics, again through our academic institutions, we have also developed Centres of Innovation, of COIs, to again establish strengthen and reinforce the entire deep-tech culture.

The most important part at the end – so, you have the knowledge, you have the know-how – I think given the fact that we are a very small market, we need to tap globally, we go on to the next step and into the know-who. So, I think it is not just important for you to have knowledge and know-how, someone many years ago, an entrepreneur told me that, "You need to not just have knowledge, you need to know how, but you also need know-who."

For that part, we have the SBF working very closely with the ESG to establish whether it is from the point of view of service centres to guide many of these deep-tech companies – how to gain market access into many of these markets, but at the same time, also to sort of help them to navigate the difficulties of working through the different regulation, the legislature of different countries and so on, to penetrate these markets and gain acceptance.

So, in the entire eco-system from end-to-end, the Government has been involved in developing this deep-tech by providing in a summary: the knowledge, the know-how and the know-who.

The Chairman: Mr Saktiandi Supaat.

Mr Saktiandi Supaat: Mr Chairman, I would like to post a question to Minister Chan. We all know Singapore is now a mature economy in transition, and also our economy is still facing the impact of the global pandemic crisis. I hope we will all not be laud into this false notion that sectors and businesses are all doing well and the economy will be back to the pre-COVID-19 situation. I think Minister Chan mentioned about this earlier on, I just wanted to reiterate a point.

But, there are opportunities to capture value going forward. MTI spoke at at length about the many different strategies to help our economy recover and emerge stronger. These are good but multifaceted. So, among these, Minister Chan, can you help tell us or explain to us how Singapore can be different from others to beat the competition? I think this is very important and very key. Your elucidation will help us all focus on the key areas and most importantly, stay positive for the future.

Mr Chan Chun Sing: Mr Chairman, let me first thank Mr Saktiandi. Indeed, we are in a very challenging economic environment. At this point in time, recovery is far from certain. Uncertainties abound, it is far from business as usual. And we are definitely not returning to a pre-COVID-19 world, as Mr Saktiandi mentioned.

Competition has intensified, it will be more global not local. It will be much more digital not physical. It will not just be about cost and efficiency, but also about resilience and safety. And all these changes will continue to accelerate.

To win, we must move nimbly, move fast, move together. We must distinguish ourselves as a safe harbour for capital talent and intellectual property. We must present ourselves as a trusted hub with long-term policy vision and consistency. We must distinguish ourselves by being able to think much more global and much longer term.

And if we are able to combine all the above with substantive effort to build real and unique capabilities for our country, our enterprises and our workers, I am confident that we will emerge from this crisis stronger than ever before, pull apart from the competition and allow another generation of Singaporeans to have all the opportunities across the world in front of them.

The Chairman: Mr Liang Eng Hwa, would you like to withdraw your amendment?

Mr Liang Eng Hwa: Sir, I thank Minister Chan, Minister Tan See Leng, Minister of State Low Yen Ling and Minister of State Alvin Tan for responding to our cuts. I also want to thank the MTI team as well as the economy agencies for reaching out to our businesses during this very difficult period and helping those they are severely impacted by the crisis. We wish Minister Chan and the MTI team continued success as we position Singapore for the next mile of growth. So, with that, Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $2,139,026,800 for Head V ordered to stand part of the Main Estimates.

The sum of $8,955,686,100 for Head V ordered to stand part of the Development Estimates.

The Chairman : Order. I propose to take a break now.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Mr Speaker: I suspend the Sitting and will take the Chair at 3.35 pm.

Sitting accordingly suspended

at 3.13 pm until 3.35 pm.

Sitting resumed at 3.35 pm.

[Mr Speaker in the Chair]