DPM Heng Swee Keat at the EuroCham Europe Day Luncheon 2019
Speech by Deputy Prime Minister and Minister for Finance Heng Swee Keat at the EuroCham Europe Day Luncheon, on 3 May 2019 at Grand Hyatt Hotel.
Your Excellency, Ms Barbara Plinkert, EU Ambassador to Singapore
Mr Federico Donato, President of EuroCham
Ladies and Gentlemen,
Good afternoon everyone.
It is a pleasure to speak at this year’s Europe Day Luncheon.
We are here to commemorate the 69th anniversary of the Schuman Declaration of 1950 that led to the creation of the European Coal and Steel Community. This marked the beginning of European cooperation and integration after the Second World War, paving the way for the European Economic Community and subsequently the European Union. The EU has come a long way since then to become a region of peace and stability. It is the world’s second-largest economy and the largest trading bloc.
We commemorate this occasion amidst a changing economic and geopolitical landscape. Support for globalisation is waning. Wages are stagnating and people feel that they are being left behind. This has influenced domestic political discourse in many developed economies and populism is on the rise. And the EU is also not immune from such forces. But, at the same time, there is also increasing strategic competition among countries as reflected in the US-China trade tensions, the impact of which is felt across the globe, including in Singapore.
Singapore enjoys robust and long-standing economic relations with the EU
Amidst a resurgence in nationalist and protectionist sentiments around the world, we are glad that the EU has continued to be an important flag-bearer for free trade.
In February, the EU-Singapore Free Trade Agreement and the EU-Singapore Investment Protection Agreement received the European Parliament’s support with a strong majority. This marks a major milestone in Singapore and the EU’s long-standing relationship. It is also an important demonstration to the global trading community that the EU and Singapore is committed to maintaining the rules-based multilateral trading system.
The EU-Singapore Free Trade Agreement will bring about significant benefits for businesses. To name a few, EU companies will have more opportunities to participate in our public tenders, enjoy greater market access and face fewer technical barriers to trade. The agreement will also allow Asian food products such as Hainanese chicken rice mix and sambal ikan bilis (spicy crispy anchovies) to be exported to the EU markets.For many Singaporeans who love food, and who are living in Europe, I think this will be a great motivation for them to spend more time in Europe.This is good news for both Singapore food producers and Singaporeans working abroad who miss Singapore food, and I hope for many Europeans who go back and still miss Singapore food.
We look forward to the expeditious entry-in-force of the agreements which will bring the EU and Singapore closer together, and create good jobs and opportunities for our peoples.
European companies have a long presence in Singapore. For example, Siemens’ presence dates back to 1908, with the opening of a sales office in search of new business opportunities in the British colony. Since then, it has grown with Singapore. To leverage the substantial opportunities in urbanisation and industrialisation that are rapidly rising in Asia, Siemens launched its first fully integrated Siemens Digitalisation Hub in Singapore, in 2017. Driven by digital experts, the Digitalisation Hub will develop innovations for the Internet of Things, and complement our efforts to become a Smart Nation. It will also be very useful for our projects with the 26 ASEAN cities to develop smart cities and hopefully we will also begin to do that with a city in China.
European companies have also played an important role in transforming our industries. The Economic Development Board (EDB) and leading global technical service provider TÜV SÜD developed the Singapore Smart Industry Readiness Index in 2017. The diagnostic tool helps companies evaluate their readiness for Industry 4.0. To date, EDB has partnered TÜV SÜD to roll out the tool to over 150 companies with a significant manufacturing presence in Singapore. TÜV SÜD provides 1-to-1 consultation with onsite assessment to companies who have an interest in transforming their operations with advanced manufacturing technologies.
Singapore also enjoys robust and long-standing economic relations with the EU. We hope to continue to grow this relationship in the years to come.
Towards a deeper EU-ASEAN cooperation
The EU and ASEAN share many common positions on issues. Both seek to integrate the economies of their member states into a single market.
It is projected that by 2030, the 10 economies of ASEAN will become the fourth largest in the world, with the size of the middle class doubling.
The EU is the largest investor in ASEAN and in Singapore. The rapidly growing market in Asia presents opportunities for even greater collaboration between the two communities.
We hope that the EU-Singapore Free Trade Agreement acts as a pathfinder to agreements with other ASEAN member states, and eventually an EU-ASEAN Free Trade Agreement.
Three Key Thrusts to build Singapore as a Global-Asia Node of Technology, Innovation and Enterprise
The centre of economic gravity is shifting, as many countries in Asia are now realising the importance of economic growth. Major countries with the world’s largest populations like China and India are transforming itself and welcoming economic development, while bigger economies like Japan have already been industrialising for many years.
The global economic weight is likely to continue shifting. We hope that Singapore can continue to play a role in this.Singapore will continue to position ourselves as “Asia 101” for global MNCs, like many of the businesses here, who are looking to expand into Asia’s growing markets.
The rule of law, protection of intellectual property and agreements we have with the EU on investment protection will serve as important base to assure companies that we stand by what we say and do what we are committed to. As an Asia 101 that is situated in the heart of this region, where many of you are already basing operations for South-East Asia and Asia in Singapore, I hope we will continue to serve you well.
Let me touch on the three key thrusts Iaid out for the broader economic transformation. First, we will invest in research and innovation, and build a vibrant start-up eco-system to harness these new ideas. Second, we will invest in our people to empower businesses with a skilled workforce. Third, we will build global partnerships and ensure that we have a conducive environment for businesses to flourish.
I will now elaborate on these three points.
Investing in research and innovation, and building a vibrant start-up eco-system
First, on research and innovation. We have been investing significantly in research and innovation by our universities, research institutions and firms, and we will continue to do so.
We have set aside $19 billion as part of our five-year Research, Innovation, and Enterprise 2020 plan. Through our investment, we have built a deep base of science which is now ripe for commercialisation.
We have established various ways for Singapore and international companies to co-develop technologies with our universities and research institutions. For example, corporate laboratories in universities allows companies to tap on their scientific and technological capabilities to develop new products and services. Rolls-Royce@NTU Corporate Lab is an example of a collaboration that has been established between Rolls-Royce and Nanyang Technological University since 2013. The Corporate Lab focuses on research in energy delivery systems, manufacturing technologies for power systems, and data analytics for equipment and processes to inform business decisions.
The start-up ecosystem in Singapore is also an exciting one. Singapore covers over 40% of start-up deal flow in ASEAN. Block 71 is home to over 250 start-ups, 30 incubators, accelerators and venture capitalists.
Another example is Unilever Foundry, a co-working space located at Mapletree Business City for start-ups, investors and Unilever employees to drive innovation and new business partnerships. We will continue to partner corporates in creating, incubating and scaling new ventures. We hope to grow a new generation of new ventures which are globally headquartered in Singapore, to take advantage of the growth of Asia.
Empowering businesses with a highly skilled workforce
Second, I would like to emphasise our commitment to investing in our people. Building deep skills is an integral component in each of our Industry Transformation Maps. Co-created by employers, industry associations, education institutions, unions and the government, the skills framework creates a common skills language to support the design of training programmes for skills and career development.
The skills that our workers require are constantly evolving. Businesses like yours are well-placed to play a vital role in training and redesigning jobs for workers. A positive example is Prudential Singapore. Prudential partnered SkillsFuture Singapore in 2018 to help its employees acquire the skillsets needed for the insurance industry.
As of June 2018, more than half of Prudential’s employees have enrolled in SkillsFuture Advice sessions, where they learnt how to tap on the resource and tools curated by the insurance industry. Courses include innovation, entrepreneurship, data analytics, social media and cyber security.
Indeed, workers themselves must also embrace upskilling and reskilling to stay relevant. The $500 SkillsFuture Credit aims to help individuals get started on their skills development and lifelong learning journey. The results have been encouraging. The percentage of residents in the labour force who took part in training grew from 35% in 2015, to 48% in 2018.
With the support of companies and increasing receptiveness of the workforce towards upgrading their skills, I am positive that we can continue to develop a highly skilled workforce to support the shift to greater value creation.
Creating a conducive environment for businesses to thrive
Third, we will continue to build global partnerships and collaborate with countries in the innovation space.
In 2017, MANN+HUMMEL Group, a leading global filtration specialist, opened its first Asia Pacific Headquarters for Intelligent Air Solutions in Singapore.
In 2018, German specialty chemical firms Evonik set up its first Asia research hub in Singapore.
In 2019 and beyond, we hope to see more European companies leverage Singapore’s position as a Global-Asia Node of Technology, Innovation and Enterprise to access new opportunities and achieve sustainable growth.
Earlier, Ambassador Plinkert mentioned sustainable growth. Indeed, sustainable growth is something that is close to the heart of Singapore. As a little island state, when sea level rises, we have to take it seriously. We are investing and looking at what we need to do to protect ourselves better, and to keep Singaporean green and sustainable in many ways. We are doing a lot now in promoting green and sustainable infrastructure projects which are well-designed and well-executed. This is why we set up our Infrastructure Asia office. Many of the things we try in Singapore, for instance in health and bio-medical sciences, will be very useful to other countries in the region because our population genetics is very close to that of the whole of Asia. There is a lot of scope for us to be testbeds for new innovations.
While we build global connections and train our workforce to be future-ready, it is equally important to ensure that Singapore remains attractive as an investment destination.
At the core of our fiscal system is our commitment to keep the overall tax burden low. A competitive tax regime helps us to attract and retain investments and talent.
We also provide support for businesses to innovate and scale up. In this year’s Budget, I extended writing down allowance for acquisition of qualifying intellectual property rights by five years, and extended the 100% Investment Allowance under the Automation Support Package by two years.
We will continue to plan ahead for the future, and ensure that Singapore remains an attractive destination for businesses to thrive.
In conclusion, we trust that the robust and long-standing economic relations between Singapore and EU, the development of Singapore into a Global-Asia Node of Technology, Innovation and Enterprise linked up with all the key nodes around the world, the availability of a skilled workforce and competitive tax regime will create a conducive environment for your businesses to flourish.
I would like to take this opportunity to express my appreciation to Eurocham and the EU Delegation in Singapore for your role in fostering closer relations between Singapore and the EU. There are many ambassadors here who are active champions of closer relations here. Thank you very much. I also appreciate the strong support of the European business community for the EU-Singapore Free Trade Agreement and the EU-Singapore Investment Protection Agreement.
I look forward to greater economic cooperation and strengthening of Singapore-EU relations in the years ahead.
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