DPM Heng Swee Keat at Industrial Transformation Asia-Pacific (ITAP) 2023

DPM Heng Swee Keat | 18 October 2023

Opening remarks by Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat at the Industrial Transformation Asia-Pacific (ITAP) 2023 on 18 October 2023.

Dr Norbert Riedel, Ambassador of the Federal Republic of Germany to Singapore
Ladies and gentlemen,

Very good morning, and a warm welcome to the 6th edition of the Industrial Transformation Asia-Pacific, or ITAP.

Let me first thank Ambassador Riedel for his warm words. As Coordinating Minister for Economic Policies, I have seen how well German industry and companies have transformed themselves and equipped their workers with the right skills and competencies to adapt to a more technologically advanced world.

You have also heard the comments by Mr Arno Reich and Mr Paul Lee on how ITAP has grown in scale and impact and what you can look forward to this year.

Since 2018, ITAP has grown to become a trusted and useful platform to connect global manufacturers and suppliers with new markets, customers and partners from the Asia-Pacific region. 

This has unlocked significant cross-border collaborations and co-innovations that have helped to push new frontiers in manufacturing.

This year’s edition is set to be the largest since the COVID pandemic, with more than 300 exhibitors and over 18,000 attendees.  

This strong turnout reflects a growing appreciation of the value of manufacturing in a dynamic global economy.

So I hope over the next 3 days, your interactions with each other can spark off new ideas to take the manufacturing sector forward towards a more sustainable, resilient and efficient future.

The global economy in 2023 faces challenging headwinds, with implications across all sectors including manufacturing.

Geopolitical tensions accompanied by geo-economic fragmentation, as well as the long-term consequences of the COVID pandemic and the war in Ukraine, continue to dampen growth. 

The International Monetary Fund has projected global growth to contract from 3.5% in 2022 to 3% in 2023.

Volatile global demand and continued supply chain disruptions have led to a decline in industrial production and output in recent months, including in the US, Asia and Europe, accompanied by a weakening of global trade flows.

Nonetheless, manufacturing remains an important backbone of the global economy.

During the pandemic, the sector provided access to essential goods for populations around the world, from food products to medical equipment and pharmaceuticals.

With the close linkages to other sectors, the manufacturing sector has strong multiplier effects across the entire economy.

In short, manufacturing not only makes goods, but also does good.
As a contributor of around 17% of global GDP, it plays a critical role in accelerating development and promoting broad-based prosperity.

In Singapore’s case, specifically, manufacturing accounts for around 20% of GDP.  It is now over $130 billion and we aim to grow this to around $160 billion by 2030.

At last year’s ITAP, I launched the refreshed Industry Transformation Maps, or ITMs, for five manufacturing sectors to boost resilience and seize new market opportunities. 

We have made good progress. The manufacturing sector added 4,400 jobs in the first half of 2023.

The vibrancy of the global economy, including for manufacturing, lies in innovation. 

Indeed, manufacturing has historically been a springboard for innovations that have been game-changers for global economic and technological advancement.

Each of the past 3 industrial revolutions kick-started breakthroughs – steam, electrification, and digital computing – that accelerated human development and made the world more connected, safe, healthy and prosperous.

Today, we are well into the 4th Industrial Revolution. 
We are witnessing new technologies being developed at breakneck pace, such as in advanced robotics, gene editing, clean energy and artificial intelligence.

This time last year, few of us were talking about Generative AI. Today, Generative AI promises to transform the way we live, work and function.

Even in these early days, one thing is clear – we have the responsibility and ability to shape the impact of Generative AI, to ensure that it has positive transformational outcomes on individuals, businesses, industries and societies.

The same is true for other transformations taking place in industry – we must collectively harness the creative energies and innovations of this latest revolution for wider benefit for people.

Let me outline three particular kinds of innovation that the manufacturing sector should prioritise.

First, to innovate for performance.

One of the key lessons from the COVID pandemic is the importance of investing in efficiency and connectivity to reinforce supply chain resilience.

In an era of disruptions, rising costs, and geopolitical uncertainties, becoming smarter and more connected will help the manufacturing sector reduce risks and tap on growing opportunities in new growth areas and regions, including in Asia. 

In the hyperconnected world of Industry 4.0, no single manufacturing base is an island.

Rather, each country is a node, whose connection and connectivity with other nodes will shape the pace of progress, and prosperity, globally.

The ability to develop smart and interconnected value chains therefore becomes a significant competitive advantage.

Stakeholders in manufacturing should therefore work with partners to invest early in resilient value chains.

For example, Singapore’s Agency for Science, Technology and Research, or A*STAR, and TÜV SÜD have collaborated to develop Resilience+, a comprehensive assessment framework to help companies make science-based decisions for stronger supply chain resilience.

Resilience+ will allow companies to mitigate risks more effectively and develop capabilities to build resilient supply chains that can better withstand and overcome disruptions.

A*STAR is also working with Institutes of Higher Learning to develop a Distributed Smart Value Chain programme to enable manufacturers to come together and swiftly respond as a connected value chain to demand and supply fluctuations. 

Supported by a combination of secure platform technologies, AI-enabled algorithms, and hardware changes, this novel approach will allow manufacturers to make business decisions as a value chain and reconfigure production sites to capitalise on business opportunities that they might not have been able to take on as individual entities.

Targeting companies with multi-site operations as well as those looking to enhance their manufacturing operations, this programme will help increase the competitiveness and resilience of manufacturers in Singapore and beyond.

Second, to innovate for the planet.

We must all do our part to tackle climate change. 

Today, manufacturing and production accounts for one fifth of global carbon emissions.

The sector must do its part, to accelerate the global green transition, by working towards greater circularity, lesser and cleaner energy consumption, and reduced waste.

As a low-lying island state, Singapore is acutely vulnerable to the impact of climate change. We have therefore made sustainability an overarching priority.

The Singapore Green Plan 2030, launched in 2021, lays out a broad vision for a whole-of-society effort, including industry, to transform towards a lower-carbon footprint with improved efficiency and greater circularity.

While our own individual carbon footprint is small, the innovations that we are pioneering can serve as pathfinders to greater momentum on global climate action.

For example, A*STAR is working with partners to build a circular economy for batteries, to give retired Electric Vehicle (EV) batteries a second life.

This is salient as retired EV batteries are expected to become more common with the rising electrification of transportation. 

Being able to effectively remanufacture them will support the move towards net zero manufacturing.

One important enabler is an EV battery testing and disassembly line that A*STAR’s Advanced Remanufacturing and Technology Centre has built in partnership with McKinsey & Company. 

It leverages technologies such as automation, robotics, intelligent vision inspections and diagnostics to demonstrate how large volumes of EV battery packs can be safely and efficiently disassembled.

Third, to innovate for people.

To transform into Industry 4.0, the manufacturing sector must attract and retain the best talent – those with the scientific know-how but also entrepreneurial instincts, as well as an attitude of resilience and relentlessness.

Companies must therefore collectively seek to strengthen their talent pool to ensure a future-ready industrial sector.

Central to this is putting in place clear and compelling talent development pipelines and opportunities to motivate and excite young talent, in particular, to build a career in manufacturing. 

Importantly, talent must be able to see the impact of their work and contributions and have a pathway for their professional development.

With this in mind, Enterprise Singapore, a Singapore government agency, has implemented the Global Ready Talent Programme.

This supports companies with progressive human resource practices to hire and train graduates from the Institutes of Technical Education, polytechnics and universities for various roles, through internships and overseas work opportunities.
Approximately 900 engineering internships have been secured this year under this programme.

For example, JM Vistec, a machine vision component distributor and specialist, was successfully matched with 6 graduates from the Singapore Institute of Technology and the Institute of Technical Education.

Given the scale of the opportunities and challenges, to successfully make the transition to Industry 4.0, we need partnerships and collaboration – across individual companies, across the public and private sectors, across sectors and across borders.

As we enter a world of increasingly advanced and precision manufacturing, complex products will require global and cross border connectivity.

To build this connectivity, we must strengthen linkages across the world.  

Complete self-sufficiency is neither desirable nor possible, and we must resist the temptation to enact protectionist industrial policies.

In the face of structural changes in the world economy – brought about by new technologies and trends such as climate change and aging populations in advanced economies – the priority should instead be to encourage businesses to adjust and stay competitive and assist workers and talent to refresh their skills to preserve relevance.

In 2022, Singapore attracted a record US$16.4 billion in Fixed Asset Investments driven by exceptional inflow of large manufacturing projects in the electronics sector.

This is testament to the confidence that global companies have in Singapore, as a neutral and trusted venue to access global talent, capital and markets. 

At the same time, it also reflects the view among our partners of the importance of maintaining an open global economy.

In the long run, countries still need to compete based on their competitive advantages. 

A global manufacturing ecosystem that taps on the strengths of interconnected countries and regions will ultimately be more stable and prosperous.

Countries must therefore commit to strengthening cross-border value chains and collaboration.

This will not only create good and meaningful jobs for our people, but also support the growth of a vibrant, competitive and cutting-edge global industrial sector internationally.

The Jurong Innovation District in Singapore, for example, hosts a collaborative ecosystem of research institutes, technology enablers and companies to testbed and implement advanced manufacturing solutions such as the EV battery testing and disassembly line that I mentioned earlier.

As a Global-Asia node of technology, innovation and enterprise, Singapore is also working with partners from the region and beyond to build capabilities and a development pipeline especially for young talent.

In this regard, I am pleased to see that Singapore Polytechnic is signing a Memorandum of Understanding with the Malaysian Research Accelerator for Technology and Innovation later this morning, to collaborate on promoting technopreneurship and innovation among students in both countries, with a focus on sustainability.

In closing, let me reiterate ITAP’s value as a platform to convene a diverse and inclusive group of stakeholders, to promote collaboration and co-innovation across different manufacturing verticals.

This year, we are also showcasing the largest-ever Singapore Pavilion, with 52 local companies and solution providers exhibiting their latest manufacturing and digitisation capabilities.

Industry associations including the Singapore Manufacturing Federation and Singapore Semiconductor Industry Association are also assembling business delegations to visit ITAP.

I am pleased to hear that ITAP aims to facilitate more than 1,200 business matchings this year, a 40% increase from pre-pandemic levels in 2019. 

This speaks to the unmatched value of face-to-face engagement in building fruitful collaborations.

I encourage all of you here to make the most of this opportunity to network and learn more about each other’s products and innovations and explore how you can work together to build an innovative, resilient, and purposeful Industry 4.0 in the years ahead. 

Thank you.