Speech by Prime Minister Lee Hsien Loong at Sequoia Capital Annual Retreat, 14 January 2011 at St. Regis Hotel

Don Valentine, Founder of Sequoia Capital

Michael Moritz, Partner, Sequoia Capital

Members of Sequoia Capital

Ladies and Gentlemen

1.        Thank you for inviting me to your annual offsite retreat

 a.          Happy you are meeting in Singapore

2.        Relationship between Sequoia Capital and Singapore goes back a long way

a.          Thank Don for our excellent ties and cooperation

b.          He told Mr Teo Ming Kian of his “love affair with Singapore”

c.          He said Singapore and Sequoia are united by a common purpose, of ‘creating value by identifying and seizing opportunities’

d.          Many chances to work together to seize opportunities in Asia

3.       Asia is bright spark in a world recovering from turbulence and recession

a.         China and India are growing strongly, and acting as twin engines for the region

b.         Southeast Asia nations are doing well, but are also having to upgrade and band together to remain competitive

i.          e.g. roadmap to become ASEAN Economic Community by 2015

4.       Some medium term concerns

a.         Growth and trade imbalances causing tensions

i.          Disputes over exchange rates, which fortunately fall short of currency war

b.         Danger that countries will clash over trade

i.          Thankfully countries have avoided the worst protectionist moves

ii.          Also made a few positive steps – KORUS and TPP

iii.         But need to remain vigilant – with workers worried about jobs, governments under pressure to raise trade barriers

c.          Asia risks over-heating economies and inflation

i.          Property, fuel and food prices have gone up sharply

ii.          Governments across region grappling with property booms and rising costs of living

5.       But expect economies to overcome these challenges

a.         Transformation in Asia will continue for decades

b.         Key to this is talent

i.          Shanghai topped 2009 PISA tests

ii.          India did not participate, but its population is young, bright and eager to learn

c.          These talents will value-add to both local and foreign companies, and fuel new, innovative enterprises

d.         They will sustain Asia’s development and vibrancy for at least another generation

6.       Singapore benefiting from region

a.         Strong recovery in 2010 – 14.7% growth

b.         Expect to revert to a more measured 4-6% growth this year

c.          Target 3-5% in the long term

i.          Ambitious target requiring significant effort

7.       Critical to raise our productivity

a.         Only way to sustain higher earnings

b.         Must upgrade workers to stay ahead

c.          Will spend $5.5b over next five years on productivity efforts

8.       Beyond this we have to make full use of talent and technology

a.         Talent

i.          We attract many very talented people, to study, work and hopefully settle here

(1)        Professionals – free inflow, even though we need to limit foreign worker population

(2)        Systematic effort to recruit very bright students from region, e.g. foreign students make up half the top scorers in ‘O’ level exams this year

ii.          We are also investing in our schools, polytechnics and universities to groom technological talent

(1)        Polys offering courses on computer programming, animation and games design

(2)        SIT for polytechnic students to earn specialised, technical degrees later

(3)        SUTD in collaboration with MIT and Zhejiang University

b.         Technology

i.          Raising R&D spending from 3% to 3.5% of GDP

(1)        Government will invest $16b over next five years

(2)        Singapore’s advantage is that we can sustain funding commitment over the long term, across business cycles

ii.          Campus for Research Excellence and Technological Enterprise (CREATE)

(1)        Brings together research centres of universities and corporations from all over the world – MIT, UC Berkeley, ETH, Technion, Ben Gurion University, etc

(2)        Ecosystem to germinate and grow new ideas

c.          Result

i.          We do not yet have a eBay or Google, or Alibaba or Baidu

ii.          But many interesting activities, and much ferment and exchange

iii.         Will provide fertile ground for entrepreneurs, our own and from the region, to start up and grow

9.       Singapore aims to be a high tech, high performance society

a.         Operating at “high clock rates” and applying multiple processing to find breakthrough solutions

b.         Environment has encouraged high tech companies, including IT firms like Facebook and Groupon to open offices here (Groupon in fact bought over a local start-up, Beeconomics)

i.          To tap on Singapore’s resources and talent

ii.          To ride on Asia’s growth

c.          Welcome Sequoia Capital’s portfolio companies to help develop Singapore into a vibrant and distinctive global city

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