Assoc. Prof. Yaacob Ibrahim, Parliamentary Secretary for Ministry of Communications & Information Technology - Speech SSA - Berita Industry Seminar Series
Assoc. Prof. Yaacob Ibrahim, Parliamentary Secretary for Ministry of Communications & Information Technology - Speech
SSA - Berita Industry Seminar Series
Singapore, 14 February 2001
Good morning, distinguished guests, ladies and gentlemen.
In Singapore's economic development, SMEs have always played a vital role. Broadly speaking, SMEs constitute 92% of all establishments and employ about half of the working population.
They are also a critical source of support for the larger industries. In the transition to knowledge based economy, SMEs should continue to tap on the opportunities ahead and strive to overcome the challenges.
The business environment has changed dramatically and SMEs today are very different, compared to what they were 10, 15 years ago. In this new setting, SMEs have to stay dynamic and keep pace with the rest of the economy. As an illustration, about 16,000 SMEs have already developed some form of e-commerce capabilities. Today, many small enterprises such as departmental stores, florists and catering services have gone online to ride the wave of consumer demands. Recently, Kafe123.Com went online to prove that coffee shops do not have to stick to traditional business practices to grow.
According to the 1999 IT Household Survey, 59% of the households own a personal computer and 42% have Internet penetration. These figures reflect the increasing use of IT by the public. Inevitably, customers and suppliers will increasingly use the Internet to buy and order products and services.
For the Malay business community, we must adopt a developmental mindset and create value for themselves to be vibrant entities. To avoid being left behind, the Malay SMEs must similarly re-invent and renew their business strategies. There is an urgent need for us to adapt to change and embrace e-commerce to stay ahead in the competition.
Rapid Change in Technology
Clearly, there will be many challenges in our venture into the world of technology. But we must surge ahead and harness the technology to ensure continued growth. Information technology has paved the way for greater globalisation of businesses and has become an indispensable tool for many companies in their daily operations.
Technology is changing very rapidly and businesses are increasingly conducted on the Internet to tap on the potential benefits. Local companies have to move faster to acquire technology and engage in research and development to enhance their products and services. This will be a constant change SMEs have to tackle head on. Companies that can adapt freely will continue to thrive. Realising this, more than 700 SMEs have sought assistance in e-commerce adoption under the Local Enterprise Electronic Commerce or LECP (EC) Programme since 1998.
Another major challenge for the Malay SMEs is shifting away from the domestic-oriented sector. I wish to reiterate the oft-said slogan, "Think Global and Act Local". In the infocomm terminology, this is now known as "B2-4B, or expanding business to reach out to the world population of 4 billion people. The Malay SMEs need to understand the importance of this message. Local SMEs know the status of the market and can act much quickly than the larger corporations.
For this, I encourage the SMEs to be alert to strategic alliances and partnerships. To be successful in the globalised economy, greater business collaborations are essential for mutual benefit. Through these collaborations, SMEs will gain knowledge of business models and technologies.
But as they grow and expand, the SMEs should stay focused on their core strengths. E-Commerce offers exciting opportunities. Everyone has to jump on the bandwagon to stay relevant. However, when the SMEs do so, they must not stray away from what they are good at. In other words, they have to channel resources and energies to what they know and do best in the local market, and propel that into the global market. It will be a valuable learning experience for them to find out their comparative advantages.
With the pervasive use of the Internet, electronic commerce offers great opportunities and benefits to those who embrace it. According to the 1999 SME Electronic Commerce Study by PriceWaterHouseCoopers, going online will enable SMEs to have access to new markets, gain better business knowledge and attract investments. E-Commerce allows SMEs to reach wider customer base rather than limited domestic market. They can sell to ten million people instead of just ten thousand consumers.
As I pointed out earlier, Internet has empowered the consumer and SMEs are more flexible to respond to consumer demands quickly. This will be a differentiating factor for the SMEs at regional and global levels.
Information is an empowering tool. With e-commerce capabilities, SMEs can reduce their expenditure on gaining information. Through better business knowledge, the potential of business-to-business can be tapped for the future. E-commerce also improves the business operation thus enabling the SMEs to attract investment for research and development.
Currently, the Government offers more than 60 programmes in the form of loans and grants, tax incentives and upgrading assistance including training programmes offered by the various Government agencies.
The Productivity and Standards Board (PSB) hopes to help the SMEs to attain growth through its programmes and schemes at various levels in different sectors. Toward this goal, PSB announced its strategic master plan, SME 21, last year. A 17 - member committee has been formed to ensure successful implementation of this plan. Under this plan, PSB plans to bring at least a third of all SMEs adopt e-commerce by 2003.
Apart from this wide range of programmes and schemes aimed at helping SMEs through enterprise level, sector level and broad-based strategies, Infocomm Development Authority of Singapore (IDA), together with PSB, has also introduced a $30 million incentive programme, called e-Business Industry Development Scheme or eBIDS. eBIDS is an addition to the LECP (EC) programme that has assisted more than 700 SMEs. IDA has also put in place Critical Infocomm Technology Resource Programme (CITREP), Strategic Manpower Conversion Programme (SMCP) and Skills Redevelopment Programme (SRP).
Therefore, help is always available to drive the SMEs forward and compete in the wider world.
In conclusion, it is clear that Malay SMEs must think of long term benefits and embrace technology to ensure survival in the New Economy. More importantly, companies cannot adopt a wait-and-see attitude but instead move quickly to reap the benefits of information technology. They must also think global and brand themselves for what they are famous for locally. The opportunities are vast to create value, gain market share and forge partnerships to grow.
To facilitate and catalyse the move towards e-commerce, the various Government agencies are offering many programmes for SMEs to become e-commerce enabled.
This seminar series, organised by the SSA Consulting Group and Berita Harian, is another step forward in educating and encouraging the SMEs. I urge the Malay community to organise and participate in similar seminars to stay ahead and continue to contribute to the economy of Singapore.
I wish every success for the seminar series.