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Internet Business Expo

Mr Lim Swee Say, Minister of State for Trade & Industry and Communications & Information Technology Speech - Internet Business Expo

Mr Lim Swee Say, Minister of State for Trade & Industry and Communications & Information Technology
Speech - Internet Business Expo
Singapore, 1 September 1999


Good morning.

1. It gives me great pleasure to join you this morning at this Internet Business Exposition.

2 We are in the midst of an e-Revolution, a revolution brought about by the Internet. This revolution is forever altering the way businesses operate, the way they compete, and the relationships between suppliers and customers.

3. Ford Motor is a good example. A couple of weeks ago, one of its subsidiary companies conducted an online bidding exercise for the supply of circuit boards through the Internet. Those who participated in the bidding had been pre-selected from about 100 suppliers globally. They were able to see prices being posted for particular items, and to submit their bids in real time. A total of US$150m worth of new contracts was awarded to component suppliers from all over the world in this exercise. The exercise was a success, and the company now intends to source for quotations and conduct design contests as well on the Internet in future.

4. Ford Motor's experience in e-Commerce and on-line bidding is not an isolated business example but a growing trend in the global economy. This trend will have two major implications for businesses, large and small, all over the world.

5. First, companies can no longer afford not to embrace e-Commerce. This is because sales will continue to shift from traditional channels to the Internet. Basically, for every part and component obtained through open bidding on Internet, there is probably one part and component less being obtained through traditional channels. Research conducted by Jupiter Communications USA concluded that only 6 per cent of online commerce in 1999 would represent incremental sales. In other words, the high growth of e-Commerce is being achieved mainly by taking away business transactions from traditional sales channels. Simply put, companies that do not embrace e-Commerce will lose more and more of their existing customers to online competitors.

6. The second major implication of e-commerce is that competition will be so global and intense that companies will have to improve their performance in every aspect of their entire business value chain if they want to remain competitive. To win any of the on-line contracts, the suppliers will have to commit to delivering parts and components to specified locations, at specified times, and meet required design and quality specifications, all at the lowest prices. There will be no room for error or inefficiency. While Internet has opened up the global market, companies will have to re-engineer and innovate constantly to tap new and growing markets. They will have to streamline their internal systems and integrate them with their business partners so as to reduce costs, enhance quality, and shorten turnaround time.

Singapore Is Geared Up For E-Commerce

7. In Singapore, we recognise that technology is neutral. The rapid growth of e-Commerce presents both threat and opportunity. Our challenge is to embrace technology quickly, before the competition does. Our aim is to position Singapore as a major e-Commerce hub, as has been articulated in the e-Commerce Masterplan that was launched last year.

8. We are making good progress in creating a supportive environment for e-Commerce to flourish. We have strengthened our legal framework with new legislation such as the Electronic Transactions Act. We have also deployed new infrastructure services such as Digital Certificates, which are aimed at enhancing the reliability of online transactions and payments. We will continue to improve the overall business environment under the ICT 21 Masterplan presently being formulated.

Accelerating E-Commerce Adoption through Establishment of "E-Business Communities"

9. On the whole, we are seeing progress in the adoption of e-Commerce in businesses. A recent survey commissioned by the NCB to gauge the level of adoption of e-Commerce in eight industry sectors revealed that one in ten companies were already transacting on the Internet. However, two out of three companies were not aware of, and did not see the need, to engage in e-Commerce. Some of them cited start-up costs and on-going operational costs as reasons for not going into e-Commerce.

10. But the key issue companies should be concerned with is not so much whether they can afford to introduce e-Commerce, but whether they can afford not to introduce e-Commerce. We need to find ways to speed up the adoption of e-Commerce by our businesses, and increase the level of adoption from the current 9 per cent to about 20 per cent within the next couple of years. One core strategy we have identified, and will pursue aggressively, is to promote the creation of what can be called "e-Business Communities". This involves the Government working closely with major players in various economic sectors to nurture the growth of common business platforms for each sector. This makes good sense as opposed to facilitating individual companies to adopt e-Commerce. Over time, these e-Business Communities can be expanded to become regional or even global platforms, and so help to strengthen our position as a leading e-Commerce hub in Asia.

11. I am therefore pleased to announce that the MCIT is embarking on an e-Business Community Programme. We will work with various industry bodies and business associations to create 10 to 20 such e-Business Communities over the next two years. We will support the creation and growth of these e-Business Communities through a package of incentives, including the Innovation Development grant, Cluster Development fund, and Local Enterprise Computerisation Programme for e-Commerce. I hope many early adopters in the various business sectors will come forward to take full advantage of these incentive schemes, and help speed up the growth of online business communities in Singapore and in the region.

Conclusion

12. Today, I am glad to witness the launch of a regional business-to-business e-marketplace for the Asia-Pacific region by NCS. NCS aims to bring another 1000 companies to trade online. I want to congratulate NCS on this achievement. This e-marketplace will help speed up the development of Singapore as an e-Commerce hub in the region. I am in particular pleased to note that it will offer a complete set of solutions and services for enterprises, including SMEs, to assess to a global trading web 24 hours a day and 365 days a year.

13. In closing, I want to emphasise again that the pace of change for e-Commerce is fast, fast enough that there may come a time when a company will either have to embrace e-Commerce or not be a viable company at all. To be left out of e-Commerce will be like trying to compete for global businesses without having a telephone line. Companies that ignore the threat and opportunity of e-commerce will risk becoming irrelevant to their customers and business partners. We look forward to working closely with businesses in all key sectors of the economy, to embrace e-Commerce fully, and to establish Singapore as a leading global e-Commerce hub in the Asia Pacific.

14. I wish you all every success at this Internet Business Exposition. Thank you.

LAST UPDATED: 13 MAR 2023