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The Singapore Infocomm Industry - Creating the Next Wave of Growth

Mr David T E Lim, Acting Minister for Information, Communications, and the Arts - Speech Connected Singapore Launch Event, Raffles City Convention Centre ...

Mr David T E Lim, Acting Minister for Information, Communications, and the Arts - Speech
Connected Singapore Launch Event, Raffles City Convention Centre

Singapore, 26 March 2003

1 The ICT industry in Singapore is poised for the next wave of growth. What it needs is a new direction.

2 Over the past twenty years, we have transformed Singapore into an Intelligent Island. We built infrastructure, enacted laws, developed skills and capabilities, and designed and implemented application systems. We reached out and got the masses to understand and use IT. We freed up the telecom market for full and robust competition.

3 Singapore is now ranked the third most network-ready country in the world according to WEF's Global IT Report for 2003. ICT is one of our key competition advantages. We have arrived at the destination we charted twenty years back.

4 The challenge now is to go beyond this success.

5 MITA's vision beyond an Intelligent Island is to build a Creative and Connected Singapore. To do this, we need to go beyond our previous achievements. I would like to share with you four things that we can do. I call this the "three beyonds".

6 But first, let us take stock. The World Economic Forum Global IT Report 2003 calls infocomm "a critical catalyst for social transformation and national progress". Indeed, we see the results of all this in Singapore. All the major infocomm players are in Singapore. They are a valuable source of new technology, innovation, markets and jobs. Local companies have grown up alongside. Together, they have grown our ICT industry to 7.9% of GDP, and built expertise in areas like banking & finance, transport & logistics, and e-Government. Many of you contributed to this success.

7 But as we look towards the next phase of development, 3 thrusts in our growth to-date stand out.

8 Firstly, since the government created the National Computer Board in 1981, it has invested billions in infrastructure, ICT training programs, application systems, and grants for research and business development. Industry benefit from the large scale contracts to build the civil service computerisation program and e-government projects. In short, the government has led capability development.

9 Secondly, ICT growth has been driven by large applications of technology, such as in e-government, or in sectors that deploy ICT on a large scale, such as in banking, logistics, manufacturing and publishing. Large enterprises led growth.

10 Thirdly, our ICT industry focused most of its attention and efforts on growth in Singapore. We looked inward.

11 But if we are to go in the direction that the Economic Review Committee has charted, which is to develop into a globalised, diversified and entrepreneurial economy, we will need to go beyond each of these three thrusts.

12 Firstly, we need to go beyond a government driven development strategy. In our next phase of growth, industry must be more closely involved in shaping the operating conditions that will enable us to make full use of the intelligence and connectivity that we have already achieved, and to make these better.

13 I do not mean that IDA no longer has a vision, will no longer lead the way, and would leave it all to industry. Quite the contrary. IDA plans to further thicken Singapore's global links, by developing Singapore into a digital exchange or trading hub where all digitised information can be traded, and by strengthening Singapore's position as a reference market in Asia. Singapore will be a kind of a living lab, for infocomm products and services. And Singapore will also take a more active role in helping to shape international standards.

14 But in our next phase of growth, it is imperative that industry is much more intimately involved in the process of developing plans, shaping policies, and implementing schemes to further propel growth. The reason is simple. Government spending is no longer the main driver of growth and capabilities. Private investments are. Infrastructure and legal frameworks are no longer impediments to progress. Yes, we must upgrade them. But the key to progress is to continue to press the wide-scale, innovative application of ICT in every nook and cranny of the economy.

15 Secondly, we must go beyond thinking large systems and major projects. Again, this is not to say that big systems are dead. Big systems are very much alive, and global companies like CISCO, HP, IBM, Intel, Microsoft and Sun are each investing billions of dollars to build new products and platforms to create large-scale, open networks that will provide even more connectivity and convenience.

16 But the rapid emergence of new wireless, broadband and media technologies is throwing up not just new capabilities, but also new ICT architectures. This will create many opportunities for small, niche companies to exploit.

17 IDA therefore has a two-pronged strategy. Firstly, it has identified 5 high-growth areas that it thinks will provide good prospects, and will work with the leading global players to bring such emerging technologies to Singapore. IDA plans to invest up to $30 million annually to seed pilots and trials, and to develop relevant capabilities for these promising areas, with funds from Infocomm 21 and new funds to be obtained from the government.

18 Secondly, it will work with industry to encourage more entrepreneurs to take full advantage of these new networks and capabilities. IDA will look into how we can better seed and support more start-ups. But money is not the driving force - talent, entrepreneurial talent, is. Here I am encouraged by many examples of young talents who have made their mark. Let me cite just one example. Carlos Fernandes, 26, was awarded the Young Professional of the Year by the Singapore Computer Society this year. An immigrant from India, he struck it big when he spotted a niche on the worldwide web. Existing customer relationship systems were not able to understand human dynamics. Carlos developed an emotionally intelligent interface, to help companies identify the profiles of their most likely customers on their websites. With this tool, companies could focus their attention on high potential customers to win sales and increase revenues. The product has now been picked up by several Fortune 500 companies.

19 We have the talents. And we are creating the environment for them to flourish. Wireless, broadband and media technologies are popping out new and novel ways for people to connect and use ICT resources. I hope that more people like Carlos will take into niches, and make Singapore a rich source of ideas for digital solutions.

20 The third beyond is to go beyond Singapore. Over the past year, I've had several breakfast meetings with SITF, the Singapore IT Federation. One of the recurrent issues that came up in our discussions is the urgent and critical need for our companies to move into the region, and beyond. There are two reasons for this:

Firstly, we can extend the life cycles of products and services developed for the Singapore market by adapting them for the region. The capabilities that we have, both in government and the private sector, can benefit the region, and provide an attractive business for our established companies.

The second, and perhaps axiomatic argument, is that the regional markets offer a bigger base for our niche companies to grow. Our companies should have big ambitions.

21 Two weeks back, I led an SITF delegation to Thailand to explore business opportunities. It's too early to say if that sparked off any new business deals for the companies who showcased their products, but I'm told a few deals may be in the making. During my visit, the ICT Minister, Khun Surapong, who is pushing for more e-government, welcomed our companies who have e-government experience to explore opportunities in Thailand. Another idea came from the ATCI, SITF's counterpart. They proposed to SITF that their member companies combine resources to build new markets in other ASEAN and Asian markets. These are openings that I hope our entrepreneurs will take up.

22 One thing is clear from my travels in the region, and that is, that there are large markets to be tapped - in Thailand, ASEAN and particularly in China and India.

23 I was glad therefore to be told about success of a local company Ecquaria in going international. The founder of Ecquaria, Dr Foong Wai Keong, headed the Java Competency Centre set up jointly by the then-NCB and Sun Microsystems. He spun off in 1998 to form Ecquaria, and developed a Service Oriented Platform that was used to power the eCitizen portal. Building on that success, Ecquaria then developed an ASEAN Service Access Platform (ASAP), which has been endorsed as an e-ASEAN pilot project. The latest news is that Ecquaria has won a World Bank contract to provide an e-government service delivery infrastructure for Mexican municipalities throughout Mexico. His success in the region means that he also creates jobs in Singapore - in fact, his company has grown, from 5 staff when he started, to 100 today.

24 Going beyond Singapore into regional and international markets is something the government can encourage but not command. Most of the work of seeking out partners, and sizing up opportunities will have to be done by the companies and the entrepreneurs. But where we can, where it makes an impact that justifies the use of public funds, the government will lend a hand.

25 I am therefore happy to announce today an IDA initiative called the Overseas Development Programme. Under this programme, IDA will pay part of the cost for market development staff attached to major Singapore infocomm companies or MNCs. This attachment will allow iLEs to leverage on the MNC's and major companies' customer bases to gain inroads into overseas markets. IDA hopes to nurture 50 globally competitive local companies to achieve export revenue of more than $50 million through these partnerships over the next 2 years.

26 But this one programme is not sufficient. iLEs will need other forms of support and facilitation. I hope that in the months ahead, industry and IDA will work hand in glove to come up other practical and effective ways to achieve this.

27 Finally, for our ICT companies to grow and succeed in these "three beyonds", we must have a strong home base of sophisticated users who will press our ICT companies on every front for better products and services. IDA will therefore continue to place a high priority on making infocomm technology accessible to every Singaporean. I am happy to note that through the joint efforts of various community groups and IDA, 10,000 needy households have been equipped with re-cycled PCs since the inception of the PC Re-Use Scheme in Nov 1999. From April 2003, needy families will have the option to own a brand-new PC at a very nominal rate under a revised scheme, to be called the Neu-PC Scheme (where "neu" is spelt N-E-U, and stands for "New or Used"). IDA will provide details later on.

Ladies and Gentlemen:

28 Let me recap the main points I've made so far.

29 Singapore's ICT industry has reached, and in many ways, surpassed the targets we set out 20 years ago. We need to start a new wave of growth, one that will reach 20 years and beyond.

30 But to do this, we must go beyond our old successes. IDA today has announced some new initiatives - $30 million a year to build new capabilities and open up opportunities for both corporations and entrepreneurs, and a $7 million Overseas Development Program to help companies expand overseas and grow new markets.

31 These initiatives are part of a bigger change. We must go beyond a government driven process, to a new industry-government partnership. Industry investment and enterprise must be the new driver, with the government providing support to bring clear and sustainable benefits to industry. We must encourage big businesses and smaller start-ups to work closely together, to deliver value to customers, and to build strong niches for local industry. And we must go beyond our shores, to the region and beyond, to grow markets, build our companies, and ultimately, create good, challenging and meaningful jobs for the ICT industry in Singapore.

32 The infocomm industry in Singapore is only 20 years young. But already, we have cycled through many generations of technology. We had fun growing this industry, and we can expect more fun to come as infocomm and media come together.

33 There will be lots to do. Whether we succeed or fail, depends on how willing and able we are to go beyond our success thus far. For over 20 years, we have built the ship. It is time to set sail. There are storms and rocks in the ocean, and it will be safer to stay in the harbour. But that is not what ships are made for. We must sail.

34 This is my challenge to industry. Think beyond corporate to entrepreneurial, beyond Government-led to an Industry-Government partnership, and beyond Singapore to the world. The future will be as bright as we dare it to be.