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Spurring The Growth Of The Singapore ICT Industry

1 March 2005 - Keynote By Mr Chan Yeng Kit, Chief Executive Officer, Infocomm Development Authority of Singapore At Singapore Infocomm Technology Federation (SiTF) 2005 Business Outlook Forum 2005, Raffles City Convention Centre.

Keynote By Mr Chan Yeng Kit, Chief Executive Officer, Infocomm Development Authority of Singapore At Singapore Infocomm Technology Federation (SiTF) 2005 Business Outlook Forum 2005 on 1 March 2005, Raffles City Convention Centre.

Mr Stephen Lim, Chairman of SiTF,
Members of SiTF,
Ladies and Gentlemen,

Good afternoon.


1. Thank you for giving me this honour to speak at SiTF's inaugural Business Outlook Forum. I am pleased to be part of this ongoing effort by SiTF, to actively engage our local ICT professionals in the development of the industry.

2. I must admit that when I first received the invitation, I hesitated for a while. As some of you know, I've joined the IDA just barely 2 months ago. So what can a 2-month old newbie say to such a gathering of distinguished ICT professionals?

3. I accepted the invitation nevertheless, as I felt it was important to be here. Not so much to give a speech. But to hear from you. To use the opportunity to get to know the industry better. To understand the issues and challenges you face. And to hear your suggestions on how we can move the industry forward, together.

4. I do not intend to bore you with a long speech. What I hope to do over the next few minutes, is to share with you what I see to be the place of ICT in Singapore, re-cap some of the initiatives that IDA and industry has been collaborating on, and outline very briefly how I hope IDA and industry can work together to address some of the challenges facing the sector.

Importance of the ICT Sector

5. Although I have never had the privilege of a career in ICT, I have always had a keen personal interest in this area, right from school and varsity days, to driving the IT Masterplan for Education in my last job.

6. Following the bust and the hype around life sciences in recent years, naysayers have been proclaiming ICT to be a sunset industry. On the contrary, I believe infocomm remains a key piece in Singapore's future. I was quite heartened, for example, to note a Straits Times article last month reporting on the job openings available for new grads. ST reported over 2000 jobs in the ICT sector, or double to more than 4 times that of any other sector reported.

7. Strategy gurus and futurists tend not to agree on many things. But one thing most will agree on is the importance of the 3 big 'O's - info, bio and nano. These 3 technologies will drive the innovations of the next decade. Infotech is important not only in itself, but also because it is a critical enabler for the other two technologies - imagine doing gene sequencing or designing nanotubes without computers!

8. This is something I have been evangelising in my last job in MOE. Not just because MOE's IT Masterplan comes under me then. But because I believe in it. And because I feel strongly that it is imperative that our children get a good ICT grounding in school.

9. ICT has played a phenomenal role in accelerating the progress of Singapore society. It is, as DPM Tan noted 2 weeks ago, the "nerve centre of Singapore's economy" and "an intricate component of infrastructure in critical sectors". And it will remain so, despite the occasional ups and downs that are to be expected.

Industry Overview

10. In the short term, I am glad to report that the general business outlook for 2005 is positive. According to MTI's projections, Singapore's GDP is projected to grow between 3% and 5% in 2005.

11. For the ICT sector specifically, the global business outlook is positive as well. IDC predicts that the worldwide spending will grow 6%, from US$965 billon in 2004 to cross US$1 trillion in 2005. For the Asia Pacific region, excluding Japan, an even higher growth of 10% has been projected.

12. In tandem with the recovery in global economic conditions, Singapore's infocomm industry is also expected to show brighter prospects for the coming year. Based on IDA's latest survey, our ICT sector is projected to grow by 7.4% over last year.

Spurring Growth of the Singapore ICT Industry

13. Let me take a few minutes now, to briefly re-cap some of IDA's key programmes last year, and key initiatives for 2005. Please bear with me if some of these are not new to you. But I think it is important to re-cap and give a holistic picture of the existing programmes we have or are embarking on, so that we have a common base from which to discuss the future.

14. IDA's current programmes are part of our Connected Singapore blueprint launched in March 2003. To recap, under this blueprint, there are four key strategies - (1) ICT as an Engine of Growth; (2) Digital Exchange; (3) Infocomm for Connectivity and Collaboration; and (4) ICT as an Agent of Change.

15. To ensure ICT remains an Engine of Growth, IDA will continue to seed new economic activities, develop capabilities, and encourage expansion into overseas markets. One key thrust is how to tap into the growing Business Process Outsourcing, or BPO, market. IDA is the designated national champion agency for BPO, and we have set in place programmes to help develop the local BPO industry. These include training programmes, assistance to companies in services delivery, and promoting R&D on outsourcing technologies. Some 1000 infocomm professionals are targeted to be trained in BPO service provision by 2006.

16. Last year, IDA launched the world's first quality mark for Business Continuity and Disaster Recovery Services. The establishment of this new industry standard places Singapore on a strong footing to be a choice location and powerhouse for high-end BPO activities.

17. To facilitate the efforts of Singapore infocomm companies expanding overseas, IDA will be actively pursuing opportunities in new markets such as the Middle East and China. One model of engagement is that of bilateral government-to-government infocomm partnerships, which local enterprises can leverage on. For instance, IDA has entered into several e-government collaborations with countries such as Jordan, Kuwait and China. Our goal is to help Singapore companies gain footholds or open doors in these markets.

18. Another key activity for 2005 is the continued transformation of Singapore into a Digital Exchange, positioning Singapore as the hub for digital trade. Some of the exciting areas include online games and digital cinema. Specifically, we will be engaging in the trading of digital goods to bring about an increase in the value of digital transactions through Singapore. IDA will be actively attracting digital content, such as online games and animation to Singapore, for processing, management and distribution to the rest of Asia.

19. We will also continue to execute strategies to ensure Singapore remains a leading nation in the use of infocomm for connectivity, creativity and collaboration. We have received many accolades in our work in this area. In particular, we gained international recognition recently, for our journey to transform the Education and Healthcare sectors. Earlier this year, Singapore was named one of the top 7 intelligent cities in the world by the Intelligent Community Forum. This is an annual award honouring amongst others, excellence in the use of broadband communications in various sectors, government efforts to spur this growth and deployment, as well as the fostering of innovation through government programs.

20. We will continue to extend our capabilities in areas such as wireless and wired broadband. We are making good progress in reaching our goal of 50% household broadband penetration by 2006. With the launch of 3G offerings, we will have another platform for delivery of broadband data. Soon IDA will also be making available new spectrum for wireless broadband.

21. Last but not least, IDA has an important mission of proliferating ICT as an Agent of Change. Let me touch on some programmes that we initiated to encourage more effective use of infocomm to improve business processes. Last year, we launched the collaborative high-tech manufacturing plan in March, to build 10 end-to-end high-tech manufacturing chains, covering design collaboration, supply chain and payment processes. IDA has also launched a Radio Frequency Identification, or RFID, technology plan to build an RFID-enabled supply chain cluster. This brings together manufacturers, logistics services providers, retailers, infrastructure providers and solutions providers.

ICT Scorecard and Vision Going Forward

22. On many counts, I think Singapore's ICT industry has performed very well. We routinely boast about being ranked no. 2 in e-Government Leadership by Accenture for 4 years in a row; no. 2 in Networked Readiness by the World Economic Forum; Best e-Ready Nation in Asia-Pacific by the Economist Intelligence Unit; and so on.

23. Quoting all these statistics for marketing purposes is fine. But what we need to guard against, is believing too much in our own hype, and thereby stagnating, or worse, slipping behind. For example, should we be happy to be just no. 2? After all, Singapore is only a compact city of 600 sq km, compared with vast countries like Canada that are ranked ahead of us. Even in the rankings chosen, we have been selective. While EIU ranks us top in Asia-Pacific, they put us 7th globally. Similarly, other rankings, e.g. by the UN, places Singapore 8th.

24. Lest it be misunderstood that I've brought along my mindset regarding school rankings from MOE, to apply to IDA, this is not my intent. The purpose of my using these examples are merely to illustrate that I think there is a fair bit of room for Singapore to go, before we achieve our full ICT potential.

25. If we were to do a McKinsey-style or IDC-style analysis of Singapore's strengths, weaknesses and potential in the ICT arena, I have no doubt we would score quite well. We are a hardworking, compact nation. The workforce is disciplined, well-educated. Our schools and IHLs turn out IT-savvy and technologically-inclined graduates. Yet, it is often Silicon Valley, Israel, or even Bangalore that comes to the mind of international investors, when asked to name countries or regions that are IT powerhouses of the world.

26. The previous ICT blueprints implemented by Singapore have given us a good head-start and helped build a strong foundation Intelligent Island, Singapore ONE, Infocomm 21, Connected Singapore. Going forward, my aspiration for Singapore is to not just sustain our current position, but to leapfrog those who have caught up or are now ahead of us.

27. I would like Singapore to be talked of in the same breadth as Silicon Valley or Israel and Bangalore. I would want Singapore to be an even more attractive investment and business location because of our world-leading ICT infrastructure and ICT world force. I would like students and parents to see ICT as an exciting and rewarding career. I would like to see ICT being seen as sexy again.

28. But IDA cannot do all these by itself. Neither do we have magic crystal balls and model answers. We are prepared to step forward to take collective ownership and collective leadership with industry. But the industry, SiTF, all of you, must share a common vision and aspirations, offer suggestions and solutions, and be prepared to take action and ownership.

29. IDA intends to embark on a strategic visioning and planning exercise, to go beyond the 3-year Connected Singapore blueprint, which ends in 2006. More details of this initiative will be announced in the next 1 to 2 weeks. I urge all of you to be forthcoming with your suggestions and views. Let us together bring the industry to new heights.

Strong Partnership with SiTF

30. Finally, and very importantly, I would like to say a few words to acknowledge the important role that SiTF has played in the ICT industry.

31. SiTF is a close partner of the IDA. Over the years, we have worked closely to address issues of concern to the ICT industry. In specific areas, your industry chapters, such as the Singapore Enterprises, Wireless and Security Chapters, provide good platforms for us to work together close to the ground. By listening and partnering with you, we have achieved much together.

32. Last year, SiTF and IDA successfully worked together on the National Infocomm Awards (NIA), which helped to profile many of our local enterprises. Almost all the NIA winners reported an increase in awareness of their organisations. Some of the companies shared that they received increased usage for their services or had qualified leads as a result of the exposure gained at NIA.

33. We understand that branding is especially important to you as you venture into regional markets. We heard your feedback that we need to build up the brand image of Singapore's ICT companies. Hence, SiTF and IDA are now working together to promote Singapore infocomm products and services under a unified quality mark, backed by quality certification.

34. We also share the sentiment on the need to quickly build up our external wing. Therefore our partnership with SiTF has expanded beyond our local shores, to overseas markets. In April last year, SiTF and IDA jointly set up the S$3m Singapore Solutions Centre or SSC in Shanghai, China. I am pleased to share with you that the SSC has so far generated direct revenues of $3.6m for the Singapore partners. I am also told that the SSC has provided a good platform for our companies to launch into China.


35. In closing, let me reiterate my standing and open invitation to industry members, and to all of you, to provide IDA with feedback and suggestions as to how we can grow the ICT industry together. I look forward to opportunities to engage you in discussions and dialogues as to how we can meet the challenges of growing Singapores ICT industry.

36. With that, I will like to wish all of you a fruitful time at this Forum.