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Government Continues To Invest In Infocomm Technology

25 April 2006 - Speech By Mr Chan Yeng Kit, Chief Executive Officer, Infocomm Development Authority of Singapore At the 2006 Industry Briefing Business Opportunities for IT in the Public Sector, Raffles City Convention Centre.

Speech By Mr Chan Yeng Kit, Chief Executive Officer, Infocomm Development Authority of Singapore At the 2006 Industry Briefing Business Opportunities for IT in the Public Sector on 25 April 2006, Raffles City Convention Centre.

Distinguished guests, ladies and gentlemen,
Good morning.

The Growth of the Infocomm Industry

I am happy to see such a strong industry turnout this morning for the annual Industry Briefing. This interest among infocomm industry members on the business opportunities for infocomm sector is understandable as we are witnessing a resurgence of optimism in the sector, not only in Singapore but also globally.

This morning, I am pleased to share with you good news on the performance of Singapore's infocomm sector. In 2005, the revenue of our infocomm industry grew by 8.9% to reach S$37.89 billion. Compared to 2004 infocomm industry's growth of 6% with S$34.77 billion, this is indeed a good indicator that the industry has picked up its pace of growth1.

In general, IDA's annual survey on Infocomm industry for 2005 shows that there was positive revenue growth in market segments such as hardware, telecommunication services and software. Hardware continues to be the highest market segment accounting for 51% of total revenue, followed by telecommunication services at 19% and software at 14%. Going forward, the industry is also optimistic that revenue will continue to grow.

The export market also continues to be the larger contributor to the Infocomm industry's revenue than domestic market. The export market contributed 58% compared to the domestic market at 42%.

Business sentiments will continue to be positive. In IDA's recent survey on Infocomm Sector Business Expectations for the second quarter of 2006, there is a good positive outlook of favourable business conditions in the infocomm sector for the next six months ending September 2006.

In the area of infocomm manpower, we are also seeing a significant uptake. Last year saw a net increase of 7,000 infocomm jobs, with total infocomm manpower at an all-time high of 111,400. Over the next two years, it is projected that there will be another 7,700 new jobs created by the infocomm industry2. They will come from various areas such as software design, infocomm consultancy and project management.

This is a very positive sign for the infocomm job market, and our students here are quick to pick up on the trend. A preliminary analysis by IDA shows that more students in polytechnics, such as Temasek and Republic Polytechnics, are choosing Infocomm courses as their first choice. As a result, more stringent entry criteria into infocomm courses have been introduced, with the Cut-Off Point for infocomm courses at these two polytechnics decreasing, i.e. improving, since 2004.

The numbers which I have just shared points to a renewed confidence in Singapore's infocomm industry that we have not seen since the dotcom days.

Government Continues to Invest in Infocomm Technologies

Today, there is no question that Infocomm has become an essential part of the way we live, work and play. It enhances our competitiveness and improves the standard of living. Continual investment in Infocomm technologies is thus important. For the public sector, it is also essential to continue exploiting the potential of Infocomm technologies for operational efficiencies. Therefore the government will continue to invest in Infocomm.

Last year, as part of the continual improvement in efficiencies, the government announced its plans for a S$1.5 billion Standard ICT Operating Environment, or SOE in short. SOE will standardise the messaging, network and desktop environment for the public sector. The government is expected to realise at least 30% net savings per year once the SOE is fully deployed.

There has been much interest in the SOE tender. Today, I am pleased to announce that four consortia have been shortlisted for the next stage of the SOE tender. In no specific order, they are:

  • One Meridian led by EDS international;
  • Team HP led by Hewlett-Packard Singapore (Sales);
  • One Team led by NCS and IBM Singapore; and
  • A fourth consortium led by NEC Solutions Asia Pacific.

These consortiums have met the criteria for the pre-qualification round such as financial capability, expertise and deployment track record.

Besides the SOE, the government also estimated that it would call for $700m worth of contracts last year. It actually awarded S$1 billion worth of contract for infocomm products and services by the end of the financial year of 2005 The public sector will continue to invest in infocomm in this financial year 2006, with an estimated S$620 million worth of tenders planned. The speakers from various agencies will later give details on the key projects that the Government has lined up for this financial year.

Industry Response

At today's session, we will share the government infocomm procurement plans so as to better prepare the industry in responding to government tenders. IDA also looks towards strong government-industry collaboration in developing innovative infocomm products and services for the public sector. We will continue to showcase the best of these products and services with a view of helping our companies to increase their export opportunities.

Technology, capital, knowledge and talent are crucial growth factors. And we will continue to use infocomm to propel Singapore forward and enable Singapore to become a global leading city.

This is in line with our iN2015 vision of transforming Singapore into a global leading city, where infocomm empowers the way we live, learn, work and play.

Lastly, I would like to thank my colleagues from the Ministry of Defence, Ministry of Home Affairs, Ministry of Education, and National Library Board, who will be sharing their procurement plans for FY06. I wish you an interesting and fruitful session.

Thank you.


1 IDA's Annual Survey on Infocomm Industry 2005

2 IDA's Annual Survey on Infocomm Manpower 2005

Related Link:

  • Executive Summary of the Annual Survey on Infocomm Industry for 2005