Singapore Looks To Become Asian Business Nerve Centre

Speech by Mr. Goh Chok Tong, Senior Minister at ST Microelectronics 40th anniversary dinner at Shangri-La Hotel.

First, let me extend my heartiest congratulations to Mr Bozotti and his team at STMicroelectronics on achieving 40 years of successful operation in Singapore.

Ten years ago, I officiated at your 30th anniversary celebrations, so I am indeed very happy to celebrate with you another 10 years of growth and expansion of STMicroelectronics in Singapore.

STMicroelectronics and Singapore have enjoyed a fruitful partnership over the last 40 years. We have grown from strength to strength together, through both difficult and good years. The global economic recession of the past year has highlighted not only the importance of this partnership, but also the need for flexible and swift responses by both countries and companies.

Changing tides before the crisis

Even before the crisis, the global economy was already experiencing structural changes. Globalisation had accelerated the flow of technology and capital from the developed world to developing Asia. Once closed economies like China, India and Vietnam opened up. Their transformation is profound. While Asia has not escaped the recent global financial turmoil, it has weathered it well, and is now recovering faster than most other regions.

Asia’s strong prospective growth is underpinned by key structural trends, like rapid urbanisation, a rising middle class and demographic changes. They create enormous demand for products and services. In response, multi-national companies have begun restructuring and moving away from their old model of expansion in Asia, which was to replicate business units in Asia but concentrating decision-making back in their head office. Going forward, many multi-national companies now realise that to harvest the opportunities in Asia, they need a nerve centre in Asia to cater specifically to the Asian markets.

Singapore competes to be that nerve centre. Good governance, pro-business policies, and a disciplined and productive workforce have earned us a reputation of being a good place to invest and do business in. We are aware that many other cities and countries are also improving on their business environment. We will try to stay a few steps ahead.

Singapore, your best partner to succeed in Asia

We have formed an Economic Strategies Committee chaired by the Minister for Finance to think through how to reposition ourselves to face the new realities of a post-crisis world. Creeping protectionism, limits on carbon emissions, and the gradual shift of global demand from West to East are some of the new challenges that we have to grapple with. Closer to home, we must find solutions to overcome our own constraints of limited land and manpower.

To stay ahead of the competition, we believe that Singapore must evolve:

(a)          from being an efficient hub to an essential hub;
(b)          from helping companies manage their bottom line, to partnering them to grow their top line; and finally,
(c)          from just adding value alone, to creating value for companies.

EDB calls this the “Host to Home” strategy. While Singapore will continue to be a good host for businesses, we want companies to see us as their ‘home’ as well: specifically, as Home for Business, Home for Innovation and Home for Talent.

Home for Business

First, Singapore as a Home for Business. We envision Singapore as the preferred home in Asia for MNCs, and an essential location for Global SMEs and Asian Enterprises. We envision Singapore to be home to companies’ C-suite executives and their supporting staff. We envision companies using Singapore as a home in Asia to feel the pulse,spot trends, and make key decisions for Asia.

Let me give you some examples of MNCs doing this. Earlier this year, Rolls-Royce announced that it is moving its global headquarters for its Marine business from London to Singapore and basing key decision makers for the business here, including the President of the Marine business. Similarly, over the years, Standard Chartered Bank has grown deep roots in Singapore by basing its global heads for consumer banking, corporate banking, financial markets as well as IT and operations in Singapore. We hope to be Home for Business for even more companies.

Home for Innovation

Second, Home for Innovation. Innovation is a key imperative for business growth. I foresee more new Intellectual Property for products and services not only being created in Asia but also tailored for Asia. Singapore understands the necessity of intellectual property protection. Also, while our domestic market is small, our discerning consumers and cosmopolitan society put us in good stead to become the lead or reference market for innovations in Asia.

The Government will do more to facilitate knowledge creation, test-bedding and commercialisation in Singapore. For instance, earlier this year, Siemens opened its “City of the Future” Solutions Centre in Singapore, to leverage on Singapore’s city environment and our strong capabilities in IT and urban planning to innovate for the future. Siemens believes that Singapore is a living laboratory which can help them develop new products and services for urban populations.

Home for Talent

Third, Home for Talent recognises talent not merely as an input factor, but as a key driver of economic growth. We are constantly looking for new ways to nurture our local talent. Our new Singapore University of Technology and Design will not only be interdisciplinary in its teaching and research, but also unique in its partnership with two top universities from the west and east: MIT in the US and Zhejiang University in China. Rudyard Kipling famously said “Oh, East is East, and West is West, and never the twain shall meet”. But, in Singapore, there will be neither East nor West when two strong institutions from different ends of the world stand face to face. It will be a Uniquely Singapore Home for Talent!

We are also setting up the new Singapore Institute of Applied Technology to enable more of our polytechnic graduates to pursue degree programmes locally. To continually upgrade our workforce, two new Continuing Education and Training (CET) campuses will be set up as part of a comprehensive master plan to improve adult training programmes.

In addition to nurturing our home-grown talent, Home for Talent is also about being a talent magnet, by creating the right environment for a diverse talent base to flourish. It is about being a more family-friendly city, and about offering a wider choice of lifestyle events and services so that talent can feel at home here to work with or create top-tier businesses.

Singapore as a home for STMicroelectronics

Our partnership with STMicroelectronics is a good example of how Singapore has evolved from being a Host to a Home.

STMicroelectronics was one of the first semiconductor companies to recognise the vast potential of the Asia Pacific region. I remember in the 1960s, STMicroelectronics started in Singapore with test and assembly operations for semiconductors.

At that time, your company had only five operators. Today, STMicroelectronics employs 5,700 here as Singapore is home to your Asia Pacific Headquarters which manages all Asia operations excluding China and Japan.

I am delighted to hear Mr Bozotti announce new investments to increase the wafer fabrication capacity in Singapore further.

Topics: Asia, business, economic development, Economy, employment, global economic recession, global economy, globalization, Governance, investment, jobs, multi national companies, Singapore, STMicroelectronics, urbanisation

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