The Straits Times - Opportunities for growth as companies look beyond home
Expansion overseas likely to be high on an agenda in search of new growth areas.
Some home-grown companies might be content to rest on their laurels once they reach a certain level - expanding regionally or further afield is not for them.
But this mentality is fast becoming obsolete. The mobility of top global talent and speed of technological change means that companies here will have to be plugged into supply chains around the world or risk being left behind.
That is why overseas growth is expected to be a key focus for the the Committee for the Future Economy (CFE) in its findings, due in the next two weeks.
In a November update, the CFE said that strong growth in Asean and India “will create opportunities in consumption and infrastructure spending” for Singapore companies.
“We can also benefit from the growing demand for services in China,” the statement added, noting that the country’s One Belt, One Road initiative “will provide new opportunities for our services and infrastructure providers”.
The Government Parliamentary Committee (GPC) for Finance and Trade and Industry has urged policymakers to “identify companies that have the potential, competitiveness edge and the readiness to expand, internationalise and innovate”, and devise tailor-made schemes to support their international growth.
The aim is to “develop a pool of globally competitive companies that are anchored in Singapore”.
Indeed, the next step would be to make Singapore a strong base from which companies can develop innovative “world-first solutions” and take these products and ideas global, the CFE’s statement said.
Mr Teo Siong Seng, chairman of the Singapore Business Federation, said: “We strongly encourage the Government to work with businesses to create an economy unconstrained by our geographical boundaries.
“This includes helping our start-ups scale up to serve markets well beyond Singapore, helping them establish international connections so that they can grow and thrive globally.”
At the same time, Singapore should remain open to foreign investments and talent, Mr Teo noted.
“The emphasis is to promote developments that capitalise on our strengths to cultivate new and valuable growth clusters to anchor businesses here while they expand overseas.
“For example, these new clusters could include a trusted payment hub, ‘Know Your Customers’ hub and food quality certification hub.”
Companies expanding overseas need strong human resource strategies to drive their international business plans, and this is also expected to be a key focus in the coming years.
New Growth Areas
Besides overseas growth, the CFE will also be delving into new growth sectors which will help power the Singapore economy over the next five to 10 years.
Earlier strategies - such as picking “winning” sectors to boost economic growth - are far more difficult to execute now, not only because the pace of technological change has picked up significantly but also because of Singapore’s evolution into a mature, high-cost economy.
This means that it has become extremely tough for low-cost, low value-added sectors to survive here.
As a result, attention is now shifting towards niche, highly specialised sectors such as artificial intelligence, robotics and IT.
New developments are also emerging in familiar sectors like manufacturing.
The so-called Fourth Industrial Revolution - also known as Industry 4.0 - is creating new trends in advanced manufacturing and giving rise to “smart factories”, where man and machine work seamlessly together in real time.
Mr Liang Eng Hwa, chairman of the GPC for Finance and Trade and Industry and an MP for Holland-Bukit Timah GRC, said: “Beside the digital space, we should continue to build on our strengths in advance manufacturing, healthcare and urban solutions.”
Research and Innovation
Singapore faces land, labour and resource shortages - which means that raising productivity is essential to long-term growth.
To this end, investing in innovation is essential, and significant investments have been pumped into innovation over the years.
The Government has set aside $19 billion from 2016 to 2020 for research, innovation and enterprise activities, under the Research, Innovation and Enterprise 2020 Plan launched last January.
In its November update, the CFE noted that Singapore already has many elements of a strong innovation ecosystem in place, “including a critical mass of research scientists and engineers, a thriving start-up scene, strong institutes of higher learning and a growing pool of venture capitalists”.
Boosting Singapore’s research and development capabilities was a key focus of recommendations submitted to the Government by the GPC for Finance and Trade and Industry.
The proposals from the team of nine parliamentarians included suggestions to make use of research and development to help firms become more competitive.
For instance, technology could be transferred from research institutes to promising local enterprises in areas where Singapore has a competitive edge, such as biotech, precision engineering and urban planning.
Mr Liang said that industry transformation maps - plans tailored to the specific needs of certain sectors to help raise productivity - will continue to play a key role.
Mr Teo agreed, saying: “In a value-creating economy that Singapore aspires towards, intellectual property counts more than the traditional factors of land, labour and capital.”
Source: The Straits Times © Singapore Press Holdings Limited. Permission required for reproduction.