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Speech by Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister for Finance, at EDB Society's 25th Anniversary Gala Dinner

23 Jul 2015

My Parliamentary colleagues,

Mr Lee Suan Hiang, President of EDB Society,

Past and present Chairmen of EDB,


Distinguished Guests,

Ladies and gentlemen


1. Thank you, EDB Society, for inviting me to join you on this special occasion to celebrate your 25th Anniversary, and most especially to mark our 50 years of nation-building:

– 50 years of building a cohesive, upwardly mobile society; and

– 50 years of economic transformation, in which EDB has played a major role.

2.  I would first like to join you in recognising the four Distinguished Fellows who are receiving their awards this evening. Each of them has made outstanding contributions to nation-building and the economic prosperity of Singapore. They now join a very distinguished list of awardees, including the late Dr. Goh Keng Swee, Mr. S Dhanabalan and Mr. George Yeo.

3. EDB has been about an outstanding team led by outstanding individuals, starting with its first Chairman, Mr. Hon Sui Sen. Everyone in the EDB team, from one decade to the next, has contributed keenly to Singapore’s economic development. Every EDBian, from those in the cluster groups that specialise in developing industry sectors, to those in the regional centres around the world who are constantly on the lookout for new opportunities, has contributed to an exceptional team.

How we developed through constant evolution of strategy

4. Fifty years ago, few expected a sudden nation, with no domestic market and no resources, and faced with Konfrontasi, to advance the way we have done.

5. We have advanced not by getting everything right in the first instance, but by constantly evolving our economic strategies, decade by decade:

– repositioning Singapore’s economy in response to changing global demands and new competition;

– being opportunistic: engaging with global firms as they changed their own business strategies, and being on lookout for new technologies that Singapore could adopt to gain competitive advantage;

– constantly building new local skills and capabilities, so that we can take advantage of these opportunities, and meet the changing aspirations of our people.

6. It is this constant evolution in strategies that has enabled Singapore to survive the competition at each stage, move up the value chain within each industry, and move to new industry value chains:

– We inherited a colonial economy built on a port and entrepot trade

– We moved in our early independence years to create jobs for a rapidly growing young workforce by making Singapore a desired location for low-cost, global manufacturing

– Then as we succeeded in bringing down unemployment, we moved in the late-70s towards higher value-added production through automation and computerisation, enabling higher wages

– From the mid-80s, we began developing knowledge-based activities in earnest, with biotechnology and infocomms becoming important drivers

– In the 2000s, we made a major push to diversify our economy, with exportable services becoming a second engine of growth; and we made R&D an important driver for the long term, so as to open up future possibilities for growth

– Since 2010, we have embarked on a major new round of economic restructuring: aimed at raising skills and productivity to advanced country levels, and helping local SMEs to grow through internationalisation. We have also actively grown MNC’s strategic functions in Singapore – enabling them to do research, plan, coordinate and finance Asian and global operations out of Singapore.

7. EDB has been in the front and centre at each stage of Singapore’s development. But EDB was not only about investment promotion. It was, from day one, in the business of developing skills through close collaboration with businesses. This is less well recognised, but was critical in how we developed and became a major global manufacturing player.

– When Texas Instruments (TI) was to open our first semiconductor factory in 1969, workers attended a one-week orientation programme at the National Productivity Centre[1] in Jurong, followed by two weeks of in-house training at the factory. It enabled TI to begin production just three months after the decision to set up a plant was taken. Three months was unheard of anywhere else in the world.

– Many who are here this evening will also remember EDB’s collaborations with leading companies in the 1970s, to set up the Tata-Government Training Centre (TGTC), Rollei-Government Training Centre (RGTC) and Philips-Government Training Centre (PGTC). EDB secured deep involvements by each of these companies. They took their centres very seriously – seconding directors and lecturers to design and run the training programmes. Trainees went through a full apprenticeship programme – two years of in-centre training followed by two years on-the-job training attached to the lead MNC or other firms.

– In the early 1980s, EDB went on to collaborate with industry in setting up three new institutes – the French-Singapore Institute (FSI), German-Singapore Institute (GSI) and Japan-Singapore Institute (JSI) – to train the technical specialists needed by industry. These institutes were eventually transferred to Nanyang Polytechnic in 1993, which stuck to this early tradition of collaboration with industry to ensure skills relevant to the market.

8. Constant evolution and change is also how we have avoided major cumulative errors in economic development – and it has to be remembered that successful economic development is not about avoiding errors or strategies that fail to pay off, but about changing course soon enough. Most countries that have failed or stagnated have done so not because they made errors, but because they failed to change course when conditions changed, and failed to recognise the writing on the wall. We have avoided that so far, and must continue to stay alert to a changing environment.

Our Next Phase: Deep Skills and Innovation, with Singaporeans at the Core

9. That constant evolution in our policies over 50 years has moved Singapore from being a trader and middlemen to becoming a reliable centre for high value-added activities in global supply chains. It has enabled us to advance in the world, and has transformed Singaporeans’ standards of living over the five decades.

10. We have now embarked on a new phase in our nation’s economic development. It is an ambition that involves three dimensions - to do with enterprises, skills and Singaporeans – with each dimension reinforcing the other:

– We are moving from value-adding to value-creation. It means making innovation pervasive in every industry and for firms small and big – so that we can come up with our own products and services, and also to establish Singapore as a leading centre for value creation in business strategies of foreign companies.

– We are also developing new attributes in our people and a new culture, so that we develop mastery of skills in every vocation. It involves everyone being able to learn continuously through life, to push his or her potential or discover a new interest at different stages of life.

– And it will mean Singaporeans being at the core of innovative, high-skill teams in every sector, developing good careers for themselves.

11. EDB will be deeply involved in our efforts to realise this ambition for Singapore. EDB’s role will be focused especially on two fronts:

a. Strengthening innovation systems within industry, especially involving stronger collaboration between companies;

b. Developing deep skills and future capabilities. EDB will take the lead in several sectors under our SkillsFuture initiative, which aims to give every Singaporean a fulfilling career.

I will elaborate briefly on these initiatives and EDB’s roles.

Strengthening innovation systems within industry

12. We have to build up strong and self-sustaining innovation systems. The Government cannot force innovation, but it will provide active support to companies to build up this self-sustaining dynamic in industry:

a. First, by supporting individual companies directly as they invest in their own innovation capabilities;

b. And second, by investing in innovation platforms that all players can benefit from, and by spurring collaboration between companies, large and small.

13. We are already seeing a significant pick-up in corporate R&D and innovation. Many of the larger players, both local companies and MNCs are investing actively in innovation.

i.The MNC examples are well known. Procter & Gamble (P&G)’s Singapore Innovation Centre (SgIC) is the nation's biggest private research facility, opened in March 2014[2].

ii. United Microelectronics Corporation (UMC), the third largest pure-play wafer foundry globally, has made Singapore its primary location for conducting process R&D for specialty integrated circuits (IC). Their local R&D team will collaborate with local institutes such as Singapore’s Institute of Microelectronics (IME).

14. But we can only become an innovative, value-creating economy if a significant segment of our SMEs is driven by innovation. This is a major priority, and we are putting significant Government resources into supporting it – through range of grants and tax incentives to develop new products and services, or new business processes, and to protect their intellectual property. SMEs can also avail themselves of loan and equity financing schemes supported by the Government.

15. We are now seeing a new wave of innovation-driven start-ups and SMEs. We must scale this up and ensure that we develop a self-sustaining system involving SMEs in Singapore.

16. Our economic agencies are investing in innovation platforms aimed at developing and commercialising new technologies in Singapore.

a. For example, Singtel and EDB have in partnership invested $500m in the Asia-Pacific Cyber Security Competency Centre, which many firms will be able to collaborate with;

b. EDB and Nanyang Polytechnic have jointly set up the Additive Manufacturing Innovation Centre (AMIC). The AMIC works closely with local and international companies to design, prototype and test advanced manufacturing components.

i. Express Tech Manufacturing Pte Ltd is an example of local SME that has benefited from AMIC. Through its partnership with the AMIC, it has used additive manufacturing technologies to implement rapid tooling - creating high-quality injection moulds quickly and speeding up time-to-market. It has also developed conformal cooling channels, a new technology that helps clients reduce cooling time. This innovative combination of rapid tooling and conformal cooling services has enabled Express Tech to achieve real productivity gains of about 35%, and reach a new range of sophisticated clients.

17. These joint platforms, with some government investment, are an important way in which we can help our SMEs to develop new capabilities. The other way is to deepen commercial collaboration between large and small companies within the same cluster.

a. For example, Airbus and local specialty engineering firm HOPE Technik have collaborated to construct a space plane demonstrator.

EDB with SPRING are working to scale up these collaborations.

Maximising every Singaporean’s potential in life

18. As we move towards an innovation-driven economy, new skills and attributes among our people will be in demand. Jobs will become more demanding in skills, but they must also allow Singaporeans to develop themselves in ways they find fulfilling. 

19. The national SkillsFuture movement is aimed at achieving this – developing everyone to their fullest potential through continuous learning, and enabling people to move onto new curves in their careers.

20. We have been building up momentum in the months since we announced our SkillsFuture directions in this year’s Budget:

– MOE and our tertiary institutions have been implementing enhanced internships across various sectors

– Our economic agencies and companies have been working together to start the SkillsFuture Earn and Learn programmes, which we will progressively roll out to eight programmes in 2015, across a range of sectors such as food manufacturing, logistics and infocomm technology

– The SkillsFuture Mid-career Enhanced Subsidy – a 90% subsidy on course fees for Singaporeans aged 40 years and above – has taken effect for MOE courses from 1 July 2015 and will apply to all WDA-approved courses from October 2015

– We will also roll out the first batch of SkillsFuture Study Awards to help individuals develop deep skills in areas of demand. This will be introduced in the fourth quarter of 2015

– All Singaporeans aged 25 and above will receive the first round of SkillsFuture Credits in the first quarter of 2016

21. This is good early momentum, but the journey is long and we have much to do.

22. Our biggest challenge is in reaching out to businesses, and especially our SMEs. It will require concerted effort on the part of government agencies, our trade and industry associations, the unions, and businesses and individuals ourselves. Senior Minister of State Lee Yi Shyan will be driving the SkillsFuture outreach to businesses, so as to help both our SMEs and their employees to take full advantage of the support we are providing under SkillsFuture. Yi Shyan will engage closely with industry associations and businesses, and help ensure tie-ups with quality education and training providers. I should add that SMS Lee Yi Shyan has a real passion for this outreach, given his background of active engagement with well over a thousand companies over the years: during his 11 years with EDB, working with MNCs; his six years of working with SMEs in SPRING Singapore and IE Singapore, which he led; and in his varied responsibilities since then as a political office-holder.

23. EDB will be a key player in SkillsFuture. First, EDB will lead the development of seven of our 25 Sectoral Manpower Plans – in aerospace, marine, chemicals, electronics, logistics, biopharmaceuticals and precision engineering industries. It will work closely with all stakeholders in these sectors.

– For example, EDB is actively partnering our tertiary education institutions to establish collaborative platforms to develop skills that can complement new and potentially disruptive technologies. The Nanyang Polytechnic AMIC, which I mentioned earlier, the Advanced Remanufacturing and Technology Centre (ARTC), and the NTU Singapore Centre for 3D Printing are a few examples of such platforms. They offer training opportunities for craftsmen, engineers, as well as Masters and PhD researchers, to work with upcoming technologies such as 3D printing, sensors and automation.

24. Second, EDB is spearheading the SkillsFuture Leadership Development Initiative (LDI), which will develop the local leadership talents for our industries. EDB will support companies in designing and enhancing developmental opportunities for Singaporeans with leadership potential at various levels. These may include working with companies to develop cross-functional job rotations and overseas assignments in their talent development programmes.

25. EDB has already started working with companies such as GSK – companies which are well-recognised as "people developers". Others like Samsung and Unilever have also set up innovation and leadership development centres in Singapore. (Samsung’s Global Leadership Academy Southeast Asia in Singapore, its first outside Korea, will groom and train high potential leaders and manager under the Samsung Asia Elite programme, while Unilever’s Four Acres Singapore Campus will train 900 global leaders under its Unilever Future Leaders’ Programme every year.)

26. I am glad EDB has embarked on this major effort to develop new and complex skills in various vocations, and local leadership talent – with the same enthusiasm it has shown since its early days.

27. We have of course developed a much stronger training and education landscape throughout the years. Unlike the 1970s, we now have an advanced education infrastructure in our ITE, polytechnics and universities. The recent introduction of the Lifelong Learning Institute as well as the Devan Nair Institute for Employment and Employability will add to our training infrastructure. But what matters most is to get the deep involvement of leading companies, in the same way as the Government Training Centres that were established in partnership with Tata, Rollei and Philips in the 1970s.


28. In closing, I would like to once again to recognise this evening’s four Distinguished Fellows, and to thank all EDBians for the attributes you have displayed, and the energy you have put into Singapore’s transformation over the last five decades. It is that same energy, character, ‘heart work’ and gumption that will take us forward to an even better future.



[1] EDB spearheaded the setting up of the National Productivity Centre in 1967. It brought together the NTUC, the Singapore Manufacturer’s Association and the Singapore Employers Federation.

[2] The centre focuses on developing global beauty, home care and personal health and grooming products like Pantene and SK-II.