Speech by Mrs Lim Hwee Hua, Minister of State for Finance and Transport at the Inaugural Start-up Conference, 26 Jul 2007 at 9.15 am26 Jul 2007
Ladies and Gentlemen,
1 I would like to thank Deputy Chairman of ACE, Mr Inderjit Singh; Chief Executive of Acra, Ms Juthika; and CEO of DP, Ms Chen Yew Nah, for organizing today's convention. To all the delegates present, welcome to the inaugural Start-Up Conference or the start-up of start-ups.
The Importance of Start-ups to Singapore
2 The future of Singapore lies in being able to compete on knowledge and innovation, as these are areas where we can continue to provide value and stay ahead of the competition. In this drive towards a knowledge and innovation-based economy, start ups play a crucial role.
3 In any modern economy, startups provide the fuel for growth and the force for renewal. In the last three decades, many technological and business breakthroughs have originated from new companies. The start-up and SME sector is an important engine of growth in many economies like the US, Israel, Taiwan, and even new ones like China, India and the Baltic States.
4 Even large established companies have come to realize the vitality of startups. They now look to partnering them in developing new products. No sooner than Google itself became established, it started looking to startups for new applications. Google Earth and Youtube are just two examples. The fact is, elephants may be able to run, but they can never match the agility and sprightliness of a herd of gazelles.
5 I am very happy at this event's turnout. I can sense vibrancy and excitement in the air, which makes me more convinced that the entrepreneurial spirit is very much alive and kicking. The statistics reinforce this - there has been a rise in new firm formation, last year alone, a staggering 45,545 enterprises were formed.
6 Most of the new firms are in the non-tech sectors, but the number of high tech firms has been blossoming. 3,908 high tech firms were formed last year. This nearly matches the figure at the height of the dot.com boom in 2000. They are emerging in new and exciting areas like clean technology and biotech. For example, Grahamtek, a homegrown water technology company, developed the world's first 16" reverse osmosis membrane for use at our Newater plants.
We are Interested in Helping you Grow
7 The audience here at this conference pretty much mirrors the profile of the regular entrepreneur - young and educated. He or she usually starts up a business with less than $50K and just six months of planning. This is the spirit of start ups - fast and nimble, and quick to take advantage of market trends.
8 We have been building a favourable regime to help start ups. Last year, we extended the partial tax exemption for new firms indefinitely. This means that for a new firm under 3 years, the first $100,000 of chargeable income is exempt from corporate tax. The next $200,000 is taxed at half the prevailing tax rates. What this means is that Singapore has probably the lowest tax rates for firms earning less than half a million. Indeed, things have been going very well for start ups. According to Start Up Survey, two-thirds of these start-ups turn profitable within the first three years, and 36% of them make a healthy profit within the first 12 months of operation.
9 Many of us recognize that the greatest value start ups bring to the table is the dynamism and creativity. That is why the Government should avoid doing anything that would stunt your goals and ambitions.
10 What we want to do is to help you grow. The Government will not only strive to clear every non-business hurdle that stands in your way, but also work to put in place all the necessary components of a healthy enterprise ecosystem.
11 Today, I shall talk briefly about how the Government is helping would-be entrepreneurs to start a business, sustain a business and grow a business.
Starting Up with a Kit
12 The Government is committed to making the business environment in Singapore more "pro-enterprise". We do this by removing regulatory barriers and red tape as far as possible. We will not be able to abolish rules entirely, but we will try to keep this to the minimum, while ensuring that they go about facilitating businesses and create a trusted business environment.
13 ACE and SPRING are championing this cause, but ACRA, too, is playing its part by encouraging voluntary compliance by the business community and through raising awareness.
14 The 'Regulatory and Business Guide for Start Ups' is one example of this effort. This is a joint project by ACRA and ACE, with DP Info as a strategic partner. It tells the would-be entrepreneur all there is to know about starting a new firm. I have flipped through it, and found it easy to understand and use. The important thing about this guide is that it goes beyond regulatory awareness, in providing the necessary information and tools to navigate the business environment. I would like to congratulate ACRA and ACE for this accomplishment and for their efforts in creating a pro-enterprise environment in Singapore.
15 The Online Business Licensing Scheme that can be found through the EnterpriseOne Portal in www.business.gov.sg represents another effort at simplifying the award of business licences. Info on around 260 business licences administered by more than 30 government agencies in Singapore is available there. You can even apply for multiple business licences using only one form and making one consolidated online payment. Existing SMEs can also use this online platform to update, renew and terminate licences. While these initiatives will no doubt improve efficiency for licence applications, I think more can be done to streamline licences and regulations. In this regard, we would welcome feedback from entrepreneurs on how we can do better.
Growing and Sharpening your Business Model
16 Next, I will touch on how we can help you to sustain your business.
17 As every successful entrepreneur would tell you, the best way to grow and sustain your business momentum is through building contacts or networking. Start-ups are heavily reliant on referrals. A survey showed that 64% got their referrals through existing customers and 36% from business partners. In fact, half of these start-ups specifically request for assistance in networking.
18 But we all are in an advantageous position. We sit amidst one of the most cosmopolitan places in the world. We can tap onto a global presence, right here in Singapore. Global MNCs have their offices and people here. Your potential customers from Europe, US, Asia-Pacific pass through here. You will be able to feel the vibes and explore the potential of many international markets from here. Indeed, many start-ups successfully establish an overseas presence within the first three years of operation.
19 You will also have access to networking opportunities like last week's Blue-Sky Finance Fair and Gala organized by ACE and today's convention. These are just a sampling of the excellent opportunities for start ups to link up with potential business players from all over the world.
20 We encourage you to work with larger firms so as to leverage on their market reach and expertise. We have a scheme, which you can find on the EnterpriseOne Portal, called the Local Industry Upgrading Programme (LIUP) that brings multinational corporations (MNCs) together with local suppliers of parts and services in mutually beneficial collaborations.
21 Most entrepreneurs are not fully plugged into the venture capital and business angel network as yet. These are not just for high tech firms. Many of these are in fact more than just a funding source. They can share with you on how to turn your companies into winning ideas at the critical turn. Most have started or nurtured businesses before, and have interacted with hundreds of start-ups like yours. They can get you contacts, and link you up with business partners, great business ideas and technologies.
22 SPRING has this programme known as HotSpots, HOT for Hub of Technopreneurs. It is an island-wide network of facilities that brings together start-ups, venture capitalists, established businesses and strategic partners in choice locations in Singapore. Here, you can have sharing sessions with potential investors, learn about the needs of MNCs and large companies. HotSpots has a growing business network of 2,100 companies, with 6,500 technopreneurs and employees involved in innovation.
23 One of our firms, D-max, from the ICT sector, has a system that allows cell-phone and wireless LAN users to share the same infrastructure. Through HOTestbed, it tied up with Far East Organisation to provide such a system for one of their developments.
Innovating as a means of survival
24 What will be your value proposition for growth? It will have to come from innovation. Any business with a new and working business model has innovated. It would have managed to turn an idea into something customers want, which is probably different from what others provide. Many of these ideas could be based on new technologies or exploiting existing technologies.
25 That is also the main hurdle. It is not easy to get a grasp on technology. Most of us simply do not have the specific training in certain areas to do so. Fortunately, there is no lack of people who do understand technology. Universities and polytechnics train very qualified and energetic youngsters in all fields, all raring to go and to make a difference.
26 SPRING has set up Centres of Innovation within the polytechnics and the research institute, SIMTech, to help firms develop technological capabilities to build or grow their businesses. They are one-stop centres offering technology consultancy and advice. There, you can find the necessary competence to develop technology applications that you can quickly adopt. You can even "borrow" experienced researchers from our research institutes through secondments to your company to work on new products.
Why this inaugural Start-Up Conference is important
27 This is what today's inaugural Start-Up Conference is about - for everyone to get in touch with issues like funding and running a company. We do not purport to know everything. So the best way is to learn from others who have been down the path before. Take this opportunity to share knowledge about strategies and to gain access to new business networks and financing sources such as VCs and business angels.
28 We will also have several business clinics for entrepreneurs to have one-on-one consultations with serial entrepreneurs and VCs. You will receive first-hand advice on matters such as government funding, compliance and regulatory matters, and compliance issues.
29 In conclusion, I hope all of you here today will pick up many useful ideas and take that next step of starting up or growing your business. You are all our potential Sim Wong Hoo's and I'm sure that, with the right amount of knowledge, strategy and good timing, some of you out there can turn such potential into bountiful reality.
30 Thank you everyone and I wish all of you entrepreneurs the best for your start-ups.