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Leading the way: Enhancing industry and enterprise competitiveness

Wednesday, May 6, 2015 - 05:50

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HOME-GROWN local enterprises are the backbone of a dynamic economy. In Singapore, SMEs account for 50 per cent of the economy and employ nearly 70 per cent of the workforce. Two key Singapore government enterprises lead the effort to promote and develop local enterprises on a sustained basis.

Spring Singapore and International Enterprise (IE) Singapore in a joint initiative through the Local Enterprise and Association Development (LEAD) programme have been working hard over the past 10 years to enhance the competitiveness of both local industries and enterprises.

As the LEAD programme marks its 10th anniversary this year, the government has decided to support it with renewed vigour, with plans to partner Trade Associations and Chambers (TACs) in their outreach efforts.

“Over the past 10 years, the LEAD programme has supported many impactful projects that have both transformed industries and pushed sectors forward to remain competitive. LEAD will continue to be a programme that is responsive to the challenges of the industry, one that champions new and innovative industry initiatives, and one that helps our partners to help local SMEs,” says Tan Kai Hoe, chief executive of Spring Singapore, which administers the LEAD programme along with IE Singapore.

The TACs are given funding support to enable them to lead in industry development and drive initiatives to improve the overall capabilities of all SMEs in their industries. Already, 30 leading industry associations and business chambers are on board the LEAD programme, and a third of their participating members have embarked on a variety of upgrading and market development projects.

These associations include business associations and chambers from the aerospace, automation, engineering, education, logistics, retail, construction, sustainable development, foods, infocomm, manufacturing and engineering industries.

“Through LEAD, industry associations help rally enterprises to jointly develop their industry sectors. With a well-conceived industry development roadmap combined with revenue generating activities, associations will also move towards self-sustenance,” says Mr Tan.

Launched in 2005, the LEAD programme covers a wide range of development areas including technology and infrastructure, expertise and managerial competence, business collaboration, intelligence and research, as well as advisory and consultancy.

“The LEAD programme has been an important platform for TACs to work together with government agencies to upgrade and transform the industry,” says Douglas Foo, president of the Singapore Manufacturing Federation.

“It has been a very successful endeavour. Since 2005, LEAD has supported 30 TACs, including Singapore Manufacturing Federation (SMF), on 54 industry-upgrading projects, totalling more than S$106 million and benefitting about 38,000 local enterprises. At the same time, SMF looks forward to more such efforts that help to boost and improve the Singapore economy,” he adds.

Singapore Business Federation chief executive officer,  Ho Meng Kit, suggests that the LEAD programme could potentially look at enhancing collaboration between TACs to advance advocacy initiatives and projects across sectors.

“This would allow the more effective use of resources and help shorten the incubation period of projects. Many industry observers have commented that Singapore businesses and TACs rarely collaborate. LEAD can play a part to encourage projects across sectors amongst a few TACs,” he adds.

Among the impactful projects undertaken by TACs with funding support from the LEAD programme, to help their members build industry-wide capabilities are those by the Container Depot Association of Singapore (CDAS) and the Restaurant Association of Singapore (RAS).

The container depot and trucking activities are key pillars supporting Singapore’s global trade. The CDAS realised that the transport deployment and scheduling systems were not optimised, resulting in long queues at depots and ineffective deployment of the truck fleets.

“To improve the overall sector productivity, CDAS implemented a Containerised Traffic System (CTS) to enable depot operators, trucking companies and port operators to plan and deploy trailers more efficiently through better information integration,” said Mr Tan. The CTS generates real-time operational progress reports which enable container depot, trucking companies and port operators to take immediate actions and tackle bottlenecks.  

Another impactful project executed with LEAD support is a multi-year initiative by RAS to improve the productivity of F&B companies through the development and enterprise-level implementation of 5S workplace organisation tools. 5S (Structure, System, Sanitise, Standardise and Sustain) is a structured programme on housekeeping practices to systematically achieve organisational cleanliness,
standardisation in the workplace, and improve productivity.

Through the programme, RAS assisted around 80 establishments from over 15 F&B companies. A total of 40 assessors and auditors have also been trained by RAS to ensure continued compliance of the methodology. Restaurants that have implemented 5S have reported benefits such as 90 per cent time savings for staff to retrieve items and a substantial increase of use of floor area for revenue generation.  

“There has been a strong emphasis on improving our companies’ productivity across many of the TAC projects. More companies are realising that it is not sustainable or strategic to drive business growth through manpower and resource expansion in the long run,” says Spring Singapore’s Mr Tan. “Instead, they are looking for new ways to increase their efficiencies and competitiveness in order to achieve
sustainable, productivity-led growth. Given this focus on productivity, TACs have led the way by driving various productivity and talent initiatives over the past 10 years. To increase productivity, some TACs have led initiatives to develop productivity information and knowledge, and facilitate productivity improvement projects.”

Another trend is for TACs to lead initiatives to attract talent into their industries. “We have seen that young graduates tend to prefer some industries over another due to the image of the sector. As a result, some TACs have undertaken initiatives to better brand their sectors so as to attract young graduates. An example of this is the Singapore Logistics Association which has provided scholarships, undertaken career fairs and launched the supply chain challenge to attract young talent into the sector. Some TACs are also matching students with SMEs to increase the amount of talent entering SMEs.  This is a boon to SMEs that have recruitment challenges,” says Mr Tan.

Looking ahead, the Spring Singapore chief says: “As the labour growth over the next few years is likely to remain tight, it is important for companies to develop their existing workforce and retain talent. This is an area that TACs could assist SMEs on. Secondly we would like to see more TACs assisting SMEs to build their competencies and improve productivity. This would allow SMEs to grow sustainably and get more returns from the resources they invest. Thirdly, we would like TACs to take the lead to test bed new ideas that could provide innovative solutions to SME challenges.”

“If there are initiatives that the TAC and their members want to embark on that develop the sector, grow SMEs or build SME capabilities, the government is open to support such initiatives,” says the Spring Singapore chief.

TACs can also tap the LEAD programme to embark on cross-sector collaborations. With increasing interdependence across different players and sectors in the value chain, there is value to be created in cross-sector projects to enhance processes and customer interactions with goods and services. An example is how the retail industry can work with the logistics sector to build an ecosystem that will support retailers in their e-commerce activities, he adds.

It has been noted that the TACs need to upgrade and strengthen their own capabilities to assist their respective industries more. Collectively, TACs in Singapore provide access to the majority of SMEs in the country. This is important for outreach activities and getting feedback. Furthermore, the TACs have good domain knowledge of the various sectors they represent. This provides a good base to contextualise initiatives to assist SMEs.

“TACs should also invest in developing capabilities through studying industry trends and technology changes that may affect their industry. This is important in facilitating SMEs to be prepared for change and leverage trends that grow and/or affect their business,” says Mr Tan.

“We also hope that TACs would be able to invest time and resources to develop strategic and transformative industry plans that outline the direction the industry needs to take to grow and secure its place in the future.

“Most importantly, in line with SkillsFuture’s objective of creating more opportunities to develop every Singaporean to his fullest potential, TACs should take the lead to train and enhance overall competencies in our industries.”

An important aspect of enhancing industry and enterprise competitiveness is to encourage SMEs to internationalise their operations in view of Singapore’s relatively small market which places constraints on future growth.

“Overseas expansion is an important strategy to help companies, including SMEs, sustain their growth. There are enormous benefits when companies venture abroad,” says International Enterprise (IE) Singapore chief executive officer, Teo Eng Cheong.

Going overseas helps them access resources and possibly overcome domestic constraints such as manpower and rising business costs. It also enables companies to diversify their business and scale up operations more easily.

At the same time, as companies go on the global stage and compete with others, they will become more productive and innovative. Importantly, internationalisation contributes back to Singapore in business spending and job creation for Singaporeans. “In the current globalised world, our talents will benefit from gaining international exposure. As the global economic recovery gains firmer footing, the trends of urbanisation and consumerism, especially in Asia, are going to bring about many opportunities. Our companies should seize these opportunities in order to grow,” says Mr Teo.

The TACs play an important role in helping to boost companies’ and SMEs’ overseas expansion as they take the lead in helping their member companies manage economic restructuring, embark on new industry or in-market projects to elevate industry competence. By partnering TACs government agencies can reach out to more SMEs and help them grow by taking them overseas.

“We see TACs as strategic partners to help Singapore companies go overseas successfully. They play a huge role through participation in international trade fairs and overseas business missions. IE Singapore’s International Marketing Activities Programme (iMAP) provides support for companies to access business opportunities when they participate in such business missions or the Singapore Pavilions at trade fairs led by TACs. Through iMAP, we support over 3,000 companies every year in these activities,” says Mr Teo.

IE Singapore also provides assistance to the TACs via the LEAD programme. While iMAP is a broad-based programme with pre-defined and established activities such as fairs and missions, LEAD is a customised programme with the flexibility for the TACs to plan the scope of activities or initiatives.

Using the LEAD programme, TACs help to increase awareness of the local industries’ capabilities to overseas buyers and generate business leads through trade shows and in-market showcase events. TACs can also front and invest in industry branding initiatives to better position the industry’s value propositions and gain global mindshare. Such efforts would lend credence to the market and promote Singapore enterprises more effectively, says the IE Singapore chief.

As the LEAD programme completes 10 years, it is noteworthy that over the years, TACs have been working closely with IE to explore new in-market platforms and industry efforts to help companies more effectively.

An example is the IE Singapore-SCCCI Singapore Enterprise Centre (ISSEC). China is a market with huge potential for SMEs but many SMEs require market information and guidance to venture into China. The Singapore Chinese Chamber of Commerce and Industry (SCCCI) therefore joined hands with IE to launch the ISSEC, a one-stop centre in Shanghai for SMEs venturing into China. It offers one-to-one advisory services, market information and business leads.

ISSEC has helped over 2,000 companies so far through outreach activities, providing in-market advisory as well as useful contacts and leads like suppliers and distributors.

For instance, ISSEC introduced a Direct Imported Goods (DIG) centre to a food manufacturer. The company has since managed to place its products on the shelves of four out of 15 DIG outlets.

Mr Teo highlights that ISSEC also assisted an early childhood education company to expand into Changsha by sharing the various regulations and considerations to set up an education business, which is a restricted sector in China.

While the TACs have been playing a key role in helping to enhance industry and enterprise competitiveness, TACs themselves need to upgrade and strengthen their own capabilities to do an even better job. In this too, Spring Singapore and International Enterprise (IE) Singapore are contributing significantly.

“The TACs have a challenging job in continually engaging their members, while keeping up with the changing environment to meet their members’ needs,” says Mr Teo.

“TACs may not always have all the expertise required to carry out industry development and market access projects on their own. So they need to leverage partners and in-market experts to support them.  By doing so, TACs are able to shorten their learning curve and gain experience to transfer these skills and knowledge back to their own association and strengthen in-house capabilities. At the same time, TACs would need to keep expanding their network and connections to continue helping their companies.”

“Through the LEAD Programme, IE and Spring have fostered close partnerships with the TACs, who are our industry champions. We see TACs continuing to play a pivotal role in guiding companies on their productivity exercises and capturing opportunities overseas. We will continue to support them in the best way we can,” says Mr Teo.