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Leveraging product development and the S'pore brand
THE Singapore government has invested significantly to help businesses improve productivity and enhance innovation amid increasing business costs and the labour crunch. We have seen some success stories of businesses making productivity gains, but must be mindful that there is only so much we can do to boost productivity and lower costs. Technology has a life cycle, and costs will always catch up. Businesses should look beyond enhancing productivity and cost-cutting to promote growth through innovation and internalisation.
Finance Minister Heng Swee Keat said in March 2016 that Singapore businesses need to restructure, innovate and find new markets, in order to remain competitive and cope with technological changes. Businesses should, therefore, consider riding the waves of long-term trends such as the increasing penetration of e-commerce and rapid technological advancements such as 3D printing.
3D printing technology is not only reshaping industries such as manufacturing and health care, but it is also providing an unprecedented opportunity for entrepreneurs to testbed their products and gain quick access to markets. 3D printing allows for rapid product prototyping, which reduces the product development cycle and enables small quantity productions. This opens up opportunities for companies and entrepreneurs to launch their novel and unique products - previously feasible only for bigger companies with ample resources at their disposal.
For instance, the fast penetration of hoverboards, which serve as a popular new age personal vehicle, is a classic case of how 3D technology can help small players gain quick access to markets. In the past, only major electronic giants were capable of commercialising such innovative products. Now, these products can be produced by hundreds of small manufacturers everywhere.
Bigger multinational corporations are also riding on the 3D printing wave to redefine their businesses and value chains. For instance, Rolls-Royce and General Motors already plan to use 3D printing technology to manufacture complicated jet engine parts. Ford Motors has also adopted 3D printing technology in vehicle production, which significantly cuts down the production time of prototypes.
The opening of South-east Asia's largest 3D printing plant in 2015 has made 3D printing within reach of businesses and individuals. Owned by Nasdaq-listed Ultra Clean Holdings Inc, this new printing plant in Woodlands opens up new opportunities for smaller businesses and entrepreneurs to commercialise their ideas and products. Prototypes can now be produced within days, thereby reducing costs. The shift from mass production to on-demand customisation will be a game-changer for the economy.
With the government's announcement to invest S$200 million in the Innovation Cluster Programme in 2013, 3D printing has been identified as one of the four key technology areas for development. Last year, the government gave a boost to 3D printing for the manufacturing sector by setting up the National Additive Manufacturing Innovation Cluster (Namic), which helps startups and spin-offs commercialise their intellectual property and access incubators and skilled manpower. Businesses should, therefore, leverage on the advancements in 3D printing and the rapid growth of the e-commerce platform to innovate and reach out to new markets, to remain competitive.
IMPORTANCE OF TRUST
With the widespread adoption of 3D printing technology, we can expect a proliferation of products with the ease of access to the market. Brand trust has, therefore, become even more important for any new product to succeed in the global marketplace.
The hoverboard is a classic example of how the lack of branding quality assurance can kill a product's growth. The array of different relatively unknown manufacturers producing a potentially dangerous product has led to scepticism about its reliability, whether real or perceived. As a result, many airlines have banned the hoverboard on board their flights, citing safety concerns related to fire hazards over the use of lithium batteries. Poor brand trust may lead to the early death of a great innovation.
Singapore businesses can leverage the Singapore brand to make a difference in the global marketplace. Unknown to many local businesses, the "Made in Singapore" brand provides tremendous consumer confidence in quality, reliability and after-sales service for many overseas consumers. Only with a strong brand can businesses capitalise and monetise their research efforts. A strong brand also means commanding a premium over product pricing.
There is no shortage of government grants and resources to help businesses build their brand and go global. Over the years, IE Singapore has helped more than 4,500 companies in international projects through its various financial assistance schemes.
Innovation, productivity and a well-respected brand can go a long way to take a product far and sustain its reach globally.
- The writer is a lecturer at NTU's Nanyang Business School, where he teaches auditing. He was previously an audit partner of a public accounting firm and has been the chief executive of companies in Singapore and South Korea.