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Now's the time for Singapore to grow the next crop of homegrown MNCs: Chan
SINGAPORE has a "historic opportunity" to grow more local companies into global champions, said Minister for Trade and Industry Chan Chun Sing on Tuesday.
As more such champions emerge, they will create better jobs for Singaporeans and uplift small and medium-sized enterprises (SMEs) to become global companies in their own right, he told reporters, while on a visit to e-commerce platform Shopee, which is owned by homegrown consumer Internet company, Sea Group.
With a market capitalisation of US$89 billion, Sea is leading the charge as South-east Asia's most valuable tech company and one of the world's hottest stocks. Its game development arm Garena has produced hits in markets extending to Latin America, while Shopee is among the top-performing e-commerce platforms in the region.
Other Singapore-founded companies are also making waves. Health-tech startup Biofourmis, for instance, recently raised US$100 million in a Series C round. The company, which uses wearable devices and data analytics to provide personalised healthcare, got its start in Singapore, and is now headquartered in Boston.
Pointing to such success stories, Mr Chan noted Singapore's traditional competitive advantages like the rule of law, strong talent pipelines and a robust intellectual property regime. However, he added that the Republic has at least three new, unique advantages that could make it fertile ground to grow a new generation of champions.
"First, Singapore is not caught up by the geopolitics - and we don't want to be. In fact, we want to able to serve global markets, across different geopolitical and economic groups," he said.
"Second, interestingly, is the fact that we don't have a large domestic market - and we have turned that into a strength. A company like Sea, from Day One, started its operations aspiring to be a regional and global company. Paradoxically, some companies that start off in the biggest domestic markets, tend to focus on the domestic marketplace. But many companies have learned to operate out of Singapore to serve the regional markets."
He added, "This allows them to build up solid capabilities to work at a global level, yet localise their products and services for their respective markets."
The third factor Mr Chan identified was the fact that the Singapore brand continues to command a trust premium. A high level of trust, he said, will be a tremendous advantage for a new generation of companies producing highly personal services like healthcare and financial products.
Kiren Kumar, assistant chief executive of the Infocomm and Media Development Authority, also speaking to reporters, noted that the tech scene in Singapore has changed significantly in the past decade.
"We have today what we did not have before, 10 years ago. We have globally leading technology giants, like Google, Facebook, Alibaba and others, having significant operations and bases in Singapore. We also have, for the first time, large, locally grown, global champions, like Sea Group, Grab and Razer. And we also have a very vibrant tech startup ecosystem."
Companies who make it big in Singapore generate spillover benefits for the economy, like better wage growth and prospects for employees in the same industry, said Mr Chan. He disclosed that Ministry of Trade and Industry figures show that wages for the same profile of employee, in the same occupation, tended to be higher in larger companies than smaller ones.
Another key benefit of growing large companies is their ability to partner and uplift SMEs in the same ecosystem, he added. He cited Shopee as an example of a tech heavyweight that has partnered and trained many local SMEs to pivot their businesses online; it has also helped them to cope with the shock of Covid-19 to brick-and-mortar shops and lifestyle sectors.
For instance, alongside Amazon, Lazada and Qoo10, Shopee partnered Enterprise Singapore on an e-commerce booster package, providing end-to-end support for businesses, including heartland enterprises, to go online. Next year, Shopee has plans to help online-ready businesses in Singapore expand into Malaysia.
Mr Chan said that such economic benefits generated by large companies are a key reason Singapore expends the effort to help enterprises to move up the corporate pyramid - turning micro-enterprises into small ones, small ones into medium ones, and medium ones into large ones.
"We are at a historical moment in our economic development," he concluded. "We have a historical opportunity now, to develop a new generation of companies based on technology, talent and ideas. This will truly allow us to transcend the tyranny of geography and size."