Businesses urged to collaborate to maximise limited resources

Businesses urged to collaborate to maximise limited resources
Finance Minister Heng Swee Keat. Photo: Jason Quah
Published: 10:17 AM, November 4, 2015
Updated: 12:08 AM, November 5, 2015

SINGAPORE — Business leaders should explore ways to work together to achieve scale and reduce overheads amid land and labour constraints here, Finance Minister Heng Swee Keat said today (Nov 4).

Such collaborations can be in the form of a common technology platform shared among small and medium enterprises (SMEs), common kitchens for the food industry or sharing of infrastructure, he said.

“In the future economy, we will face even tighter resource constraints than before, in land and labour, as our workforce growth slows. As such, it is even more important to enhance value-creation by optimising resources that we have. We need to aim to do more with less,” he said at the Semi-Centennial Leadership Conference organised by the Singapore Business Federation (SBF).

The event brought together business leaders to commemorate SG50 and reflect on the past, present and future of the business environment here.

Mr Heng, who chairs the economic review committee, reiterated in his opening remarks the need for Singapore to become a “value-creating” economy — which he spoke about to the media last week after a meeting with SBF — moving away from one that merely adds value as the global landscape evolves.

He explained that a “value-creating” economy is one that focuses on new possibilities and opportunities, and on innovation and differentiation.

“It competes on the basis of special capabilities. If we are simply producing what the rest of the world is producing, we will not be able to command a premium, or sustain our competitive edge. We have to produce what the rest of the world is not producing, or at least, not much of,” he said.

This model is important to create good jobs for the people, ensure that Singapore remains a base to grow innovative entrepreneurial companies and provide a conducive environment for companies to succeed.

Mr Heng said there is no “golden formula” for businesses to create value. But, there are examples of those who have managed well in the five areas critical for successes in the future economy. These areas are companies, jobs, markets, resources and technology.

An example of a company that has tackled these issues well is Boustead Singapore, Mr Heng said. It started out as a major distributor of brands such as Procter and Gamble, Cadbury and Johnnie Walker in the 1960s. When many of these brands set up their own offices here, Boustead re-strategised to offer infrastructure-related engineering services, thus building new business capabilities for itself. 

“Many businesses fail because they stick to the same business model and are unable to remain competitive when their peers develop similar or more superior competencies. The best business leaders are able to learn and unlearn what they know to create value by reinventing the company,” said Mr Heng.

SBF chairman Teo Siong Seng echoed Mr Heng’s sentiment on the importance of staying competitive and innovative. He urged companies to continue tapping opportunities outside Singapore. “Singapore companies must gear up and look beyond our shores and tap on opportunities that will come with developments such as the ASEAN Economic Community, the One Belt One Road initiative by China, the Trans-Pacific Partnership and the expanding trade and investment links with Asia,” Mr Teo said.