Seven months into his new role as CEO of International Enterprise (IE) Singapore, Lee Ark Boon is streamlining efforts at the trade development agency to prioritise high-growth companies over those with low growth, a move he says will boost the Republic’s economy in the medium term.
We are going to focus more attention downstream on what is the economic value captured back to Singapore. Traditionally, we have always helped everyone who comes to IE, but with a growing demand, with limited resources, we need to prioritise and sharpen our focus, said Mr Lee in an update on the agency’s streamlining efforts yesterday.
We need companies that are growing. The national average is about 6 per cent growth for companies, what we are hoping is for the companies that we work with to punch above 6 per cent.
We want to work more with companies that are growing at close to double-digit or above double-digit rates We need to accord higher priority to the companies that can bring back the most value to the Singapore economy and bring back the most value in creating skilled jobs.
The high-growth sectors include financial services, infrastructure, legal, accounting, logistics, and advanced manufacturing, he said, adding that the new focus will likely lead to a significant positive impact on Singapore’s gross domestic product in about 10 years.
Currently, IE Singapore is working with more than 1,000 companies with high-growth performance.
More companies have come to IE Singapore for help, with the agency providing 34,000 instances of assistance last year, up from 28,000 in 2014.
However, some economists cautioned against too narrow an approach that could lead to some unpolished gems � such as those in the low growth retail and food & beverage sectors being bypassed.
UOB economist Francis Tan said: We have to be careful, as even some companies from low- growth sectors have the potential to become high-growth companies. All industries do have potential, and a lot may fall through the cracks. Take BreadTalk, for example. They are a bakery from a low-growth industry and could have fallen through the cracks in today’s assessment.
It will be hard to determine which company has potential and which doesn’t. If the agency gives support to a company from a high-growth industry and the company is not performing well, it will also be wasted resources.
Also, some companies are low-growth and if there is no help given to them, how can they become high-growth?
They would logically want to place their bet on the fastest racing horse. But if someone has no track record, IE would have to assess them and operationally everything would seem to be back to what it used to do be.
As it fosters tighter relationships with high-growth companies, IE Singapore will also streamline its internal operations, so that one manager can work on both strategy planning and grants assistance, compared with two previously.
There will be continued assistance for low-growth companies through partnerships with the trade associations and chambers (TACs) as well as continued support through schemes such as the Market Readiness Assistance, Local Enterprise and Association Development and the International Marketing Activities programmes.
The trade development agency is exploring working with TACs to set up overseas centres to provide the support.
For companies that have already gone overseas, IE Singapore will continue to provide assistance regardless of their growth potential.
Source: Government of Singapore