Branching out
Business Times - 27 Jul 2006
THE annual BlueSky Festival is the brainchild of the Action Community for Entrepreneurship (ACE), a movement that involves both the private and public sectors to create a more entrepreneurial environment in Singapore.
This year's theme, 'Singapore and Beyond - Linking for Opportunities', reflects a key message by new ACE chairman Lee Yi Shyan that Singapore companies need to venture overseas for sustained growth in the long run, and that Singapore needs to have both local and foreign enterprises to make it an enterprise hub 'teeming with buzz and vibrancy'.
Mr Lee, who is Minister of State for Trade and Industry, became ACE chairman and Minister in charge of Entrepreneurship in May, taking over both posts from Vivian Balakrishnan, who is now Minister for Community Development, Youth and Sports. One of ACE's first initiatives since then has been to transform this year's BlueSky Festival into a regional platform for entrepreneurs from Indonesia, Malaysia, Vietnam, Thailand and Singapore to network and exchange ideas.
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I share the belief that the more firms in the enterprise ecosystem, the more dynamic the ecosystem will be and the more comprehensive the soft infrastructure supporting the firms' success,' Mr Lee told BT in an email interview. 'Equally importantly, foreign entrepreneurs will bring with them valuable expertise that our enterprises can leverage on and they are potential partners for our local businesses to collaborate with as they venture abroad. As for our local enterprises, they can provide a base of strong supporting industries and strategic partnerships to foreign entrepreneurs.'
Expanding abroad is a necessity for Singapore companies seeking sustained and profitable growth, given the rapid pace of globalisation and Singapore's open economic policies, he said. 'This is especially so when the local industry saturates and matures. Growing markets around the world such as India and China offer abundant opportunities and even better margins for some.'
We recognise that internationalising a business is not an easy process and does not come without risks. ACE has an internationalisation mentoring programme to help these companies tap the experience and foreign business networks of ACE members and experts.' Government agencies also have comprehensive networks overseas and programmes to help companies link up with the right parties.
Making headway
Launched in May 2003 with the aim of remaking Singapore into a creative and entrepreneurial nation willing to take risks to create fresh businesses, ACE brought together an eclectic mix of people from the private and public sectors. Its birth was hardly auspicious, coming just after the height of the Sars crisis in 2003. Doubters wondered if it was possible to foster entrepreneurial spirit through an initiative chaired by a government minister and backed by a high-level multi-agency public sector secretariat.
But three years on, ACE has a lot to show, for a movement that had the odds stacked against it from the start. Working together with Spring Singapore, which oversees the development of SMEs here, and other government agencies such as IE Singapore, the Ministry of Trade and Industry and the Economic Development Board, ACE has pushed for changes to the regulatory environment, worked to help start-ups obtain venture capital and other funding and asked the government to provide more tax incentives for start-ups. All this to try to persuade more people to take the plunge and start their own business.
Indeed, funding help has been one of its most tangible achievements so far, with various government-supported programmes and schemes to support small businesses launched based on ACE's recommendations.
The Deal Flow Connection, a platform to match SMEs with venture capitalists and other investors, has helped 927 companies to facilitate deals since its launch in 2003. The SME Access Loan Scheme, an innovative loan securitisation programme to help SMEs raise funds from capital markets, has already lent more than $100 million to over 400 SMEs since its launch in April last year in a pilot partnership with DBS Bank.
And this is just the start, said ACE deputy chairman Inderjit Singh, who heads the ACE sub-committee in charge of finance. 'We are hoping more banks will also do this. My committee will study this and make a recommendation to the Ministry of Finance to make loan securitisation a norm in Singapore.' Since 2004, ACE has also commissioned an annual poll of businesses to rank government agencies which play major roles in regulating businesses based on how business-friendly they are.
Mr Singh, also chief executive of semiconductor testing and assembly service provider Infiniti Solutions as well as a Member of Parliament, has been a strong and vocal supporter of ACE from the start. Looking back on the three years, he believes ACE has made considerable progress.
'Starting your own business is now viewed as an exciting thing to do, compared to working in the government or large companies. Schools and educational institutions have also been actively promoting entrepreneurship. This is a significant shift away from the traditional academic approach in education,' he said.
'I think one of the most significant accomplishments is the mindset change we have managed to achieve within the civil service. In the past, we had an enlightened leadership willing to allow entrepreneurship to flourish, but at the other levels in the civil service we saw unwillingness to support and change things. Today, most of the civil service and government agencies are willing to listen and help.'
'Our annual ranking of government agencies helps determine those who are pro-enterprise and those who are not quite. We hope to encourage the less pro-active to be more supportive of the entrepreneurship drive.'
The way ahead
He also believes that ACE's model of a public-private partnership is 'the right way to go' for Singapore. 'The way the government implements rules and regulations and how it deploys funds affects the general economy and operating environment, so government involvement in the promotion of entrepreneurship is vital.'
The challenge ahead for ACE is to help companies here create 'global linkages', he said. 'We have made very good progress in transforming our local environment to be more supportive of entrepreneurship but the environment outside Singapore is not within our control. How we can support our entrepreneurs to be also successful regionally and globally will be a challenge we will have to work on.'
The movement also needs as much support from the private sector as it can get. 'We are tapping on successful entrepreneurs and businessmen who are very busy. Many of them have been very generous with their time but a few really have difficulty giving more, because of their heavy responsibilities.'
But it is 'definitely much easier' to start a business here today, compared with five years ago, he said. 'Rules and regulations are more conducive, the financing environment is much more vibrant and people are much more willing to take up the challenge of becoming entrepreneurs. We are heading in the right direction and in a few years we will see the success created by our efforts.'
