Innovation has to be the key driving force for Singapore's economic transformation, and businesses that use the time now to change will be better positioned when the crisis is over, said Senior Minister of State for Trade and Industry Koh Poh Koon yesterday.
Dr Koh told Money FM 89.3's Howie Lim: "The longer-term competitive advantage for companies and the Singapore economy as a whole will have to be driven by innovation, how we can put more innovative and competitive offerings in terms of products and services, to continue to capture opportunities."
This spirit of innovation is especially important for small and medium-sized enterprises (SMEs), Dr Koh noted, adding that SMEs play a strong partnership role with bigger firms and also supply intermediary products and services.
"SMEs that are digitised, that can jump on the bandwagon of the digital economy can tap overseas markets without having to leave Singapore... it can help them internationalise much more easily."
But companies can find innovation a challenge, especially when they do not have the bandwidth to transform and can be manpower-lean without the necessary expertise from scientists and researchers.
Dr Koh said: "Innovation doesn't have to be earth-shattering; even incremental innovation can be something of an advantage to SMEs."
He pointed to the Singapore Institute of Manufacturing Technology innovation factory announced in this year's Budget. It will work as a pilot-scale production line where SMEs can work with technology experts on product design and test their viability.
If firms create something with market potential, they can then bring the product into model factories to launch a pilot production.
Agritech is another sector where the Government wants to encourage new innovation.
Dr Koh said: "This recent Covid-19 issue has sharpened awareness of Singaporeans that we need to be more resilient in our own food supply, so growing a food innovation system, having our own urban farms, for example, will add that measure of resilience to our own food supply."
Companies need to have the right mindset and be unafraid to fail, but also know when something does not work.
"The first thing (required of) businesses going into transformation is a clear business goal," Dr Koh added. "It is important then for businesses to not be struggling in this alone, but (to be) part of a network of companies within a trade association for example.
"An industry association will usually have a clearer idea of where the industry is heading for the medium and longer term."