Singapore's next leg of growth depends on local companies spreading their wings overseas, which would mark a shift from the strategy of simply pulling in more foreign investment, the Singapore Business Federation (SBF) said yesterday.
Its strategy was outlined in the business chamber's new economic position paper, which offered a raft of suggestions to support business growth.
"If you look at Singapore now, most of the resources are still concentrated on bringing in foreign investment. But we now need an equivalent set of institutions and policies to help our companies go overseas," said OCBC board member Teh Kok Peng, who chaired SBF's focus group on competing on a global platform.
A key thrust in the report was that Singapore needs to take a decisive shift towards building a strong base of local enterprises with a global reach, or risk losing its slice of the pie in a fast-changing world economy.
One suggestion was to appoint a new minister to help develop local enterprises, said the report, which was signed by 28 trade associations and chambers and around 70 top- level executives before going to the Government next Tuesday.
"There are not enough Singapore companies going overseas," said SBF chairman S.S. Teo, noting that in 2010, the Government set a target to produce 1,000 globally competitive companies with revenues exceeding $100 million by 2020.
"We took a count; I think there are only 300 so far. We don't think this target can be reached."
Dr Teh said the Government should also give local firms more opportunities to participate in major public projects and consider "government M&As (mergers and acquisitions)" that will reduce the number of state agencies to make them easier for firms to navigate.
The SBF also proposed investing part of workers' Central Provident Fund money in the local bourse. This would boost the limping share market to fund the expansion of listed companies.
The SBF identified a growing number of "middle class" companies with stable earnings that exceed the bar of the Catalist junior board, but are not quite big enough for an SGX mainboard listing. A new market platform could be developed for these firms, it said.
The SBF said it has never before put forth a paper of such breadth to the Government, touching on a range of issues from foreign worker levies to talent development.
Mr Teo noted that some of the ideas proposed could appear "radical" and require "substantial changes" to existing policies. "But we have to act decisively or risk greater failure in the years ahead," he said.
"The newly elected Government has a fresh and strong mandate. There is no better time than now to take bold and decisive moves that will strengthen Singapore's position."
Member of Parliament and banker Liang Eng Hwa commended the SBF's "deep dive into a wide range of business issues", adding: "In the new Cabinet, we have two full ministers at the Ministry of Trade and Industry, one specifically overseeing industry. I suppose the Prime Minister recognised the added attention needed."