Amid a slowing economy, Singapore companies can tap digital technology and the country's network of free trade agreements (FTAs) to stay nimble and expand their businesses overseas.
The growth of e-commerce has seen DHL customers shipping designer shoes to the rest of the world, and traditional electronics companies manufacturing life sciences equipment, DHL Express Singapore managing director Christopher Ong told a panel at the FTA Symposium 2019 yesterday.
"We will never be able to compete on price with countries like Thailand, Indonesia and Vietnam, but there are opportunities for people who are prepared to develop a brand and go out there to market high-end products," he added.
But fellow panellist, CIMB Private Banking economist Song Seng Wun, said that while cross-border e-commerce is booming, barriers to digital services are rising too.
Mr Frank Debets, managing partner of PwC Worldtrade Management Services, added that with the way trade disputes are playing out, companies "don't know what the short-term future holds".
But Singapore is in a good position to move the debate on international trade forward because of its size and level of development, he said. It has to think more carefully about what it ought to give away at the negotiating table, and what will benefit its economy and exporters.
How businesses can find opportunities from the Republic's network of FTAs and navigate hurdles was the focus of the one-day event at the Shangri-La Hotel, organised by the Ministry of Trade and Industry (MTI), Enterprise Singapore and the Singapore Business Federation (SBF) to commemorate 20 years of the nation's FTA strategy.
MTI Permanent Secretary Gabriel Lim, also on the panel, assured businesses that the Government is committed to creating more regulatory space, so that they can take advantage of Singapore's FTA network to export to the world. It will also train and upskill workers through schemes such as SkillsFuture, to maintain the competitive advantage of Singapore's workforce.
Mr Ong said these assurances give businesses the confidence that even if Singapore is the first to get hit in a downturn, it will also be the first to recover. But businesses must take the initiative to transform. "Many Singapore companies still use traditional ways of distribution, such as looking for overseas distributors," he added.
"But the more progressive companies realise that if the world is to be their oyster, they need to digitalise by going online and shipping directly to end-consumers."
Moderator Evan Rogerson, an adjunct senior fellow at the S. Rajaratnam School of International Studies, pointed out that small and medium-sized enterprises could face difficulties leveraging FTAs because of their complexity.
Mr Lim said agencies like MTI, Enterprise Singapore, SBF and other trade associations and chambers have been holding roadshows, lectures and workshops to help businesses understand the pacts. More resources are also being put online. He also encouraged firms to explore South-east Asian markets, which remain a bright spot in the global economy.
"There's a lot we can do around us. We already have in place a network of agreements that allow us to venture into these markets... and take advantage of tariff reductions and differentials with our trading partners," he said.
Mr Lim said that although much attention is on the United States-China trade war, both countries account for only about a third of the global economy. "The other 60 per cent remains for all of us to reach out to... and digital (technology) will enable many of our traditional constraints to be overcome."