PM Lee Hsien Loong at the SME Conference at the ASEAN-Australia Business Summit

Thank you, Prime Minister Turnbull. 

Ladies and gentlemen, it is my great pleasure to join you today at the ASEAN-Australia Business Summit’s Small and Medium-sized Enterprises (SME) Conference. The topics of this Conference, which Prime Minister Turnbull has just outlined, highlight our shared interest in the development of SMEs and their business networks and overseas markets.

Shared Strategic Interests, Complementary Economies

SMEs are an important part of the economy of many countries. They are an engine of growth, especially in rapidly developing economies, like in ASEAN, where SMEs already account for between one third to half of the GDP of the countries, and contribute up to a third of the exports. SMEs are also a source of jobs, accounting for at least half of total employment in ASEAN countries.

But more importantly, as Prime Minister Turnbull pointed out, SMEs are engines of innovation. They embody the spirit of enterprise. Many SMEs begin life as start-ups, before scaling up into market leaders. Successful SMEs often venture overseas, braving new challenges in search of fresh markets and opportunities.

That is why many governments today are focussed on helping SMEs grow. They support them with targeted schemes and resources. They provide them with the right environment, institutions and programmes. And they help SMEs enter new markets, and develop and adopt new technologies.

For example, in Singapore, we have grant schemes and programmes to encourage SMEs to improve their productivity and capabilities, and to form partnerships, both locally and abroad.

And we support our SMEs to internationalise and to seize opportunities overseas. To do so, we operate nine “Singapore Centres” in major cities around the world. These are points of contact for Singapore-based companies seeking to enter the specific market, providing them with information and plugging them into business networks there. Our approach is to promote entrepreneurship in Singapore. They can be Singapore entrepreneurs, or they can come from other parts of the world, but have decided that they want to base in Singapore and take advantage of Singapore – our facilities, resources, opportunities, networks and also the support which the Government will give in order to help them to thrive and prosper.

Australia has a similar programme, you have the Landing Pad programme, which has five centres in different countries, including one set up in Singapore. The Landing Pads bring together start-ups, research institutions, multinational corporations and leading technology players to create opportunities for investment, mentorship and partnership. The Landing Pad in Singapore has been quite successful, and is already incubating its fourth cohort of companies, more than a dozen in all.

ASEAN SME Development

At the ASEAN level, SME development is a key focus of our economic cooperation.

ASEAN is currently implementing a ten-year Strategic Action Plan for SME Development. The recent initiatives include setting up an ASEAN SME Online Academy to offer business training courses. Last year, together with the ASEAN Business Advisory Council, ASEAN established a mentorship network to help SME leaders to grow and develop. It makes sense for our SMEs to thrive, prosper and extend beyond the region, including to Australia. And it makes sense for Australian SMEs to come and to do business in ASEAN.

ASEAN’s Market Potential

First, ASEAN’s economic fundamentals are strong, and the prospects for growth are good. ASEAN is a large and growing single market of more than 600 million people, which should become the fourth-largest in the world by 2030. Prime Minister Turnbull said it is already the sixth largest, but relatively speaking, we will grow even larger. Income is also growing in ASEAN countries. By 2020, by the end of this decade, ASEAN’s annual consumer spending could reach US$2.3 trillion. According to the Asian Development Bank (ADB), by 2030, just over a decade from now, the middle class in Southeast Asia is expected to make up two thirds of the population.

Secondly, ASEAN is enjoying a demographic dividend, with more than 60 per cent of its population under 35 years old. This means a steady workforce and a growing consumer market in coming years. And it will be an important driver of the region’s future prosperity.

Thirdly, ASEAN continues to work towards regional economic integration. The global mood may be moving in the other direction, but within ASEAN, in South East Asia, we are trying our best to strive forward to deepen integration, deepen interdependence, work together, to trade, open up markets and co-prosper together. Since the formation of the ASEAN Economic Community (AEC) in 2015, we have lowered entry barriers and reduced transaction costs for businesses. We also have a comprehensive, high-quality ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), which is ASEAN’s most progressive FTA. These initiatives are important and useful to businesses seeking to enter or grow their presence in ASEAN markets and beyond.

Digital Economy

One particular area of opportunity is the growing digital economy in ASEAN. Prime Minister Turnbull also spoke about this just now. It is still in its infancy, but it is rapidly becoming bigger, and it is very vibrant. Last year, Southeast Asian start-ups attracted a record US$8 billion from investors; these start-ups include Grab, Go-Jek, and Sea, which have quickly become household names. There is a vibrant scene of innovative start-ups, venture capital platforms and business opportunities in many ASEAN countries. Singapore itself has welcomed a number of tech accelerators such as Telstra’s Muru-D, Gemstar Technology and Collective Campus from Australia, which you may be familiar with.

ASEAN-Australia Digital Standards Cooperation Initiative

This year, Singapore is chairing ASEAN. During our Chairmanship, ASEAN is pursuing an Agreement on E-Commerce. In order to streamline the different regulatory systems across ASEAN countries, and to make electronic transactions safer and more convenient.

In this context, we warmly welcome the ASEAN-Australia Digital Standards Cooperation Initiative, which Prime Minister Turnbull has just announced. It is a very good first step in developing interoperable digital standards, which will facilitate trade and reduce costs for businesses, particularly for SMEs.

Closing

So I would like to thank the Australian Government and particularly the Prime Minister for organising this event. I am confident that SMEs have a promising outlook in Australia, as in ASEAN. The combined efforts of businesses, industries, governments and partners will allow us to seize the growing opportunities in our region and make this a productive, prosperous, and a successful business environment for businesses and our peoples.

I wish you all a productive and successful conference.

Thank you very much.