27 August 2001

KEYNOTE ADDRESS BY MR PETER CHEN, SENIOR MINISTER OF STATE FOR EDUCATION AND TRADE AND INDUSTRY AT THE 10TH GLOBAL CONFERENCE ON THE HARVARD PROJECT FOR ASIAN AND INTERNATIONAL RELATIONS, ON MONDAY 27 AUGUST 2001 AT 9.20 AM AT THE SUNTEC CITY AUDITORIUM

1. The theme of this conference - "Asia and the Knowledge Economy: Opportunities for Progress" is an ambitious one. It covers many topics in various disciplines of study, and crosses geographical boundaries. Appropriately, the organisers of the conference come from universities on opposite ends of the globe - Harvard University and the National University of Singapore. Among you are some 450 participants from nearly 40 different countries. This is an achievement indeed, and I would like to congratulate the organisers for putting together this conference.

2. Today, technology is so pervasive in our daily lives we hardly realise how quickly it had entrenched its place in human society. If we think about it, the pace of change is staggering: radio took 40 years to reach 50 million users, television - about 20 years, and the Internet? 5 years or less. The rapid advances have created a global marketplace, throwing open the doors for competition on a global level. Our globe has shrunk. Everywhere, local bookstores find themselves suddenly competing with the big boys like Amazon.com and Borders.com, and worry about survival in this new economic landscape. As nations, it is even more vital that we in Asia are not left behind in the new global race for economic progress and competitiveness.

3. Whilst IT and the Internet provides high-speed connectivity, and gives the convenience of transactions over cyberspace, there is still a place for the irreplaceable energy of face-to-face interaction. Silicon Valley succeeds partly because it is a physical gathering of those with ideas to sell, and those with the interest and funds to buy these ideas.

4. What do countries in Asia need to succeed? It does not matter so much which specific technology we choose to focus on. More importantly, it is how we shape our environments and systems that will allow us to develop new technologies and create new markets.

5. What are the critical success factors of a KBE? I would like to highlight 3 important factors, and share with you some of Singapore's experiences:

6. Knowledge creation does not come about just by chance. Countries that manage a careful R&D profile, and develop their people's capacity to create knowledge will build up a strong edge over others which fail to do so. Returns from advancements in knowledge not only accrue to those that make the investment. They can also spill over to the rest of the economy - for example, through better quality products and services at lower prices - thereby benefiting society as a whole.

8. First, create a conducive environment for the generation and use of knowledge. There should be mechanisms for the proper management, protection and use of the knowledge created. This will allow us to reap its full economic benefits. For example, to protect new knowledge from unlawful exploitation and use, we set up an Intellectual Property Rights Office. To make the environment in Singapore more pro-enterprise, we removed the barriers and regulatory hurdles and put in place a more conducive tax regime to smoothen the path for technopreneurs.

9. Second, make available world-class R&D facilities. These are key to attracting investment and highly-skilled research personnel. Singapore, together with the other countries in Asia such as Hong Kong SAR, Taiwan, South Korea and Malaysia, has made good strides in our efforts at building up these capabilities.

10. We have a vibrant R&D environment in Singapore. Over the last decade, the National Science and Technology Board (NSTB) has funded 13 Research Institutes (RIs) to build technological capabilities in key clusters such as Electronics, IT and Life Sciences. The RIs and our universities support a large share of the R&D activities in Singapore.

11. In 1999, the National Gross Expenditure on R&D (GERD) was $2.66 billion, or 1.84% of GDP. Developed nations typically have a GERD/GDP ratio of 2 to 3%. The size of the Research Scientists and Engineers (RSE) population in Singapore today stands at nearly 14,000, three times what it was in 1990.

12. Today, there are 70 RSEs for every 10,000 workers in Singapore. Here, we are closing the gap with many developed countries such as the US, UK and Germany which are typically 60 to 80 RSEs per 10,000 workforce. These figures show the culture of R&D in Singapore to be in good health.

13. Third, nurture entrepreneurship and a tolerance for honest failure. In technopreneurship, whilst we hope there will be many wild successes, we also know there will be many who try and fail. We need to put up a safety net if we are to sustain the spirit of innovativeness. To support this, NSTB launched their Phoenix Award which recognises technopreneurs who braved failure to start afresh, taking new risks in order to create new hi-tech business ventures.

14. Our efforts are gradually paying off. In 1999, more than 500 technopreneurial companies were formed in Singapore. This is close to 6 times more than that in 1996, when only 88 technopreneurial companies were formed. We ranked 9th in the World Competitiveness Report for Science and Technology, and 8th for location attractiveness for R&D, ahead of Ireland, Hong Kong, Taiwan and South Korea. We are on our way to becoming a compelling global hub for innovation and business investment.

15. A second critical success factor in a KBE is human talent. In a world where intangible assets count, the collective talent of our people make up our intellectual capital.

16. We recognise that mere knowledge is not enough. It is the ability to create and use new knowledge that is more crucial. Thus, the Ministry of Education has drawn up a framework to achieve the vision of "Thinking Schools and Learning Nation". We have aligned many policies to achieve this, starting with the immersion in thinking skills, project work in schools, and also a reduction of curriculum to allow more time for creative and critical thinking activities.

17. In building up our pool of talent to drive the Knowledge Economy, we believe the tilt towards science and technology has given us the spring-board to surge forward. That is why we invest very much in the grooming of local Science and Technology manpower, starting with the teaching of Mathematics and Science at primary school.

18. Mathematics and science allow students to cultivate the ability to think systematically, being ways of expressing ideas concisely through logical argument. The solid mathematics and science foundation gives our students a good basis for furthering their education in Science and Technology disciplines. A good two-thirds of our diploma holders and over half of our university graduates each year are trained in Science and Technology disciplines. They form the critical technological manpower to fuel our economic growth.

19. Our universities already do very well in producing graduates who meet industry standards, and are received well by both the private and public sectors. To go further in the business value chain, our universities will play a key role in intellectual capital formation and focus also on developing more graduates with research capabilities. In line with the need for the workforce to continuously upgrade its skills for the new economy, universities will also play a big part in providing continuous education and training. In short, our universities should play a larger role as a strategic resource for Singapore.

20. Whilst we will make all efforts to educate local talent, we also welcome foreign talent to our shores. Many countries have recognised the importance of augmenting their talent pool with foreign talent. They could be the 'techies' with the technological know-how, or the professional managers with the business savvy to make R&D work. Whether for work, for pursuing an education, or for settling down and becoming part of the Singaporean family, through them, we keep updated on technology developments, and extend our fraternity of friends, talent and investors. Prime Minister Goh has already outlined this as one of the thrusts in Singapore's new growth strategy. With a limited pool of human resource, we need to stretch our local potential and "top it up from the outside".

21. Let me now come to my third point. Even if we had in place the necessary infrastructure for an enterprise ecosystem and good intellectual capital, we need our people to be globally literate, that, they should possess the critical proficiencies of IT savvy and a fluent command of a language that will permit them to carry on a discourse across international boundaries. English serves such a function today.

22. Young people today need hardly any help in accessing the Internet and using IT to enhance their work and play. But they should be trained to use it optimally to enhance learning, or fail to tap on its true power. To ensure that every student has the ability to access and draw on critical information in a timely and creative manner, the Ministry of Education has implemented the Masterplan for IT in Education, which will help students process and, more importantly, create new knowledge. Outside of school, our Singapore ONE broadband network brings IT and the Internet to every home, business, school and government office.

23. Even then, making IT available is not the end of the battle. Knowing how to get connected is not enough. One needs to speak a language that can be understood by others. The predominant language of the Internet today is English.

24. Today, 9 out of 10 computers connected to the Internet are located in English speaking countries, and more than 80% of websites on the Internet are hosted in English. More than four-fifths of all international organisations use English as either their main or one of their main operating languages. Even if one argued that the use of the rest of the world's languages on the iternet would eventually catch up, or that automatic language translation will become available in the future, widespread English language proficiency in an economy is a distinct competitive advantage today, and for some years to come.

25. When Singapore achieved independence in 1965, the Singapore Government then consciously chose English as the working language in the courts, in businesses and as the medium for education in schools and universities. This was due to two factors: firstly, the choice of English in a multi-racial and multi-lingual country would serve as a neutral, common language and expand communication between our different communities. Secondly, with English as the language of work and study, we would open ourselves to the world, and lower the barriers for entry. Direct communication is possible, and in Singapore's case, being a small country, the importance of this ability to establish direct links with the rest of the world cannot be overstated.

26. You will have the opportunity grapple with many of the above issues in the next four days. From the conference programme, I can see that you will be exploring important questions. I hope you will find some equally important answers to these challenges.

27. The future may be unknown, but one thing is clear: our fortunes and destinies as countries in Asia are deeply interdependent. And, as Peter Drucker, the management guru, once said, the only way to know the future is to create it. By being a part of this conference, you have taken the first step towards creating the future. By knowing the issues and challenges that face us today, you will be in a good position to make a better tomorrow.