Speech by Minister Chan Chun Sing at the Singapore Aerospace Technology Leadership Forum

Speech by Minister Chan Chun Sing at the Singapore Aerospace Technology Leadership Forum

1. A very good morning to all of you. First let me join the two previous speakers before me to thank you for your presence here this morning given that it’s a slightly difficult moment for air travel at this point as we deal with the Novel coronavirus. But in Singapore, we are determined to try our best to live life normally with added precautions because the greatest uncertainty with this virus is that nobody really knows how long this situation will persist. And because we don't know how long it will persist, it would not be possible for us to try to shut down everything and think that it will blow over. So in Singapore, our strategy is always to try to live life normally with other precautions in such moments.

2. And in Singapore, we are also determined to emerge stronger from every challenge. We have done this before with SARS, the global financial crisis, Asian financial crisis, H1N1 and so on. But for us, every crisis is also an opportunity to distinguish ourselves.

Our aerospace industry’s growth journey

3. Today, I'm just going to spend a bit of time talking about how we came to where we are and where do we intend to go for the Singapore aerospace industry. Let us take a step back to 1965, when Singapore first became independent. If you are a futurist, a thinker, you would probably have concluded that air connectivity for Singapore is existential. Why? Because if you look at the geography of Singapore, we are essentially a landlocked, sea locked and air locked country. We have only one land link to Peninsular Malaysia at that point in time. Our ships will get into international waters within 10 minutes of leaving our ports. Our aircraft would have reached our neighbour's airspace even before they reach cruising height. And we have quite some distance to get to before we even reach international airspace. So, air connectivity to Singapore can be considered existential.

4. However, having said that, there was absolutely no reason to believe then that Singapore can have an aerospace industry. There was no reason to believe that we will have a gathering like this today, where eminent people like yourselves, will come to Singapore to talk about the future of the aerospace industry. When we were independent, we only had a few commercial aircrafts and not much of an Air Force to even talk about. And after the British East of Suez withdrawal, we were even further down the ladder.

5. Then, Malaysia-Singapore Airlines split up. At that point in time, the technology was such that it did not make sense to talk about international flights. And in that separation, Malaysian Airlines took most of the domestic flights, because that made sense and Singapore Airlines, took the international flights, with not many places to go to. But of course, with a twist of fate, with the advancement of technology, the international routes turned out to be much more lucrative than the domestic routes. By the way, Singapore has no domestic routes. I had the privilege of being one of the few people that have taken a domestic flight in Singapore. I took the plane off from Changi Airport and jumped off at Paya Lebar Air Base and landed on my feet – this is one of the few domestic flights we ever did.

6. More important than that, there was no reason for us to talk about an aerospace industry, because we had no manufacturing base. Never mind advanced or not, we had no trained workforce in the 1965 for even the rudimentary manufacturing base. So how did we get here?

7. Singapore got here despite our lack of natural competitive advantages. We got here because we have had to manufacture our competitive advantages, create what we call man-made competitive advantages. And these man-made competitive advantages include the rule of law, political stability and a progressive business environment in order to attract long term investment, and the aviation industry is one such example.

8. Unlike shoe manufacturing and textile manufacturing, the aviation industry has always required long term investment because it is a capital intensive industry. And because of the political stability, progressive environment, progressive business environment, tripartite relationship, and a strong investment in education, we attempted and were able to get this off the ground.

Anchoring international MNCs and uplifting local enterprises

9. And we have many of you to thank for because the Rolls Royce, Airbus, Boeing, Safran of the world, you were the early pioneers who believed in us. You helped us to get this story off the ground. So thank you very much, not just for being here today, but for being with us for the last 50 years.

10. Now where are we today? We have moved quite far today. Singapore is a key node in the global MRO value chain. Today we are also one of the choice locations for leading OEMs in their global diversification. We have now a strong ecosystem of local SMEs and companies to support the aerospace industries, many of them in the precision engineering field. And it is a symbiotic relationship because as we attract more advanced aircraft, engine builders and developers, they in turn help to bring our industry to the next level

Striving for growth going forward

11. More importantly, today, the aerospace industries here do not exist in isolation. They have strong partnerships with our Institutes of Higher Hearning (IHLs) in training and developing the next generation of aerospace engines. They have strong partnerships with our research institutes to also do cutting edge work in this area. Now I come to the most important part of my sharing this morning - where do we want to go, why are you here today and why are you such an important part going forward.

12. In the past, we were in the value capture business within the aerospace industries. We try to bring the best into Singapore, we do the job and we try to get the share from the gains. Going forward, this is necessary but insufficient. Going forward, we aspire to be a key node in the global aerospace industry value chain by value adding, not just by value capture, but by value adding to the global value chain.

13. We are cognisant that for a small country, it is not possible for us to be at every part of the global value chain. But we want to be a key node at the critical parts of the global value chain for the aerospace industries, and we want to be able to value add. And to be able to value add, we must have the science and technology base, the foundation for us to be able to contribute by pioneering new methods of production, maintenance and lifecycle management. And this is where we have both tremendous opportunities and challenges to overcome.

14. Let me talk about the opportunities and then some of the challenges, which to us can also be turned into opportunities. The tremendous opportunity for Singapore in the next 50 years is essentially this. First, we are part of a growing Asia. The aviation industry will take off even more and to greater heights in Asia for the next 50 years because of the growth of the middle class. The demand for air travel will grow tremendously. The question is, how do we create opportunities to satisfy this demand at a sustainable level? That is the first opportunity.

15. The second opportunity for us is data. We talked about this briefly prior to coming into this room. Today, if we can collect, collate and analyse all the data generated by all the flights in the aviation industry, we will be able to learn much more and improve our systems much faster. But as we discussed briefly, the question is not the existence of the lack of data but how do we bring forth commercial systems that allow people to come together and share data for research, for production and even for maintenance activities. We see this as an exciting opportunity to develop ourselves into a hub where we can be the honest broker to bring different parties together to share the data and improve the performance of engines, aircraft, maintenance and even normal operations. So that is the second opportunity.

16. The challenge is sustainability. How do we promote the continued growth and development of this industry in a sustainable manner? And there are many aspects to this. Engine performance, fuel efficiencies are but some of them. But there are also other things that we need and can do to decrease the energy consumption and to reduce the carbon footprint. This includes the efficiency of the ground operations, the efficiencies of the logistics chain and so forth. So be it alternative fuels, be it the use of data for design, production, maintenance and lifecycle management, we see tremendous opportunities.

17. And if Singapore truly aspire to be the global node to value add, then your presence today, your ideas will be critical for us in the next 50 years. Singapore will not just be able to value capture as in the past 50 years, but more importantly, we will be able to value add to the global aviation industry in the next 50 years. That is our aspiration, but in order to do that, in order for us to continue to have a viable aerospace industry in Singapore, some of the fundamentals will not change and we will have to develop new man-made competitive advantages in an increasingly competitive world.

Singapore’s commitment to our partners

18. The fundamentals that will not change include a stable political environment that is conducive for long term investment, a skilled workforce with a stable tripartite relationship and a progressive regulatory environment that can keep pace with the challenges of the business world today and tomorrow. But Singapore, in the next step, will need new enablers to do what I have just shared about our opportunities and challenges. And these new enablers will include the new connectivities beyond the old physical connectivities of air, land and sea for logistic operations. We will need new connectivities in data, finance, regulations, technology, and talent. Singapore must continue to be an open port, a safe harbour for technology and talent. We will continue to welcome partnerships with people from all over the world, and institutions from all over the world for us to work together to improve the research and development, production and maintenance of the aerospace industry.

19. This is a promise that we will make to everyone that would like to partner with us. We will also need to work with like-minded partners, including like-minded countries, and like-minded companies, of which many are here today to promote the free flow and sharing of data in a secure and trusted way. Now this is easier said than done. In today's world, data protectionism is on the rise - not just amongst some of the larger countries, but also amongst some of the larger companies. How do we establish a framework to allow countries and companies to share data in a secure and trusted way with equitable distribution of the benefits to all will be both a challenge and an opportunity for us.

20. Next, we need to create an environment where intellectual property protection is paramount in this effort. And in this aspect, Singapore has a head start, but we must never rest on our laurels. Intellectual property protection will be of utmost importance to this industry, and many going forward. We have set in place the institutions and the rules and regulations to do this. And we must continuously upgrade and improve on those rules and regulations, and likewise evolve our institutions accordingly in order to capture the new opportunities. Now if we can do this well, we will distinguish ourselves from the rest in the next 50 years.

21. Now, last but not least, the most critical part of this entire system of enablers must be our people. And this is why I'm so happy to see that many of you here have partnered our IHLs to groom the next generation of aerospace professionals for the industry. For example, SIA Engineering Company and Temasek Polytechnic have come together to groom at least 400 Institute of Technical Education and Polytechnic graduates for the SkillsFuture Work-Study Post-Diploma and studies certificate programs in aerospace. Likewise, Workforce Singapore is also enhancing its efforts for the Professional Conversion Programme to get more middle aged workers into the Aerospace Industries. If we can continue this partnership well, then we will have the substrate for us to have a strong core of aerospace professionals from research and development to production, maintenance and life cycle management. So personally, I am optimistic for this industry.

22. This industry is of strategic significance to Singapore’s economy and to our very own survival. This is a capital intensive industry, but increasingly, it will be a knowledge intensive industry and most importantly, it will be a trust intensive industry. Trust in the standards, trust in the rigor of research and development, trust in the quality of maintenance and life cycle management.

23. We are determined to build on the success of our last 50 years and to continue to make sure that we continue to evolve new man-made competitive advantages for us to be in good stead in this industry. And to all the partners who are here with us today, we are determined to be your partner of choice in your global portfolio. We will not do this alone, and we cannot do this alone without your partnership and your trust. And we promise that we will keep to our promise to provide you with a long term stable environment to put your investment in, to put your research and development in, to protect the intellectual property, and to work collaboratively with all the partners here for us to bring this industry to the next level. So thank you very much for your presence and as I have stated, through all crises and contingencies, we are determined to emerge stronger.

24. Thank you very much.