Business need to be innovative if they want to survive in the new economy, say newly appointed NMP

Nominated Member of Parliament Douglas Foo feels that business in Singapore, SMEs especially, need to shift their business model into a more innovate and sustainable version.

When asked about what he thinks are the underlying issues of Singapore’s relatively stagnant productivity rate, Mr Foo who was sworn-in yesterday as NMP, said productivity is linked with innovation. So when innovation is stagnant, productivity will be too.

“Productivity is about making incremental output sing same resources. But in innovation, when you rejig your whole business model, when you look at the supply chain and utilise those resources that you don’t have in a collaborative manner, you will be way ahead,” said Mr Foo in an earlier interview with TOC.

Mr Foo noted that when cheap labour is readily available, companies are not driven to innovate simply because they can get things done cheap and fast. However, that model isn’t sustainable in the long term. Mr Foo added, “There’s always a tradeoff and there’s always a social cost. So that can only get you so far. But if you need to bring yourself to the next step, you need innovation.” When you only focus on offering the lowest prices, there’s always going to be some other company out there that will offer even lower prices. The one dimensional competition is not great overall for anyone.

Mr Foo feels that local companies need to start building their brands into something will be long lasting. Though intangible, brand awareness is something that will secure the sustainability of any company. Drawing on an example like Coca Cola which has become a global household name, Mr Foo feels that SMEs need to be able to harness the collaborative effort of the local network to build a company that will last in the long run.

Specifically on work levies and restrictions, Mr Foo pointed out that decisions on this should be made based on the future of individual industries. He says that if a company or industry can prove that they are able to evolve with the market and economy to stay relevant, then authorities are ready to listen and to help them make that transition into the future.

However, not every company will make it. “They need to find their foothold somehow in this new world. So that’s where the Trade Association Chambers have the ecosystem to go in and support them”.

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