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Speech by Dr Lee Boon Yang at the Committee of Supply Debate on Developing World-Class Enterprises and Capabilities for a Creative Economy

SPEECH BY DR LEE BOON YANG,

MINISTER FOR INFORMATION, COMMUNICATIONS AND THE ARTS,
AT COS DEBATE (MICA), 06 FEBRUARY 2009
AT PARLIAMENT

Developing World-Class Enterprises and Capabilities for a

Creative Economy

1. Madam Chairperson, I thank the GPC Chairperson, Ms Penny Low and Members who spoke on the

opportunities and challenges facing the Creative Industries, which group together the arts, design, media and
infocomm sectors. Since the launch of the Creative Industries Development Strategy in 2003, this cluster has grown

by about 6% annually in value-added and contributed to the vibrancy of our economy and society. However, like other
economic sectors, the Creative Industries have also been hit by the economic recession. Preliminary estimates

indicate that for 2008, the Creative Industries only managed a 1% to 2% growth in value-added, compared with 9%
in 2007. The infocomm sector grew by 6% to 7% in 2008, compared with 11% in 2007.

2. 2009 will be a very challenging year for the Creative Industries.

3. MICA will harness our resources to help creative enterprises ride the storm and prepare for the recovery. We
will upgrade capabilities to prepare for economic recovery and new opportunities. We will also continue to invest in
physical infrastructure for the creative industries and spend on vital R&D to be at the forefront of innovation.

4. Let me start with the media sector.

Media

5. Ms Penny Low asked about our plans to develop Singapore into a media hub. This is indeed the objective of
MDA’s Singapore Media Fusion or SMF masterplan. SMF is an initiative to build a vibrant media ecosystem for our

media companies to create and produce attractive content such as films, TV serials and documentaries for

Singapore and the international market. Government will commit $230 million over the next five years for the SMF
initiative. This is a 40% increase in funding support over the previous Media 21 masterplan, and on top of existing

government support of $500 million over five years for Interactive Digital Media (IDM) R&D.

6. SMF will boost our local media industry through close industry collaborations and strategic talent
development. It will stimulate demand for local content, applications and services, and help create jobs in this sector.

Under SMF, MDA will increase funding for collaborative media projects with the private sector. One such initiative is

the Singapore Film Commission (SFC) New Feature Film Fund, which co-invests up to $250,000 per film. This gives
emerging Singaporean talents the opportunity to direct their feature film in collaboration with production
companies. Last year, nine Singapore directors benefited from SFC’s funding support of over $2 million. It also

resulted in the first Singapore-Japan co-production ‘Thunder Boys’. We look forward to more such productions in the

year ahead.

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7. I would like to assure Mr. Teo Ser Luck that MDA gives full support to local film makers, including those

producing films with local audience appeal. The SFC’s New Feature Film Fund benefits works that are targeted at
both local and international audiences.

8. This year, MDA will fund 4,000 local television hours, up from 3,800 last year. Recent beneficiaries include the

well-received “Little Nyonya” and Tamil serial “Guru Paavai”. MDA also helps showcase Singapore media products at
our Asia Media Festival held in Singapore and international events like Cannes Film Mart. Over 110 local media

companies participated in such international events last year and secured an estimated US$84 million in deals. MDA
will continue working with distributors and promoting made-by-Singapore content worldwide. This has yielded

dividends with Singapore content sold to international players such as BBC (UK), ABC (Australia), Phoenix TV
(China), TVB (Hong Kong), NHK (Japan), Discovery and National Geographic (US).

9. SMF will also support media financing initiatives. To date, we have anchored more than $1 billion of media

funds in Singapore to finance international and Singapore media projects. MDA will continue to help media
companies seek financing for their projects.

10. SMF also aims to build up a strong media talent base, a concern highlighted by Ms Penny Low and Dr
Fatimah Lateef. MDA, in collaboration with the public and private sectors, will build a pipeline of skilled media
manpower. For example, MDA, WDA and the industry are working on media-related programmes to retrain and
upgrade up to 5,000 workers, under initiatives such as the Skills Programme for Upgrading and Resilience (SPUR).

11. MDA will introduce an attachment programme to match 500 local media professionals with companies and
projects. We will also offer aspiring young talents opportunities to study full-time under the Media Education
Scheme.

12. To stimulate growth in digital media content and applications, Government will continue to invest in R&D in
the Interactive Digital Media sector. In the last two years, we have secured IDM industry investments of more than

$200 million, creating about 800 new jobs. One example is KooBits, set up by NUS engineering graduate Mr.
Stanley Han, as a platform for children to create and publish e-books. KooBits has been launched in more than 80

Singapore schools and several hundred training centres in Indonesia. Another example is Garena, an online gaming
service provider. Launched barely two years ago, Garena now boasts over 10 million registered users

worldwide. Going forward, we will allocate another $70 million to support some 150 new IDM projects and
start-ups. To promote commercialisation of IDM R&D output, MDA will also actively match-make local companies

with global investors.

13. In summary, SMF’s software development strategy will complement the investment in infrastructure such as
the Mediapolis@one-north project. This multi-agency project by MDA, JTC, IDA and EDB, will provide the key

infrastructure, including critical production facilities such as Singapore’s first world-class soundstage. MDA will
launch the SMF masterplan by June, and announce more details then.

Infocomm

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14. Ms Penny Low asked for an update on the iN2015. I am pleased to inform this House that IDA is making good

progress with iN2015. iN2015 masterplan is aimed at transforming the economy by the wider adoption of infocomm,
nurturing globally competitive infocomm enterprises, developing a capable and competent infocomm workforce and

building a Next Generation National Broadband Network, or Next Gen NBN.

15. To promote wider adoption of infocomm,, IDA has allocated $70 million for schemes such as Calls-

for-Collaboration to co-develop infocomm business solutions. This includes $10 million for the Infocomm@SME
programme to support infocomm adoption by local SMEs. In addition, IDA continues to promote infocomm

innovation amongst SMEs with $5 million set aside from SPRING’s Technology Innovation Programme. These
programmes will enable IDA to help more SMEs adopt infocomm to enhance their business model and

competitiveness. For example, IDA was able to help, Gramercy Music implement an Enterprise Resource Planning
system for its music retail business which will save the company cost and raise efficiency. IDA will also partner

SPRING to provide a single point-of-contact for relevant SME infocomm funding schemes to increase convenience

for SMEs. It will work with SiTF and the chambers of commerce.

16. Over the years, local infocomm companies have developed capabilities and solutions especially for
e-government application. To help these companies, IDA has established IDA International to promote their services
overseas. Companies such as ST Electronics, EcQuaria and SQLview are already working with IDA International in
the Middle East, Africa and Central and South America.

17. Despite the adverse economic conditions, the infocomm sector will continue to provide employment
opportunities for graduates. To boost the talent pool, IDA is investing about $30 million over the next five years in
scholarships. A new Integrated Infocomm Scholarship will provide a direct route from polytechnic to university for
outstanding “O” level students interested in infocomm studies. IDA will also extend the National Infocomm
Scholarship for undergraduates for another three years. Already, they have awarded 150 scholarships under this

scheme.

18. To incentivise infocomm professionals to upgrade their capabilities, IDA will invest about $25 million to

enhance its Critical Infocomm Technology Resource Programme. Sponsorship for infocomm courses and certification

fees will be raised from 50% to 80%. Companies sponsoring their employees for these courses will also be eligible for
Absentee Payroll at $50 per day. This programme is expected to benefit 10,000 infocomm professionals over the

next two years.

19. Both Ms Penny Low and Mr Zaqy had spoken on the cost of communications. I am pleased to inform

Members that the cost of communications via mobile, broadband and fixed line can be expected to remain
competitive. The mobile sector is fiercely competitive with 3 operators offering a variety of services. The launch of Full

Mobile Number Portability in June 2008 has intensified competition as mobile operators have offered more value-
for-money packages and handset subsidies. While the fixed line sector is dominated by the incumbent operator, we

are also seeing competitive forces at work which will continue to bring prices down. Over the past three years,
broadband rates have fallen by more than 70%; operators have also upgraded their broadband speeds to respond to

consumer needs for higher bandwidth.[1] The convergence of the telecoms, broadband and media sectors have also

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resulted in more competitive prices in the form of triple-play packages.

20. The Next Generation National Broadband Network, or Next Gen NBN, will contribute to further cost reduction

and greater vibrancy in the infocomm and communications sector. Mr Zaqy Mohamad had asked for an update on
this project. We are pushing ahead with this critical infocomm infrastructure. The project is on schedule. IDA has

awarded the NetCo Request-For-Proposal last September to OpenNet consortium to build the passive fibre-
to-the-home network. The evaluation of the OpCo RFP for a company to operate the active electronics for the network

is ongoing and is expected to be awarded by March 2009. Work on the network should commence later this year.

21. The Next Gen NBN will provide consumers and businesses with highly competitive broadband services based

on an effective open access model. IDA will regulate the NetCo and OpCo’s wholesale prices. OpenNet had
proposed monthly wholesale prices of $15 per residential connection and $50 per non-residential connection. The

eventual retail prices will naturally be higher than wholesale prices. Nevertheless, with such wholesale prices, all
Singaporeans can look forward to more affordable and attractive communications and media services compared with

current prices.

22. To further optimise the use of the Next Gen NBN, IDA will implement a neutral Singapore Internet Exchange
to improve domestic internet traffic routing and access to content. IDA will also foster the growth of innovative
NGNBN services through the development of Next Gen Innovation Centres. One example is Cisco’s Enabling
Platform Innovation Centre, launched last December. IDA will also introduce the Next Gen Services Innovation

Programme to help companies develop prototype and scalable services over the Next Gen NBN.

23. Ms Penny Low sought an update on the Wireless@SG programme. I am pleased to inform this House that
Wireless@SG has been completed ahead of schedule. Today, we have more than 7400 hotspots serving most
public areas throughout Singapore compared to the 900 in 2006. More than 1.2 million people have signed up with
the three operators for the basic tier of free wireless broadband service. Usage has also gone up from the average of

2.1 hours per month in Dec 2006 to 4.2 hours per month currently. IDA will consider how to further refine and
enhance this programme.

24. Ms Penny Low asked how we are encouraging ICT adoption by our citizens. In general Singaporeans are

already tech-savvy Today, we have a mobile penetration rate of 131% and a household broadband penetration rate of
close to 100%. IDA will continue to reach out to citizens to promote the use of infocomm technology, and through

people-sector organisations such as NTUC to strengthen online engagement with its 500,000 members.

25. We will nurture a digitally-inclusive society and reach out to the marginalised sector which is one of Ms Penny

Low’s concern. IDA’s NEU PC Plus programme offers students from low-income households and disabled people
highly-subsidised computers with broadband. This programme has benefited about 7,000 households with

school-going children since it started two years ago, and is expected to benefit an additional 38,000 needy
households by 2015. IDA will also continue its Silver Infocomm Initiative to equip our senior citizens with necessary

infocomm skills.

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Design

26. Mr Ong Seh Hong asked about our support for the design enterprises. Last November, I launched the $12

million ‘Design for Enterprises’ programme that helps SMEs in various economic sectors enhance their
competitiveness through design innovation. I am pleased to note that about 200 companies have already expressed

interest in this joint programme by DesignSingapore, IE Singapore and SPRING.

27. DesignSingapore has further earmarked $10 million over the next two years to strengthen the Design

Capability Development Programme. This includes funding support for cross-disciplinary mentorships, scholarships,
internships and overseas promotion.

28. DesignSingapore has promoted and profiled almost 1,500 Singapore designers since 2004. Mr Ashley Isham

is one of the designers that Mr Ong Seh Hong mentioned. I remember meeting him in London. It will continue
showcasing Singapore designers and enterprises at prestigious international events such as the London Design

Festival and Venice Architecture Biennale. Such promotions have yielded dividends for our designers. Just last
month, home-grown designer furniture company Air Division secured on-the-spot business deals with two topline

Italian furniture companies at the leading international furniture fair in IMM Cologne. So despite the gloomy scenario,
there is still demand for well-designed products and I am glad that our Singapore designers are able to meet such
demands.

Creative Industries Freelancers’ Network

29. Dr Fatimah Lateef asked how we could harness the talent of freelancers in the Creative Industries. Freelancers
do play an important role and I am pleased to inform her that MICA has started working with the private sector on a
Creative Industries Freelancers' Network. This initiative will provide a centralised resource and contact database and
a wide range of services such as training and networking to help match freelancers with companies, and potential
uses of their design expertise. It will be launched later this year.

Conclusion

30. In conclusion, MICA is focused on assisting our creative enterprises tide over the current economic

difficulties. We will also invest in manpower development and infrastructure for the longer term. We will ensure that

Singapore’s Creative Industries and the wider economy will have both the software and hardware to grow and
prosper once the economic storm blows over. We can look to the future with confidence in Singapore’s ability to
transform into a globally competitive creative economy.

1 We have since seen the most popular broadband speed plans increase from the 512kbps-2Mbps range to the 2Mbps-10Mbps range

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