Singapore Business Review June-July Issue

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THE 2014 SALARY SURVEY see which jobs are most in-demand

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the devil wears prada no more

singapore goes micro as office demand soars

the huntfor singapore’s billion-dollar startup begins

should crowdfunding be regulated?

hungry go nowhere

MICA(P) 244/07/2011 KDM No: PPS1645/3/2008

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FROM THE EDITOR Publisher & EDITOR-IN-CHIEF Tim Charlton ASSOCIATE PUBLISHER Laarni Salazar-Navida Art Director Jonn Martin Herman MEDIA EDITOR Roxanne Primo Uy Editorial Assistant Queenie Chan Editorial Assistant Alex Wong ADVERTISING CONTACTS Laarni Salazar-Navida lanie@charltonmediamail.com Gladys Roño adexecutive@charltonmediamail.com

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In the luxury retail sector, we discovered an emerging trend that’s looking to challenge the traditional luxury brands: The ultra rich Singaporeans are replacing their Prada and Chanel with more bespoke brands as they seek uniqueness and exclusivity. And with the high cost of physical retailing in Singapore, the challenge for retailers who target this ‘bespoke segment’ might be scale and cost to serve.

Meanwhile, if your favourite restaurant closed down or relocated, chances are it was hit hard by burgeoning staff costs and rents increasing 15%. We talked to some restaurant owners and they confirmed that they are left with no other choice but to cease operations or relocate to a cheaper site.

+65 62237660

**If you’re reading the small print you may be missing the big picture

In this issue, we bring you the yearly Salary Survey report where you can find the latest trends and challenges in Singapore’s hiring and employment market.

We already know that local Singaporeans have an advantage over expats but our channel checks reveal that niche roles in oil and gas as well as healthcare and life sciences are expected to attract candidates from overseas, as these areas face a shortage of experienced local talent. We also added a special section in this year’s Salary Survey where you can check out which country offers a higher pay for expats – is it Singapore or Hong Kong?

24,700 Circulation

In this issue you will also find the inaugural ranking of the 10 largest MBA providers and 30 largest MBA programmes in Singapore based on total enrolment.

Enjoy!

Tim Charlton Singapore Business Review is available at the airport lounges or onboard the following airlines:

Singapore Business Review is available at the following clubs and hotels: American Club Hollandse Club Laguna National Orchid Country Club Raffles Country Club Raffles Town Club RSYC Seletar Club Sentosa Golf Club Singapore Cricket Club Singapore Island Country Club Swiss Club The Tanglin Club The China Club The Legends Fort Canning Park The Pines Club Tower Club Singapore Fullerton Hotel Grand Plaza Park

Royal Hotel Inter-Continental Le Meridien Orchard New Park Hotel Pan Pacific Raffles Hotel The Hilton The Regent Singapore The Ritz Carlton The Swiss Hotel Stamford Traders Hotel Singapore Darby Park And to 16 serviced residences

SINGAPORE BUSINESS REVIEW | JULY 2014 3

CONTENTS

A toast to the biggest 16 FIRST wine vault in SG

STORY 30 CoVER Business booms and creativity spreads as international

18 ANALYSIS Crowdfunding big dreams

art hubs prosper in Asia

FIRST

FIRST

ANALYSIS

14 Wanted: bankers 14 Expats feel the pinch as SG ranked

22 Singapore’s 10 most successful

24 Genting Singapore eyes expanding

priciest city

15 Uber’s X-factor speeds off

hotel managers aged 40 and under

15 The Chartist: Singapore Banks 16 SBR’s first ever Budget briefing

packed to the rafters

18 JPMAM’s new CEO says clients

to Korea, Japan, United States

OPINION social media PR

18 StarHub glistens in green 20 Why Singapore is hooked on drip

42 How Big is China, really?

pricing

Published Bi-monthly on the Second week of the Month by Charlton Media Group #06-09 E, Maxwell House 4 20 SINGAPORE BUSINESS REVIEW | JULY 2014 Maxwell Road

Will a slowdown in portfolio investment prompt emerging Asia to reform and attract FDI?

REGULAR 34 Rankings 36 Legal Briefing

ANALYSIS

should “re-risk” their portfolios

26 Financial Insight

50 4 ways SMRT can improve its

44 A tale of two flows

Crunching the numbers to calculate the relative impact of China’s growth on the world economy.

38 CMO Briefing 40 CHRO Briefing 48 Feature: Bitcoin in Asia

For the latest business news from Singapore visit the website

www.sbr.com.sg

We may be an oil company, but our real job is to refine your ideas.

Most oil companies see oil as a source of energy, a consumable that vanishes the instant it’s used.

We see oil as a tool for creating sustainable value. www.nynas.com

News from sbr.com.sg Daily news from Singapore most read

RESIDENTIAL PROPERTIES

Developers forced to cut prices to lure price-sensitive homebuyers Developers are resorting to discounts to woo price-sensitive buyers as revealed in April’s home sales data.

According to Barclays, in April, CapitaLand relaunched its 509-unit Sky Habitat at prices 11%-16% lower than its initial launch in April 2012.

They sold 130 units in April, which brings total sales to 312 units out of 509 units, or 61%.

RESIDENTIAL PROPERTY

HR & EDUCATION

We’re moving: Shrinking allowances drive expats to outskirts Fewer funds mean farther houses.

Tight rental budgets due to shrinking housing stipends are shooing expatriates to the city’s outskirts. For penny-pinching immigrants, houses outside the city’s core region will have to do.

According to URA and Savills, “These housing options likely fit better to their current budgets, yet still remain conveniently accessible from the city area.”

4 in 5 Singaporeans want to go job-hopping next year Singapore employees have found a new hobby that’s 100% workrelated, and it’s called job-hopping.

According to a workforce market sentiment survey by Berkley, recent reports from the Ministry of Trade reveal that the Singapore economy grew 5.4% in Q1 2014 which has, in turn, led to increased investment in the region and heightened confidence amongst jobseekers and employers alike.

What FATCA means to Singapore’s financial institutions

BY DERREN JOSEPH FATCA is a term that must be familiar to anyone who deals with US institutions. By way of background, a 2008 report on Tax Havens estimated that the US loses about $100 billion in tax revenue each year as a result of offshore abuses.

Fingers tend to be pointed at concealed and undeclared accounts held by U.S. taxpayers or their controlled foreign entities in particular.

What is stopping the next generation of Singaporeans from becoming entrepreneurs?

BY CHRIS REED A new survey comparing youthful entrepreneurs across the world reveals many things to think about. It says that young Singaporeans believe that being an entrepreneur has less status than working in a bank, for example, and that they are much less likely to become entrepreneurs than all the other countries.

Only 11.6% compared with Brazil and the US’s 25%.

MOST READ COMMENTARY Are your employees leaving because of you?

BY ADRIAN TAN A recent survey, Salary & Employment Insights 2014, discovered that 40% of workers have changed jobs in the last two years, and more than 70% are currently seeking new ones. The survey also revealed that lousy managers and a desire to earn more were key reasons for jumping ship. There are also anecdotal accounts of managerial actions that drive employees to throw in the towel which are not surprising to hear from job candidates.

6 SINGAPORE BUSINESS REVIEW | JULY 2014

Agenda PEOPLE | PLACES | SERVICES | OPPORTUNITIES

SERVICES

SERRANO The Singapore-based Serrano group of companies has offices in Vietnam and Thailand. The group includes five separate companies involved in ID and various aspects of the production, distribution, installation and sale of furniture, furnishings and interior fit out of residential/commercial projects. We are the sole distributors of Stosa Cucine Italian Kitchens and Pierre Cardin furniture in SE Asia, available for retail and residential/commercial projects.

49 Sungei Kadut Loop SG | Tel: +65 6305-0850 http://www.serrano.com.sg

PLACES

PEACH Pattaya Exhibition and Convention Hall (PEACH) is a world-class multipurpose meeting facility of the Royal Cliff Hotels Group which provides complete versatility as a convenient ‘one-stop convention solution’ for all meeting needs. It can accommodate up to 10,062 delegates theatre-style or 4,340 for banquets. With over 10 years of specialized events experience, top of the line services and a dedicated international team, PEACH enjoys a global reputation of excellence making it a premier meeting and event destination in Southeast Asia.

SERVICES

Cohn & Wolfe places

ambassador IN PARADISE Ambassador In Paradise Resort is a Triple A (AAA) Certified Resort with 60 well-appointed, spacious Guest Rooms and a luxurious Presidential Suite. Every room has personalized butlers, private balcony, elegant furnishing, impeccable interior and ensuite bathrooms.

“5 stars, Boracay is the best and Ambassador in Paradise is heaven! All our rooms were ready and we had the Ocean View rooms which are HUGE! I observed that the staff there take care of their beach more than the others…

Everything was clean and fresh and relaxing.” -Clari, London, UK For inquiries, contact us at:

Manila Office (+63-2) 511-0511 l (+63-2) 551-0754 Boracay Office (+63-36) 288.1541 l (+63-36) 288.1542 Email: reservations@ambassadorinparadise.com

visit

charltonmedia.com

FOR MORE INFORMATION on EVENTS AND ADVERTISING

At Cohn & Wolfe, we relish the hunt for ideas, for solutions and for brand opportunities. We use our in-house research capabilities to understand each brand’s positioning (or create new ones), and identify unique marketing and media opportunities. We shape digital strategies that clients need, and use social media to deliver what consumers want. Visit our website at www.cohnwolfe.com to see what we can do for your brand (Cohn & Wolfe was awarded 2013 PR Agency of the Year by PR Week).

SERVICES

telstra With over 30 years of experience, Telstra Global today operates one of the largest and most diverse networks in Asia Pacific. It recognises the region as a true driver of the global economy. Recently, Telstra Global commissioned a pan-Asia executive study, Connecting Countries, looking at how companies and executives are maximising opportunities in the Asian century. Over 4,000 professionals based in Asia were asked to discuss the challenges they face in manage business across countries in Asia and their strategies for success. The full report can be downloaded from http://telstraglobal. com/connectingcountries

U

A Solid Reputation of 19 Years

nheard of in the 1990s, Rockwell Land transformed the 15.5-hectare site of an old thermal power plant in Makati City into a self-contained and mixed use community. Its flagship project, the Rockwell Center, integrates residential towers, an upscale shopping mall, office spaces, an exclusive city club, and a prestigious graduate business and law school, and is the setting of the unique Rockwell lifestyle.

Creating exceptional spaces for living, business, and leisure, Rockwell Land has become one of the Philippines’ most trusted developers of exclusive communities for the country’s highend and upper-mid markets. Led by the Lopezes, a prominent and entrepreneurial family in the Philippines, Rockwell Land has consistently delivered uncompromised quality to its clients, marked by the Rockwell signature of lifestyle, safety, and sophistication.

The Proscenium The Greatest Rockwell Yet After making its mark in Makati, Rockwell works with Uruguayan architect Carlos Ott on the Greatest Rockwell yet – the Proscenium.

Adding 3.6 hectares to the Rockwell Center, the Proscenium is a mixed-use development which will carry on the legacy of the West Block.

Featuring unit cuts as large as 300 square meters, and as few as three units to a floor, the Proscenium provides exclusivity and privacy for its residents. Over almost a hectare of amenities boasts of swimming pools, a gym, a jogging path, a day care, a game room, and more.

Always making safety and security its top priority, Rockwell has equipped the Proscenium with a CCTV system, rigorously trained and highly competent security personnel, 100% standby energy power and a reliable fire detection system around the property.

Making art and culture more accessible to its residents, the Proscenium’ will feature a

550-seater performance hall and The Lopez Museum, housing the Lopez family’s extensive collection of local works of art. Completing the community will be retail row with a remarkable lineup of unique luxury brands and fine dining restaurants.

Charming restaurants and a coffee shop are now servicing the community and its visitors, while a community center lined with service establishments will soon provide every convenience residents need, only a few steps from their spacious homes.

32 Sanson by Rockwell Bringing the Rockwell Lifestyle to Cebu Located in the city of Cebu, the second largest city in the Philippines, 32 Sanson by Rockwell offers the best of peaceful living and a convenient lifestyle.

Residents can enjoy a wide range of activities at The Grove’s amenity deck, composed of a swimming pool, tennis courts and indoor and outdoor basketball courts. The community can experience easy access to fitness and wellness, with a gym fully fitted with modern equipment, while events and celebrations can be held at The Grove’s spacious function room.

Residences in 32 Sanson offer a setting for a laid-back lifestyle. Families and individuals may choose from among spacious one-bedroom, two-bedroom, and three-bedroom residences in 32 Sanson’s first two towers, while an exclusive selection of Garden Units at the ground level allows residents to enjoy nature right at their very own backyard.

Roads that divert traffic below ground give residents additional privacy as they can freely walk around the development and enjoy the landscape.

32 Sanson’s complete lineup of amenities include pocket gardens, two swimming pools, and two clubhouses, providing residents with space to enjoy time alone or with their loved ones.

While 32 Sanson by Rockwell’s strategic location in Lahug brings the community a convenient and comfortable distance from major business districts, retail establishments, and premier schools, it still allows its residents to live in relaxation in the city.

The Grove by Rockwell Harmony of Man and Nature in Ortigas The Grove by Rockwell features six residential towers and a beautiful and well-managed environment, ideal for families and young professionals in Ortigas.

Rockwell Primaries A family’s complete daily lifestyle In 2012, Rockwell began to cater to the market of starting and young families with its newest subsidiary, Rockwell Primaries. Located in New Manila, Quezon City, its first project 53 Benitez is ideal for those seeking their first homes without sacrificing quality.

Complete amenities alongside the two mid-rise residential towers provide a space for every member of the family to get active or wind down each day with a swimming pool, fitness gym, and pocket gardens. Inside the complex, a friendly convenience store, water station and laundry services also keep families’ basic needs in check.

53 Benitez’s well thought-of design makes it different from other condominium developments. Its vertical and horizontal cross ventilation lets residents experience the natural air in common areas, and saves on excess electrical consumption, while private bridgeways keep corridors conveniently separated from the residential units for an extraordinary sense of space and privacy.

Rockwell Center, Makati City

For inquiries, visit www.e-rockwell.com

you have the ideas, we have the space UE Serviced Offices & Convention Centre is an established brand name across Asia. Our serviced offices are strategically located in Grade A buildings of high corporate image, operated by a team of experienced staff and providing a full spectrum of business services.

The UE Convention Centre, with a total floor area of 8,000 sft, complements our business portfolio by offering spaces for management meetings, incentives, conventions and exhibition-type events.

HONG KONG

JAKARTA

SHAW HOUSE

UE SQUARE

ROCHESTER

ROOFTOP TERRACE

STATE OF THE ART MEETING ROOMS UE CONVENTION CENTRE

UE BIZHUB EAST

Our offices come fully furnished and ready to start-up your business immediately providing a hassle free experience.

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24/7 access to your office that makes you as flexible as you want Friendly secretarial support to help you with the day-to-day tasks Personalised telephone answering service enhancing your professional look Complimentary use of meeting rooms to foster a collaborative spirit of your team

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Free flow of beverages and use of pantry area to make you feel at home Regular cleaning services that save your time to do what you really care for Broadband internet 24/7 manned security and CCTV surveillance to make sure your assets are safe

co-published Corporate profile

Starting up is easy with UE Serviced Offices & Convention Centre

UESO provides fully furnished offices that help tenants start-up their business with a hassle-free experience.

W

ith Singapore becoming a top financial and business hub in Asia, many global businesses are setting up offices in the city to establish local presence. It is not surprising that demand for serviced offices and executive suites has grown strong in this region.

With extensive local knowledge and worry-free services, the UE Serviced Offices (UESO) & UE Convention Centre continue to flourish.

Mr David Liew, Managing Director of United Engineers Developments (UESO is a subsidiary of United Engineers Developments), says the company became an established brand name across Asia because of their offices’ premium location and services offered. “Our serviced offices are strategically located in Grade A buildings of high corporate image or in key buildings within business hubs, operated by a team of experienced staff providing a full spectrum of business services,” he adds.

A strong local presence UESO has four serviced office hubs in Singapore (UE Square, Shaw House, Rochester, and UE BizHub EAST). UE Square along Clemenceau Avenue is strategically located at the edge of the Central Business District, allowing clients to be inside the city but away from the bustle.

Shaw House, on the other hand, is situated along the world-famous shopping boulevard Orchard Road. Executives can live comfortably nearby since many eminent hotels are also located in the shopping haven.

For companies into research and high-technology activities in the biomedical sciences, info-comm technology and media industries, the serviced offices in Rochester are a viable choice as it is located in one-north, a cluster of world class research facilities and business park space combined with educational institutions, residences and recreational amenities.

Perhaps among the most in-demand are their serviced offices in UE BizHub EAST within Changi Business Park, what people

now call Singapore’s next generation high-technology and knowledge-intensive business enclave. UE Convention Centre, with a total floor area of 8,000 sft, is also located within UE BizHub EAST which complements the business portfolio by offering spaces for management meetings, incentives, conventions and exhibition-type events.

Regional presence & expansion plans Their serviced offices in Hong Kong are located at Nine Queen’s in Central, giving their clients the edge of having a prestigious business address. The building is within the Commercial Business District, next to the HSBC and Standard Chartered Bank.

The serviced offices in Jakarta are in the ANZ Tower, which is located in the golden triangle of Indonesia’s largest financial district. It is a short drive away from the city’s Central Business District and the Soekarno Hatta International Airport.

Mr Liew adds that their regional centres

in Hong Kong and Jakarta “open up the opportunity for your business to expand beyond borders of the city-state with more centres coming up across Asia in the near future.” UESO is looking to grow its business further in the Asia region and has plans to plant its flag in Kuala Lumpur and Iskandar Region in Malaysia and also in Guangzhou, China.

UE Convention Centre

Serviced offices in Rochester

Mr David Liew, Managing Director of United Engineers Developments

“Our serviced offices are strategically located in Grade A buildings of high corporate image or in key buildings within business hubs, operated by a team of experienced staff.”

Our team of experienced staff provides a full spectrum of business services

SINGAPORE BUSINESS REVIEW | JULY 2014 11

FIRST MEN IN MALLS

The man you meet at the mall may look like one of those benchwarmers at shop lounges, but he may have even more shopping bags than the woman next to you at the counter. The gender gap can scarcely be seen among moneyed shoppers in the city, a study by Visa reveals.

The Visa Affluent Study states that men are in fact bigger spenders at the department store. On average, they shell out around S$1,601 a month on personal expenses while women spend S$270 less. In the same fashion, men spend S$40 more on online shopping, revealing a not so significant 10% difference in expenses.

Visa defines the term ‘affluent’ as cardholders that earn more than S$100,000 in annual income.

“This has been a growing trend as shopping has become truly universal and new platforms such as online retail stores and mobile apps have increased opportunities for people to purchase goods and services,” says Ooi Huey Tyng , Visa country manager for Singapore and Brunei.

Saving on luxury goods Men and women alike are saving on discretionary items or luxury goods, half of them spending less than S$2,000 a month on discretionary household expenses. The study showed that personal expenses dropped from S$1,639 in 2013 to S$1,472 in 2014. Online shopping each month showed the same trend, with the numbers down to S$394 this year from S$438 in 2013.

On a yearly basis, online spending for women grew 4% from S$360 to S$37, while for men it reduced 21% from S$523 to S$414. Meanwhile, the affluent market spends around a fifth on F&B, the third highest in Asia next to Japan and Hong Kong.

12 SINGAPORE BUSINESS REVIEW | JULY 2014

Are Singaporeans getting tired of traditional brands?

The devil wears Prada no more

B

umping into your fellow celebrity on the red carpet or just at the local ball can be such a let down that now Singapore’s wealthiest are moving beyond traditional luxury brands in favour of more bespoke offerings.

Prada and Chanel are giving way to brands like Bottega Veneta and Kiton that promise the kind of exclusivity that will make people pay thousands of dollars more for a unique, limited-run item. The global economic recovery is doing wonders to encourage ultra high net worth Singaporeans to splurge, just so they can rise above the swarm of Gucci and Louis Vuitton hand bag owners.

“The extremely wealthy segment continues to see their net worth increase disproportionately as they benefit from recovering stock markets. For this segment of the ultra high net worths, they value exclusivity and the ‘feel good’ factor that comes with this and are willing to pay the price,” says Eugene Ho, executive director at Deloitte Consulting.

The challenge of scale and cost But while bespoke brands are rising in prominence among the richest strata of Singapore consumers, traditional luxury brands should not

With the high cost of physically retailing in Singapore, the challenge for retailers who target this ‘bespoke segment’ might be scale and cost to serve.

be too threatened. The ultra high net worth segment is a relatively small market and very hard to please, says Ho. “With the high cost of physically retailing in Singapore, the challenge for retailers who target this ‘bespoke segment’ might be scale and cost to serve. Other challenges include the ability to provide the exclusive level of personal touch. This requires much more customer service training and experience which is often an art form that is scarce in Singapore.”

This has not stopped brands from creating spectacular events to attract their discriminating clientele. Tom Gaffney, head of retail for Jones Lang LaSalle tells of one client that engaged his company to create an invite-only fashion showroom, accessible via a secret password-protected door.

“We’ll see more brands retaining exclusive collections for their ‘V, V, V IP’ customers.”

In a time when purchases reflect personal identity, ultra high net worth individuals have raised their standards even higher as the masses have developed designer tastes. And adding extra zeroes to the price tag is a small price to pay to retain their elite identity.

Jerry Dimos, KPMG’s principal advisor, management consulting, says, “When a person first becomes affluent, he or she wants to be recognised as rich and often chooses explicit designs showcasing newly gained status. As they become mature, their tastes become more refined and they want to be elevated to a level above the mass luxury market. Often they look for goods with innate value, and fitting with their personal styles.”

Global luxury goods sales by market, 2012 (%)

Source: Bain & Co.

FIRST Actual completions may be lower at c.1,945 rooms (eight out of the 12 hotels in the pipeline for 2014).

Fears of a room crunch may be overblown

Watch out for hotel room hikes

T

he great hotel building boom is coming to an end and with it the slightly lower room rates we have seen over the last couple of years. 2014 will see the lowest number of new hotels completed, whilst visitor numbers are expected to peak at 16.8m.

DBS analyst Derek Tan estimates only eight new hotels will open on schedule. “Based on our channel checks, we believe that actual completions may be lower at c.1,945 rooms (eight out of the 12 hotels in the pipeline for 2014), meaning that the industry is expected to see only a 3.5% increase, smaller than the

5% we had previously envisioned,” says Tan. A more positive stance But more optimistic industry observers believe the fears of a room crunch are overblown. They say hotel room supply on the island will reach record numbers and relieve hotel room price pressure from burgeoning traveller demand.

“Assuming all proposed new openings materialise and no hotels cease operations, Singapore’s hotel room inventory will potentially be over 60,000 rooms. There shouldn’t be any pressure on room

rate based on these figures,” says Frank Sorgiovanni, vice president, research and strategic advisory, Asia at JLL Hotels & Hospitality Group.

He says hotel room rates are only in danger of rising if international visitor arrivals to Singapore reach the higher end of the tourism board’s target of 16.8m. However, Patrick Fiat, general manager of Royal Plaza on Scotts argues that the influx of new hotel rooms should be enough to stabilize room rates even amid a strengthening local currency and travel boom.

“Regional travellers remain as the key feeder markets for Singapore.

With the Singapore dollar getting stronger, hotel occupancy was expected to maintain with a slight fall in average room rates. With the adjustment in the number of new hotels, hotels rates are likely to remain the same as last year,” adds Fiat.

Demand for accommodation to exceed supply

Source: STB, DBS Bank

The Chartist: singapore property Rocketing vacancy rates could be plaguing Singapore’s retail and residential property market in 1Q14 as both clusters suffer 7.8% and 6.6% vacancy rates, respectively.

According to Barclays, price-sensitive buyers in the residential market are the ones who pushed vacancy rates to a record high.

“Developer sales jumped 55% m/m (-46% y/y) to 745 units in April 2014 from a low base in March, but remained at 6-year lows. This brings YTD sales to 2,536 units, -63% from last year’s 6,892,” it says. Glitzy Orchard Road isn’t spared from the vacancy plague as rates climbed to 7.8%. According to Savills, this is largely due to the combined effect of the increase in supply from Orchard Gateway and a decline in occupied retail space by almost 140,000 sq ft.

In 1Q14, vacancy rate has jumped to 6.6%, highest since 3Q06

Source: URA, REALIS, Barclays Research

Retail vacancy rate, 2011-Q1/2014

Source: URA, Savills Research & Consultancy

SINGAPORE BUSINESS REVIEW | JULY 2014 13

FIRST

Why are fresh grads in SG pricier to hire?

STARTUP WATCH

Visual + Sense

H

ook Singapore fresh graduates with a high starting salary then keep them satisfied by offering high work-life balance.

Meanwhile, in Hong Kong, you may give a lower starting salary but serve them with plenty of opportunities to move up in salary and position.

These were the findings of Universum’s global survey conducted in Singapore and Hong Kong which interviewed 13,000 university students from both countries. Singapore fresh graduates demand a higher average expected monthly salary of $3,308 compared to their Hong Kong counterparts who only require an average of $2,798 per month for their first job.

Higher salaries in Singapore The relatively higher starting salary expectations in Singapore result from highly-talented foreign workers flocking to the regional hub’s flourishing industries, creating a tight labour market with high wage inflation pressure, says Michael Smith, Singapore country director at Randstad.

While Hong Kong is also seeing a tight labour market, the shortage of

Fresh grads evaluate jobs beyond high salary

talent is even higher in Singapore, says Antoine Lamy, director at Page Personnel Singapore, which explains the possible jump in their base salaries.

But firms should keep in mind that fresh graduates, especially those in Singapore, are evaluating jobs beyond high compensation. Among Singapore employees who intend to stay in their current role in the next 12 months, more than half will do so because of career growth and advancement opportunities, followed by good worklife balance (50%) and competitive salary (42%), says Randstad’s Smith, citing results from the 2013/2014 Randstad World of Work Report.

Singapore fresh graduates demand a higher average expected monthly salary of $3,308.

singapore business review event

How to establish your personal brand through LinkedIn Singapore Business Review’s Eminent Speaker Series kicked off this year with a discussion on maximising LinkedIn for business development. Alexandra Roza, APAC Head of Talent Solutions Product Consulting at LinkedIn and Chris Reed, CEO and Founder of Black Marketing Asia, shared practical insights on how a LinkedIn account can establish and market a successful personal brand.

The discussion revolved around building a personal brand for a specific LinkedIn account and smart tricks on managing and developing that brand; wisely spending time in developing the brand with as much dedication put into building a company’s corporate brand and profile; and capitalising on LinkedIn’s communication platforms to win desired promotions, get hired or gain greater respect among peers and colleagues.

14 SINGAPORE BUSINESS REVIEW | JULY 2014

With textbased search engines, users end up searching but not finding because they can’t quite describe visual things accurately or consistently. ViSenze is born out of the need to fix this.

How? “We create intelligent visual tools that recognize, understand and make sense of these images, so users don’t have do keyword guessing. says Visenze CEO and co-founder Oliver Tan. A web specialist in online advertising, Oliver with 3 technologists founded ViSenze in 2012. They seeded the business with their own money until they won some R&D funding from Spring Singapore (SPRING). They subsequently raised US$3.5m in their Series A with some marquee investors like Rakuten, Walden Int’l, and UOB Venture Mgmt.

Focused Chatting

Dutch nationals Thijs Jacobs and Pieetr Walraven think that discussing things in broad topic chat rooms can be unproductive as chats are often off-topic and things easily get buried. The two, who were active in the Chinese startup scene, introduced Pie, an app which is billed as a ‘smarter chat for work.’

“On Pie, every chat is to the point so you can focus on what’s important. You can start a focused chat around a link, image, document, question, note, and video, anything that’s worth discussing,” Pieeter says.

Pie, which is headquartered in Singapore, accumulated a seed round of S$1million from a list of high profile investors including Koh Boon Wee, board member of Temasek.

co-published Corporate profile

ESSEC in Singapore: Where east meets west

Dr Cédomir Nestorovic, Director of the Executive MBA Asia-Pacific, talks about the importance of a holistic curriculum in today’s international EMBA programmes. to upgrade their skills and increase their knowledge on management.

“The resources are increasing (in Asia) so ultimately there is a virtuous circle – on one side people would like to get more knowledge and at the same time there is a need for organisations in the region to manage and develop their talents,” he explains.

Dr Cédomir Nestorovic, EMBA Asia-Pacific Programme Director, ESSEC Business School

S

ingaporean executives no longer need to cross the ocean and travel to the other side of the world if they want to access programmes offered by foreign universities, now that international universities have reached their shores.

ESSEC Business School, an established and recognised European business school, set up its Asia-Pacific campus in 2005, offering courses with a strong focus on the growth opportunities in Asia.

Matching the brand with the programme Dr. Cédomir Nestorovic, EMBA Asia-Pacific programme director and professor at ESSEC Business School, shares that during his discussions with applicants, he encourages them to look at both the brand name and the programme of the school then evaluate its relative importance to their personal goals.

“You can acquire a network, you can acquire a reputation which is given by the school but the programme will give you something that will be a permanent good – the knowledge and the upgrade of skills,” he adds. For now, ESSEC is offering their Executive MBA programme over a span of 15

months, the classes broken down to modules of 6 full days for a total of 66 days.

The school takes pride in its innovative curriculum that incorporates the latest insights on Big Data, Value-creating Innovation and Branding with digital and social networks.

There is an emphasis on innovation and leadership in the curriculum while providing solid background on Asia’s business models.

Dr Nestorovic believes that their comprehensive programme and established brand are their unique selling points for potential candidates. The ESSEC brand has been known in Europe since 1907 and has consistently been in the top 15 of international academic rankings.

Eyes on Asia It is therefore not surprising that the school decided to open its doors to Asia. Always at the forefront of business trends, ESSEC recognises the importance of building a presence in Asia, the world’s new powerhouse.

Dr Nestorovic says that with the continuous growth in the region, people in Southeast Asia are always looking for opportunities

“The ESSEC brand has been known in Europe since 1907 and has consistently been in the top 15 of international academic rankings.”

Learning from the region Because of the boundless potential and dynamic growth in the region, courses focusing on Asia are given importance in the ESSEC Executive MBA Asia-Pacific. The programme consists of 20 courses, with a pan-Asian core of which 8 courses are focused on the region.

The courses on Asia are further separated in two parts: in understanding the Asia of today and looking forward to the Asia of tomorrow. It highlights unique trends in Islamic business and future global powerhouses. The Asia-centric courses tackle various economic issues, geopolitics, corporate strategies and unique business models in the region.

Other important topics that the programme stresses on are entrepreneurship and innovation. “Some potential candidates may say well I’m not necessarily interested in entrepreneurship and innovation but they forget that even in their own company, in their own business, they have to show some propensity towards entrepreneurship, especially for the change of management and the adaptability to the new actors or to new forces that we have in the market,” Dr Nestorovic points out.

He says that while companies, who are footing the tuition fee of their employees, want technical courses because they want immediate return-of-investment, executives who have ambition should think otherwise.

For executives to reach upper levels of management they would benefit more from a programme that looks at vision creation, people skills, entrepreneurship, and innovation.

The school’s next intake is in October 2014. For more information, visit their website at www.emba-asia.essec.edu.

SINGAPORE BUSINESS REVIEW | JULY 2014 15

FIRST

NUMBERS ‘ ‰ The retirement gap

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hen founder and chef Beatrice Wee had to close down her vegetarian restaurant CERA last November 2013, she was devastated. But she was left with no other choice when the rent for their 1,200-sq. ft. space in Upper Thomson Road increased 21% and sales remained the same. And she’s not alone.

Singapore’s food and beverage sector has been seeing alarmingly high casualties with more restaurants relocating or closing down, with nothing to blame but rising rents and the manpower crunch. Over the last five years, rents of F&B space have increased by 15%, and restaurateurs are definitely feeling the pinch.

Chef Lino Sauro, owner of Italian and Mediterranean restaurant Gattopardo, relocated to a 3,400sq. ft. space along Tras Street when he was asked for nearly double the rental for their 5,000-sq. ft. space at Hotel Fort Canning after more than 3 years tenure. “Over the past few years certain operating costs have grown faster than we could increase sales, so our margins have been squeezed.

We have reduced the size of our kitchen and service area in order to increase the turnover per square foot. We also cut our range of items in the menu,� says Sauro.

But the struggle for some F&B 16 SINGAPORE BUSINESS REVIEW | JULY 2014

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THOUGHT LEADERSHIP SERIES 2: EDUCATION

What drives online marketing, hype or culture?

Dr. Mike Molesworth of the Southampton Management School says digital marketing is all about understanding consumer behaviour online.

I

nstead of burying their heads in books or articles on effective marketing techniques, advertising executives may want to sit back, relax and surf the web once in a while. What does viewing the new viral video on Youtube or trending topics on Facebook and Twitter have to do with business and marketing?

Well, it may provide clues on how to best approach consumers online. “The Internet lets organizations know more about their customers and other stakeholders than they ever have before,” Dr. Mike Molesworth of the Southampton Management School says.

He points out that target audiences online are not just segmented by age or demographics, but also by behaviours, purchase and browsing history. “So behavioural targeting, based on small segments, even of just one, is now possible.

The result is a dynamic and complex set of challenges to understand what motivates consumers and how to drive them from search or enquiry to purchase and repurchase,” he says.

Trend vs hype Molesworth, Southampton’s programme director for MSc Digital Marketing, cautions, however, of distinguishing trends from hype.

“You have to separate excitement over the latest platform from the transformed cultures that sustain it. It’s a problem that things can seem to move so fast that in trying to keep up you can lose time to reflect on both the bigger changes in consumer practices that marketing might inform and respond to,

“The Southampton Management School is one of UK’s leading management schools and its research findings inform their teaching.

The School’s Master of Science in Digital Marketing programme is offered in Singapore via SIM Global Education.”

and the aspects of marketing that are more constant,” he explains.

An example he gives is the preference of consumers to “rent” instead of owning resources online. This is the case of those paying a fee to have access to online or cloud data such as music and films. “You might sum up these trends as relating to new cultures of consumption. Online imagined community, social media, videogames and the like all offer new ways for consumers to build meaning and identity and the contribution of marketing to this process is changing in ways that make them more like valuable members of these group than remote and external product and service providers,” he says.

The Internet is a treasure trove of marketing data. “There is considerable data available to companies from which they can attempt to extract data. This is almost an opposing trend. Behavioural targeting, automated customization and sophisticated eCRM are becoming important issues for marketing departments,” Molesworth says.

The problem now is how to deal with so much data. “Organizations may quickly find they have more data than they can deal with in an effective way. And again, where consumer practices change fast, monitoring and responding to the trends that data makes transparent becomes more complex,” he adds.

He points out the interesting characteristics of digital marketing, which “becoming potentially more human, intimate and cultural, as well as algorithmic, automated and machine-generated.”

Demographics matter less now as opposed to online behaviour since many trends have become global. “Information, memes, and critical comments can circulate globally and instantly. This requires more complex coordination for international marketing,” he says.

Social media On the other hand, social media help creates virtual or imagined communities. And while they are rich in data and “consumer meaningmaking processes,” it is also a venue that allows hostility against brands and marketing,

Dr Mike Molesworth Programme Leader, Southampton Management School Molesworth says.

He warns, “Audiences on social media can be fickle and savvy. They can adjust quickly to changes in taste not just in consumer goods, but in the platforms themselves. There is plenty of buzz about social marketing and no shortage of companies willing to offer all-tofrequently tactical campaigns, but the longerterm and more strategic co-ordination of social media remains to be realized, as does successful integration with other platforms.”

Prospects The adoption of smartphones has helped a lot, creating opportunities for complex marketing. “This is a crowded market. Marketers must quickly move move beyond simple and derivative app offerings into experiences that cut through clutter of the small and short small-screen user experience,” advises Molesworth. In the end, education is the key. “Success in digital media seldom comes from simply knowing how to do the latest online marketing, so the focus of education now needs to be critical intellectual skills for developments that are yet to happen,” he says.

FIRST appointed by all 3 search giants.

1

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3

8

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5

10

The 10 hottest ad executives and marketers under 40

C

onfidence, attitude and influence are just three of the must-have characteristics of professionals in the advertising and marketing industry to get the job, win the pitch, and rise through the ranks.

Singapore Business Review set out to find 10 examples of ad execs and marketers embodying the traits of success both inside and out.

The list considered executives for their lofty positions on the corporate ladder and with client lists that would be the envy of any of their peers.

They were arranged from the oldest to the youngest.

1 Melvyn Lim, 39, Executive Creative Director, OgilvyOne Singapore Melvyn became the first and youngest Singaporean to ever hold the position in 2011. He oversees the conceptualization and production of creative campaigns for Amex, BP, Google, IBM, IHG, Nestlé, Philips, SingTel and UPS. Most recently, he played a key role in Design Society where he curated the “100 Icons” exhibition, a detailed documentation of Singapore’s modern design history.

2 Shirley Tay, 39, Managing Director, Ogilvy & Mather Singapore Shirley is the first woman to hold crucial position for the agency. In 2012 she led the team that won Singapore’s first 18 SINGAPORE BUSINESS REVIEW | JULY 2014

ever IPA Gold award in London for the Health Promotion Board’s internationally acclaimed “I Quit” campaign.

Over the years she has built a strong portfolio of clients spanning a wide array of industries ranging from financial to FMCG to hospitality for the world’s top brands including Nestle, Volvo, Kraft and Kimberly-Clark.

3 Michelle Wong, 37, Head of Consulting, OgilvyOne Singapore Michelle became the first Singaporean woman to ever hold her current position in 2011. She leads a team counselling a number of Fortune 500 companies across a range of sectors.

In 2014 Michelle led and won the competitive pitch for Singapore LTA’s prestigious 3-year digital strategy assignment.

Leonard Tan, 36, CEO/Founder, PurpleClick Media Online marketing veteran Leonard founded PurpleClick, an advertising agency specializing in Search Engine Marketing (SEM) to improve the online marketing capabilities of his clients. He has led PurpleClick to be the longestserving Google and Yahoo! accredited partner in Southeast Asia since 2007 and also sealed an exclusive partnership with Baidu.

PurpleClick boasts of holding the status of being the first and only company 4

5 Gary Teo, 33, Regional Technology Director & Projects Director, VML Qais Gary played a critical role in the winning and delivery of major accounts such as INSEAD Business School, 3M, Revlon, Shiseido, Performance Motors, Dell and many others.

Gary is an active participant in the local startup scene and provides strategic consulting for several startups in the region including Redmart, Triibe, Give Singapore & Racerlink.

6 Charina Widjaja, 28, Business Development Director, DFW Creative Charina brought supermodel Naomi Campbell to Singapore to Singapore for her Southeast Asia runway debut.

Included in her portfolio are British Council, Google, Maybank, Nokia, LVMH, Raffles Hotel, Topshop, STB, HP, and Singtel.

Fairil Yeo, 28, Business Director, VML Qais: Fairil established new offices of VML Qais in the region: in Indonesia (2013) and Malaysia (2014). Its major portfolio includes 3M in the APAC region and INSEAD for their online platform revamp.

7

8 Sharon Siew Hui Fen, 28, Head of Digital Clients Services, Yolk Singapore Sharon is a hip hop dancer, who once won the top spot in ‘Giant Star Singapore’, a national talent show which judges sales and marketing acumen, personality and talent. Included in her portfolio are Lenovo East Asia, Heineken Asia Pacific Breweries, Metro Singapore and Adobe Southeast Asia.

Madina Kalyayeva, 27, Account Manager, Grey Group Singapore Madina manages several client servicing and creatives teams, serving regional and global accounts including Qatar Airways and the BK Birla Group of companies.

9

10 Miguel Martinez, 26, Senior Account Executive, Grey Group Singapore Miguel led the conceptualization of the campaign that helped healthcare brand Physiogel achieve its highest market share levels since 2010 – becoming the No. 1 hand and body moisturizer brand in Singapore.

SINGAPORE BUSINESS REVIEW | JULY 2014 19

FIRST The Analysts’ call

Will SPH ad revenues recover?

SPH’s ad revenues remain muted

SPH stuck in an ad quicksand

T

Sim, analyst at DBS. Newspaper ad revenue fell 7% yoy due to a 7% and 7.9% drop in display and classifieds ads, respectively. Magazine revenues also faltered during the quarter, so the combined newspaper and magazines segment saw a 5.7% slide to drag down group revenue by 1.2% to S$278.8m.

Sim expects SPH ad revenues to remain muted in the coming quarters, enough to shave down the company’s earnings estimates in FY2015 by 12%.

Jessalyn Chen, analyst at CIMB, share this pessimistic outlook and her research firm cut its FY2014-FY2015 core earnings per share forecast by 9-15% in the face of lower advertising and Newspaper ad revenue fell 7% circulation revenue, as well as higher yoy due to a 7% and 7.9% drop in operating costs. display and classifieds ads.

Chen also advises investors to start lowering their exposure to the stock given a poor earnings outlook for the core media segment. She warns that climbing staff costs and one-time charges dividends may also dry up if SPH fails to contributed to the 36.8% yoy decline in find a way to re-invigorate revenues in the operating income to S$53.5m, but analysts core media business. believe the shrinking ad revenues is by far the most worrisome.

So far SPH has responded to the Ad revenue decline accelerated in the challenge by strengthening its digital ad second quarter to -7.3% yoy from -2.9% in push. The company recently revealed plans the first quarter. This is because property to strengthen the online video capabilities developers have remained cautious amid across its more than two dozen website, tough market conditions with only a few which have a combined audience of 23 million unique browsers and command 360 launches being promoted, says Carmen million page views per month.

Lee, analyst at OCBC Investment Research, Part of the digital advertising push translating into anemic ad placements from includes allowing brand owners to run the sector.

SPH newspapers have been particularly online video marketing campaigns and hit by the weaker ad contribution from the creating sponsored brand content to be run property and auto segments, notes Andy beside online editorial stories. he media giant seems helpless as ad revenues continue to slide. Singapore Press Holdings (SPH) has been doing everything possible to keep earnings afloat, from restructuring compensation and removing a press line, to aggressively diversifying in to other businesses like properties and events. But it remains stumped on how to solve the one big problem burning a hole through its bottom line: faltering ad revenues.

In the second quarter, SPH posted worsethan-expected ad contributions. To be sure,

20 SINGAPORE BUSINESS REVIEW | JULY 2014

Andy Sim – DBS We expect the Group’s core ad revenues to remain muted, which should continue to impact earnings.

We are retaining our forecast of 22 Scts DPS for FY14F, implying 5.2% yield at current price. This should support the share price. Key risks to our recommendation include: large swings in either direction in the core newspaper and magazine operations, and (upside risks) accretive acquisitions and/or cash payouts to shareholders.

Carmen Lee – OCBC The outlook for ad revenue remains difficult, with the decline accelerating to a -7.3% YoY dip in 2QFY14 versus -2.9% in 1QFY14. Management continues to cite tough conditions, particularly in the property space as the number of new launches fell significantly YTD. Material costs remained stable (newsprint unchanged QoQ at US$611/mt) while staff costs rose by S$15.6m. Going forward, management indicated that they would reduce headcount by ~300 from its current level of 4.3k, but expect the staff costs run rate to increase by ~S$10m p.a.

Jessalynn Chen – CIMB We downgrade our call from Hold to Reduce on the back of 1) the poor outlook for advertisements given the restrictions on borrowing for cars and property, 2) higher staff bonus (estimated S$10m p.a.) under the new bonus scheme, 3) margin pressure from falling revenue and stable to rising costs, and 4) lowerthan-expected contributions from Seletar Mall. Dividends may also be at risk if SPH cannot find an avenue to counter the declining core media business.

co-published Corporate profile

“Made in Singapore” badge on your next motorbike?

Meet the man behind Singapore’s only automobile manufacturer.

A L I F E A I R A U T O M O B I L E S P T E LT D

A

LIFE Air Automobiles Pte Ltd is a young, energetic business, founded on a new concept and acting as the foundation stone for a new industry. Courageous and cavalier, the fledgling organisation is the brainchild, and is driven by the great ambitions, of its founder, Singaporean entrepreneur, Devan Nair.

Founded last year, ALIFE is billed as Singapore’s only automobile manufacturer. The company’s primary focus is on the design and development of clean air and sustainable automobile solutions and products.

ALIFE’s mandate is a true paradigm shift, “We are not positioned as a competitor to other motorcycle makers or brands,” says Devan. “We don’t have the luxury or the vast experience to compete. Our strategy is to introduce a lifestyle product that can reduce carbon emissions – a motorbike with an alternative style of engine that will reduce fuel consumption and give the consumer more drive and power. This is very critical for us.”

Devan’s strategy in a world recently forced to re-consider the ills of capitalism gone wild, is to collaborate rather than compete. It’s an example of a new millennium business model, which takes into account not only a business’ stakeholders, but all those who have an interest in or are affected by a business’ fallout.

Traditionally considered the antithesis

of an environmentally considerate industry, the automobile sector is beginning to plan its future in a way that is attractive rather than repugnant to Gen-Y and Millennials.

Devan is a champion of a new wave of auto executives. Having left home at 16 to find his way in the world, Devan’sbackground rather uniquelymerges design and technology.

“Our agenda is to support the auto industry. We have found partners worldwide who can supply us with competent components.”

ALIFE’s story is the quintessential Singapore story. Singaporean society, describes Devan, is very conscientious with a government that promotes quality. “All products that carry the Singapore brand needs to qualify for the high standards of quality and reliability this is our selling point across the region and around the globe,” he adds. “In our industry that includes environmental innovations; reducing carbon emissions and fuel consumption and ultimately evenintroducing alternative fuels.”

ALIFE’s products are not inexpensive particularly in a region that is flooded

“We think that we can bring the price to an affordable level that consumers can reach out to and adopt our technology.”

Devan Nair Group CEO & Chairman with super-cheap, often micro-financed, motorbikes. It is not an understatement to say that Southeast Asian small business is built on the back of the motorbike.

ALIFE is not, and has no intention of fightingfor space in this convoluted market sector. “We don’t intend to pretend that we can sell out our products cheaper to consumer, we don’t think that there’s a possibility. We think that we can bring the price to an affordable level that consumers can reach out to and adopt our technology. And this is the key principle behind our corporate governance strategy.”

Blending quality, fashion, lifestyle appeal and environmental responsibility considerations, and at the same time founding a new industry and keeping pricing under control, is a monumental plan for any businessperson to set. It takes skill, experience, passion and, of course, luck. Devan’s unique background added to an environmentally-involved society that craves choice, might just spawn a generation of stylish “made in Singapore” motorbikes threading the lane markers of the Island Republic’s vast motorway network.

For more information, please visit: www.alife-air.com.

SINGAPORE BUSINESS REVIEW | JULY 2014 21

FINANCIAL INSIGHT

Which startup fits the bill?

The hunt for Singapore’s billion-dollar startup begins Venture capitalists are looking to Singapore for the next Google, but deals like that are still some ways off.

J

ust a few years ago, Singapore may not have even been a blip on the radar of venture capital (VC) firms searching for the next startup with a billion-dollar valuation. Now the country has piqued firms’ interest as a hotbed of innovation and some have poured in investments in the hopes of discovering a Facebookcalibre startup. However, VC firms may have to wait several years to hit the jackpot, argue analysts, because while Singapore has the brains to create such startups, the country still lacks key systems to drive global success.

Singapore has spent the last two decades laying the groundwork for the currently thriving startup scene, says Eric Tachibana, Founder and Managing Director of eXtropia Holdings, who has witnessed the growth of

22 SINGAPORE BUSINESS REVIEW | JULY 2014

Singapore has spent the last two decades laying the groundwork for the currently thriving startup scene.

Singapore’s startup industry since the 1990s.

Singapore spent the 1990s developing a core national startup infrastructure. The government supported the startup scene with immigration policies, tax relief, subsidies and university curriculums that helped nurture a budding professional startup VC industry and the first few generations of startup entrepreneurs. But by the end of the decade, it became clear that there was a need for a national funnel to sustain VC portfolios.

“At that time, the funnel looked more like a pipe, with a chokepoint caused by trade sales.

I think primarily because the early VCs and startup entrepreneurs did not have the guts to really shoot for initial public offerings (IPOs), making trade sales too

attractive,” says Tachibana.

Entering the 2000s, Singapore worked to bolster the national funnel by investing in professional incubation and acceleration programs. Co-working spaces were built and government seed programs were established. This strategy proved successful, notes Tachibana, and Singapore began to develop a thick funnel of startups moving from ideation through validation of minimal viable products and into the early phases of traction.

Success beyond early stages Tachibana says Singapore must now spend the next decade turning these rough gems into brilliant, high-value diamonds.

Startups must be given the right tools and funding to successfully grow not just in the local market, but internationally as well. “With the seed portion of the funnel working, this decade is going to be all about building out Singapore’s growth infrastructure. That means a returned focus to Series A in the first half, and then a focus on building investment banking

FINANCIAL INSIGHT flows and Series B in the second,” says Tachibana. If everything goes according to plan, he believes Singapore will see its first set of IPO darlings by the start of the next decade. “There is too much top-of-funnel, early stage funding focus,” concurs Sangeet Paul Choudary, Director at Platform Thinking Labs.

“The government’s startup grants, while thoroughly laudable, are heavily focused on injecting new ideas with seed capital.

Even some accelerators here are more interested in the number of startups they can get in rather than the number of businesses they can get out of the system.

Too little mid-funnel, growth stage funding, translating into the Series A crunch we all loathe.”

Outcome-based grants Choudary suggests creating outcome-based grants that reward customer adoption or revenues with greater funding which may help nurture more businesses than experiments. eXtropia Holdings’ Tachibana says we lack a mature Series A ecosystem.

“That said, given the government’s recent announcement to fund 6 VC firms with S$48m, we’re moving quickly to resolve that issue. However, it’s not just about seeding investment funds. Without disrupting the work we’ve done to build the funnel, going forward, we’ll need changes to policy, attraction of foreign talent, and a continuing focus on the Singapore brand abroad. Most importantly, Singapore Inc. must use its procurement muscle to provide revenue sources and credibility for startups,” he adds.

Even though Singapore has fantastic infrastructure to support startups it still lacks a reliable system to rapidly scale businesses without having them burn their VC funding, says Choudary. This is a big weakness that makes the country less likely to attract VCs compared with India and China.

“Most startups trying to go regional face the problems that

they need to solve themselves. If instead, Singapore were to create conditions for rapid regional scaling, it would drastically bring down burn rates and make things more attractive for VCs.” Choudary suggests the government can launch an overseas scaling network that connects local startups with a network of potential regional partners. Funding incentives can also assist startups looking to set up regional operations. “A structured, centralized program to help with regional expansion, that startups could plug into, would reduce much of the repeated friction that every startup encounters while scaling.”

Why regional scaling is a must Rapid regional scaling is imperative for Singapore since the local market is too small to provide the kind of returns that VCs require. From the get-go, Singaporean startup founders looking to secure funding from VCs must envision a business with a regional or, preferably, global business model.

“The 200 million middleclass consumers we will see in Southeast Asia by 2020 will create an enormous demand for products and services, in particular when it comes to information technology, which most VC funds are after,” says William Klippgen, General Partner at Clickstream Ventures.

This is easier said than done, especially for Singaporeans who have to shake off their traditionally conservative and risk-averse attitude, says Jack Wang, partner at Lexico. “The Singapore education system favours scholarship tracks and academic excellence. Risk taking and startups are not the top choice for young talents. Despite the excellent government incentives, startups need to scale up with a global vision to succeed. This is often not easy for young Singaporeans and startups.”

Singapore may have made VCs look its way with the help

Frank Levinson

Hugh Mason

Jack Wang

Sangeet Choudary

of government initiatives such as co-investing schemes. But for it to capture the full attention of VCs, the country must prove that it can consistently produce multibillion-dollar startups through exit deals. Or else, it will just be all potential and no profit. “Long term, the ecosystem must generate significant exits on a sustained and somewhat steady basis.

Then the system becomes selfreinforcing,” says Frank Levinson, founder and managing director of Small World Group.

Choudary, for his part, notes that the last couple of years have seen important exits, most notably Viki. There has also been increased buying activity by larger North Asian buyers, which has raised the likelihood of exits for investors. New VCs should also play a big role in taking the Singapore startup scene to its explosive next stage of growth.

Levinson cites Jungle Ventures, Golden Gate Ventures, and TNF as a few new entrants that have proven themselves well.

For Hugh Mason, CEO at JFDI. Asia, local funds like Monk’s Hill Ventures and Northstar Groups’s Hia Goh and Shaneee Chesson, who have evolved into the role of operator VC, have great potential.

“They have physically moved in with us at JFDI to be closer to the powerhouse of startup creation because they recognise that it’s only getting close to startups at an early stage and helping us to ‘farm’ future talent that they will have a sustainable source of great, de-risked businesses in which to invest.”

Venture-capital investment in tech sector, in millions of USD

Source: Asian Venture Capital Journal Research/Wall Street Journal

SINGAPORE BUSINESS REVIEW | JULY 2014 23

ANALYSIS: the rise of micro CBDs

What’s driving decentralisation in Singapore?

Singapore goes micro as office demand soars

Micro CBDs are central to the nation’s next decade of office growth.

S

ingapore has a battle plan for the influx of companies looking for office space in its already jam-packed central business district (CBD): funnel them into nearby micro locations, offering the same globally renowned infrastructure support and business incentives –but at significantly cheaper rents.

This decentralisation strategy should help ease rising office demand. Local start-ups and manufacturing conglomerates are less concerned about a glittering address than overhead costs, making them flock to these commercial centres. But it will take time to execute effectively, say analysts. Demand for office space in Singapore is set to boom through to 2020, according to Jeremy Sheldon, head of markets, Asia Pacific at Jones Lang LaSalle.

As a world-class financial hub that makes it especially easy and

24 SINGAPORE BUSINESS REVIEW | JULY 2014

Micro CBDs will likely offer rents that are 20% below that of comparable buildings in the CBD.

compelling for companies to set up shop on the island, Singapore will attract more firms to establish their regional and global headquarters here.

“Singapore and Hong Kong will look to cement their status as global gateways, leveraging their ranking in first and second place globally for ease of doing business. According to Z/Yens’ Global Financial Centres Index, London, New York, Singapore and Hong Kong now make up the top four global financial centres,” says Sheldon.

With more companies requiring office space, Singapore’s CBD landlords can continue to command sky-high rents, but a growing number of potential tenants will balk at the prices and consider secondary office locations at the central periphery that are dubbed as micro locations or micro CBDs.

“Location has been the most important determinant for office space users, however rental cost is also becoming a key factor in office location choices, especially for budget-conscious tenants and new business start-ups,” says Alice Tan, director and head of consultancy & research at Knight Frank Singapore.

“These users would either go for ‘CBD fringes’ such as Marina Centre or Beach Road, or choose city fringe locations within a short drive of the CBD. Proximity to the nearest MRT station, with an MRT line that is within 10 minutes train ride of the CBD is also preferred, such as Pasir Panjang, Buona Vista.”

Alan Cheong, senior director at Savills Research, estimates micro CBDs will likely offer rents that are 20% below that of comparable buildings in the CBD. This is no small change when factoring in the high monthly average gross rent in the CBD, which has increased to S$8.99 per square foot for Premium and Grade A office space in the first quarter of 2014, up 3.2% from the previous quarter, based on Colliers International data.

Planned decentralisation Cheong argues that there is a distinct difference in how Singapore and other Asian countries are approaching their decentralisation and micro CBD strategies. He adds that in Singapore, the decentralisation drive is more of a planning intention rather than one that grew from market forces.

“Given that Singapore has a very open economy, over the years, we observed that each time there are massive bouts of office, or for that matter other types of property, supply, they get absorbed relatively quickly.

It is this openness that could partly explain the phenomenon that here, demand somehow ‘chases’ supply,” he adds. “New to market tenants will sprout up and existing ones can expand

ANALYSIS: the rise of micro CBDs to fill the space. Landlords are also financially strong and would continue to bid for whatever sites being offered by the Government in their confirmed land sales list.”

Cheong says part of Singapore’s current master plan is to funnel growth towards the regional centres – namely Woodland in the north, Seletar in the northeast, Tampines, and Jurong East – while still keeping up development in the CBD. “Therefore, we would expect the CBD to expand towards the Marina Bay area but at the same time see more commercial developments in the regional centres which try to make each of the regions self sustaining,” he says.

Regional centres are being developed to accommodate the increase in office tenants who want to do business in Singapore but cannot afford or do not want to pay the premium rates in the CBD. “For those that can only afford to pay mid-tier rents, cost is a key consideration and if their businesses do not require the prestige of being located in the CBD, these may find an abode in the regional centres,” says Cheong.

Regional centres are also “Both tenants and owners are exploring new office locations beyond the traditional CBD and city centre areas, and discover new office clusters with refreshing agglomeration of key business sectors. A good example is the Buona Vista office cluster at onenorth, where the completion of the Metropolis has brought about a new dimension of decentralized

Alice Tan

Alan Cheong

Jeremy Sheldon

office landscape with relatively high-profile established business tenants setting up their bases there.

The presence of these tenants have enhanced the image and status of the one-north area, creating a paradigm shift on possible new office locations beyond the city centre,” says Tan. CBD still offers prestigious location She adds that despite the skyrocketing cost of office rents in the CBD, deep-pocketed top corporations still see the appeal and prestige of being located in the country’s corporate nexus where they can presumably attract the best talent and be within reach of key partners.

“For office users taking up prime Grade A space in the CBD, cost is not so much of an issue and at times, the higher rents they pay are more a reflection of their bullish view in setting up operations in Singapore. In some ways, the high rents give an indication of the attractiveness of Singapore as an office hub for these tenants.”

Cheong says most of the microCBDs are still in their infancy stages of development and it will take years for them mature into hubs that can compete in address prestige and commercial activity.

And when they eventually take off, micro CBDs will not lure tenants away from the CBD, but instead generate their own demand markets.

“The micro CBD structures

will take a decade or more to materialise in any substantial way. So far, only the Jurong East area is taking off, leaving those in the Woodlands and Paya Lebar districts to play catch up.”

“When these micro CBDs have reached a level of significant development, it would mean that our population will be closer to 6.9 million people by then because headcounts are needed to take up space in these commercial centres.

It is yet unclear how the office market will segregate in future, but if the market is open, the CBD and the micro CBDs will find their own niches.”

“As prime land reduces in supply and becomes a lot more expensive with the rise in property prices, coupled with traffic congestion issues, decentralization of office spaces is necessary in order to offer more office location choices to a wider group of business space users,” says Tan. Sheldon, for his part, warns that Singapore faces three key risks which could stymie its office sector development in spite of what seems like a sound micro CBD plan. the first is the threat of competing regional gateway cities such as Hong Kong and Shanghai that may become preferred over Singapore. Second is the uncertain global and local economic outlook that could scare off tenants. And the third is an over-cautious land policy that may hinder the country from fully meeting burgeoning office demand.

Global Financial Centres

Source: Z/Yen Global Financial Centres Index, 2007 - 2013

SINGAPORE BUSINESS REVIEW | JULY 2014 25

SALARY SURVEY 2014

Wanted: local talent with international expertise

Candidates who fit the bill can expect a 15% average pay increase when they switch jobs.

B

eing a local already gives jobhunters a big leg up, and hiring companies will roll out the red carpet of employment when they see that you have strong international expertise that can help them expand across Asia and beyond. A strong grasp of the local and foreign markets has risen as a top skill among recruiters, according to recent employment surveys, and has ramped up salaries enough to attract Singaporeans based abroad to consider accepting lucrative offers back home.

With the continued economic expansion of the Southeast Asian region, Singapore is benefiting from the influx of businesses looking to establish a regional presence, and candidates who know the ins and outs of Singapore and the region have an advantage in the hiring process.

This is because skilled candidates

There is strong preference for local talent, which is in part driven by the local regulatory bodies enforcing tighter conditions on working visas.

possessing both local and regional knowledge and experience, who can hit the ground running and add immediate value to their employer, are highly sought after, according to Michael Smith, Randstad country director for Singapore. These candidates can expect on average a 15% pay increase when they switch jobs, he says.

Meanwhile, Toby Fowlston, managing director at Robert Walters Singapore says the focus on hiring local Singaporean talent will continue this year.

Singaporean jobseekers have luck on their side as the government’s strict regulations and employer’s preference for candidates with local knowledge give them an upper hand in the city-state’s highly competitive labour market.

“There is strong preference for local talent, which is in part driven by the local regulatory

bodies enforcing tighter conditions on working visas, and also by companies looking to ensure employees have the local knowledge needed to step into a new role with confidence,” says Jerome Bouin, managing director, Michael Page Singapore.

Folwston adds that an increasing number of Singaporeans based abroad are looking for opportunities to come back home with growth in potential areas such as financial services.

With increased regulations on the industry imposed by the Monetary Authority of Singapore, there has been a growing demand for professionals in the areas of controls, compliance, risk and governance.

Businesses setting up local headquarters also shore up the demand for workers in the corporate space. The professionals come from a range of backgrounds and are required to manage all departments from human resources to finance, sales and marketing and IT support.

Not everything is about the locals, however. According to Michael Page’s Bouin, niche roles in oil and gas as well as healthcare and life sciences are expected to attract candidates from overseas, as these areas face a shortage of local talent that have the experience needed to work in top technical and upper managerial roles. This results in companies being forced to look outside the local market as they seek to sustain local operations, he adds.

About 48% of the employers they surveyed indicated that they are expecting skills shortages over the next 12 months.

Recruitment Based on employers surveyed by Michael Page, 15% of companies believe their current hiring activity is stronger compared with the last 12 months. About 19% said it was slightly stronger; the biggest chunk- about 54%- said it was steady, while 8% and 4% said it was slightly weaker and weaker, respectively. Almost half of employers (48%) believe there will be a professional skills shortage

SALARY SURVEY 2014 in the next 12 months, while 38% disagreed. About 14%, meanwhile, have no idea.

Of the companies surveyed, 47% said the skills shortage will cause salaries to rise above the inflation, rate. Four out of 10 believe salaries will increase, but only at the rate of inflation while 13% said the skills shortage will not impact salary levels.

As an effect of the skills shortage on businesses in Singapore over the next 12 months, 42% said companies would need to develop more targeted attraction strategies; 27% said employers would source talent from abroad; 16% said it will be difficult to maintain headcount, while 13% said it won’t have an effect.

As the talent market becomes tight, employers are pressured to offer competitive renumeration packages in the hope of attracting and keeping desirable talents that propel the business.

“Singapore continues to offer an attractive location for companies establishing a regional base to take advantage of the nation’s favourable tax regime and strong regulatory framework. This underpins Singapore’s very low rate of unemployment, and as a consequence, businesses must find new ways to attract and retain top talent,” says Stella Tang, managing director for Singapore at Robert Half.

Competitive salaries According to the 2014 Randstad survey of 6,500 Singapore residents, a competitive offer is the most important factor in determining whether an employee will choose to stay or leave a company. In its latest World of Work Report, Randstad says six in 10 employees surveyed in Singapore had their salary increased over the last 12 months. Randstad expects this will continue to rise by 5% on average this year. Some employees, however, are luckier than others.

“Specific roles where employees may experience higher increments include risk, audit and compliance within banking and finance, finance technology

roles supporting change projects, regional sales roles covering emerging markets, and lastly jobs related to specialist research, sales or development within health,” Smith says.

For Fowlston, accounting and finance professionals with niche skills in areas such as treasury, taxation and internal audit will command premium salary increments this year. Tang says 55% of chief financial officers anticipate increasing the salaries for their finance and accounting professionals this year in a bid to attract and retain quality talent.

Close to one in four (37%) of businesses will increase bonuses in 2014, she adds.

Among the employers surveyed

by Michael Page, 74% said all employees will receive an increase, dependent on performance.

Twelve percent said only the best performing employees will see increments in their salaries, while 9% said all employees will receive the same percentage increase.

Of the companies surveyed, 56% said the global economic conditions will affect salary levels in the next 12 months. About 52% said domestic economic conditions will also be a factor, while 45% said competition with other companies will dictate salary levels.

Establishing a brand Aside from the need to dangle carrots, companies are also under pressure to establish an appealing employer brand, and they have to be more competitive in offering benefits such as work-life balance, flexible working options and providing robust training and career development programs.

Companies surveyed by Michael Page enumerated seven popular tools to attract and retain talents: recognition and rewards (29%), structured career progression (28%), training and mentoring partnerships (13%), strong company culture (9%), work-life balance initiatives (9%), company branding (8%) and international opportunities (4%). As the labour supply becomes thin, organizations are also looking into utilizing contract staff.

HK trumps Sg in expatriate pay Hong Kong still offers higher expatriate pay, but Singapore is catching up. Companies looking to post expatriate middle managers and top-level executives in Hong Kong and Singapore should be prepared to pay slightly more for the former posting than the latter due to Hong Kong’s relatively more expensive benefits component, which includes costs of accommodation, international schools, utilities or cars.

Hong Kong ranks as the fifth most expensive location for expatriate packages with an average annual cost of US$273,000, edging out sixth-place Singapore where the average expatriate package costs US$257,000 per year, according to the latest MyExpatriate Market Pay Survey from ECA International.

While total expatriate packages remain lower in Singapore than those typically awarded in Hong Kong, Singapore packages have increased at a faster pace than Hong Kong’s over the past year largely due to the cost of benefits rising more quickly in Singapore, the survey notes.

Package components The expatriate package was computed using three components: Cash salary, benefits, and tax. In both countries, the benefits component is much larger than the cash salary component since Hong Kong offers the most expensive benefits package in terms of value in the region while Singapore offers the second highest.

“Depending on how the package is put together, the cost of providing benefits such as housing to employees sent to Hong Kong can be considerable, often dwarfing the cash salary element,” says Lee Quane, regional manager at ECA International Asia. “This is easy to see if benefits are taken out of the equation – when we compare only the net cash salary of an average middlemanager sent to Hong Kong, the city drops from fifth to 15th in our ranking. If tax levels in Hong Kong weren’t comparatively low, the costs to companies of posting staff here would spiral.”

The same holds true for Singapore, where the benefits component is typically the most expensive part of the expatriate package. The low cash salary component in both countries results from companies increasingly aligning the salary of expatriates to local market terms instead of home pay levels, says Quane.

“Although they may still provide benefits beyond what a local national would receive , such as assistance with children’s education costs, they are nevertheless more likely to offer a leaner benefits package overall.

There are a number of reasons for this but the main driver of this trend is the employment of expatriate staff on a permanent ‘one way’ basis rather than on a fixed length assignment.”

Still, it is still significantly cheaper to post expatriates to Singapore and Hong Kong than to Japan, which is still home to Asia’s highest expatriate packages, averaging US$379,000 due to high living costs and tax levels. Australia is in second place, followed by India, then China. Quane also encourages companies to take into account whether equity with the expatriate’s home country is more desirable; salary levels and typical benefits in both the home and host locations; and how generous the business needs to be in order to incentivise talent to accept an international posting.

SALARY SURVEY 2014 ACCOUNTING AND FINANCE

Salary (SG$’000)

years experience

3-5

5-10

10-15

more than 15 years

GENERAL Accounts Payable Accountant

45-60

60-80

Financial Accountant

50-65

65-100

Cost Accountant

50-65

65-80

Credit Analyst

50-65

65-90

Group Accountant - Consolidation

50-70

70-110

Financial/Business Analyst

50-80

80-100

Accounts Payable Manager

70-90

90-120

Finance Manager (Small/Medium Organisation)

80-100

90-120

120+

Finance Manager (Shared Services Centre)

80-100

100-120

120+

Finance Manager (Large Organisation)

100-130

130-180

180+

Credit Manager

80-100

100-130

130-150

Costing Manager

80-100

100-150

150+

Financial & Planning Analysis Manager

100-130

130-150

150-200

Financial Controller (Small/Medium Organisation)

130-150

150-180

180+

Financial Controller (Large Organisation)

160-200

200-250

250+

Credit Director

130-150

150-180

180-220

220+

Finance Director (Shared Services Centre)

200-220

220-250

250+

N/A

CFO/Finance Director (Large Organisation)

220-250

250-300

300-350

350+

Pricing Analyst

60-80

80-100

Treasury Analyst

60-80

80-100

Tax Analyst

60-80

80-110

Internal Auditor

65-90

90-130

Pricing Manager

100-120

120-150

150+

Revenue Recognition

80-120

120-180

180-250

Corporate Finance Manager

90-120

120-160

160+

Treasury Manager

100-120

120-180

180+

Internal Audit Manager

100-130

130-150

150-200

Tax Manager

130-160

160-200

200+

Corporate Finance Director

200-220

220-250

250-300

300+

Treasury Director

200-220

220-250

250-300

300+

Internal Audit Director

200-220

220-250

250-300

300+

Tax Director

200-220

220-250

250-300

300+

External Audit

50-70

70-120

120+

Tax

55-75

75-130

130+

Management Consultancy

90-140

140-180

180+

Corporate Finance

90-140

140-180

180+

Risk & Compliance

90-140

140-180

200+

SPECIALIST

PROFESSIONAL SERVICES & PUBLIC ACCOUNTING

R&D ENGINEERING/R&D years experience

2-5

Design Engineer

5-75

Application Engineer

5-10

45-90

Senior Design Engineer

70-100

Senior Application Engineer

80-110

28 SINGAPORE BUSINESS REVIEW | JULY 2014

180+ Salary (SG$’000) 8+

10+

15+

SALARY SURVEY 2014

R&D ENGINEERING/R&D

Salary (SG$’000)

years experience

2-5

5-10

8+

10+

15+

Engineering Director

150-250

PRODUCTION/MANUFACTURING ENGINEERING Production Engineer

50-80

Production Engineering Manager

100-140

PRODUCTION/MANUFACTURING ENGINEERING Production Engineer

50-80

Production Engineering Manager

100-140

QUALITY CONTROL/ASSURANCE Quality Engineer

40-75

Senior Quality Engineer

70-100

Quality Manager

80-150

Quality Director

150-250

SALES ENGINEERING Sales Engineer

40-80

Senior Sales Engineer

70-100

Sales Engineering Manager

100-150

PROJECT/PROGRAM MANAGEMENT Project Manager

70-100

Senior Project Manager

100-150

Project/Program Director

150-220

FINANCIAL SERVICES

Salary (SG$’000) Associate

Associate Vice President

Vice president

Director/MD

AUDIT Internal Audit

60-90

90-145

175-240

250+

IT Audit

60-90

90-145

175-240

250+

AML (Audit Money Laundering)

60-90

90-160

160-250

250+

MAS Compliance

60-90

90-160

160-250

250+

TTM (Transaction Trend Monitoring)

60-90

90-160

160-250

250+

Front Office Advisory

60-120

120-190

200-280

300+

Market Risk

60-90

100-120

120-250

250+

Credit Risk

60-90

100-120

120-250

250+

Operational Risk

60-90

85-130

170-240

250+

60-80

85-140

140-230

220+

50-180

80-120

120-200

200+

Settlement

45-65

65-120

130-200

200+

Corporate Actions

45-65

65-120

130-200

200+

Reconciliation

45-65

65-120

130-200

200+

Collateral Management

45-75

75-120

130-180

190+

Fund Administration

45-75

75-120

130-180

190+

Documentation

45-80

80-120

130-200

200+

COMPLIANCE

RISK

OPERATIONS Project Management MIDDLE OFFICE Client Servicing BACK OFFICE

SINGAPORE BUSINESS REVIEW | JULY 2014 29

SALARY SURVEY 2014 HEALTH & LIFE SCIENCE years experience

Salary (SG$’000) 3-5

5-10

10-15

more than 15 years

Drug Safety/Pharmacovigilence

45-55

55-80

90-150

N/A

Data Management

45-70

N/A

N/A

150+

Clinical Operations

50-70

70-90

100-120

N/A

BioStatistician

50-80

80-100

N/A

N/A

CLINICAL RESEARCH

SAS Programmer

50-80

80-100

N/A

N/A

110-130

120-180

180-250

300+

Manufacturing

50-70

70-90

100-160

200+

Process Engineering

60-80

90-120

120-150

180+

Mechanical Engineering

60-80

90-120

120-150

180+

Electrical Engineering

60-80

90-120

120-150

180+

Controls/Automation

60-80

90-120

120-150

180+

EHS

60-80

90-120

120-150

180+

Validation

60-80

90-120

120-150

180+

3-5

5-10

10-15

Payroll Specialist

45-65

65-100

100-130+

130+

Mobility Specialist

50-70

70-120

120-150+

150+

HRIS Specialist

50-85

85-130

130-150+

150+

Learning and Development Specialist

60-100

100-150

150-180

180+

Recruitment Specialist

60-100

100-150

140-180+

180+

HR Generalist/Business Partner

60-110

110-180

180-220+

220+

Organisational Development

60-110

110-200

200-250+

250+

Compensation and Benefits Specialist

60-120

120-200

200-250+

250+

N/A

N/A

250+

300+

Payroll Specialist

40-60

60-90

90-110+

110+

Mobility Specialist

50-65

65-100

100-130+

130+

HRIS Specialist

50-80

80-120

120-150+

150+

Learning and Development Specialist

55-90

90-135

135-165+

165+

Recruitment Specialist

55-90

90-135

135-165+

165+

HR Generalist/Business Partner

55-100

100-160

160-190

190+

Organisational Development

55-100

100-160

160-200

200+

Compensation and Benefits Specialist

60-120

120-180

180-250+

250+

220+

260+

Medical Affairs OPERATIONS

HUMAN RESOURCES years experience

Salary (SG$’000) more than 15 years

BANKING & FINANCE

Head of Human Resources COMMERCE & INDUSTRY

Head of Human Resources LAWYERS years experience

Salary (SG$’000) 3

3-5

5

4-7

8

PRIVATE PRACTICE (LOCAL FIRMS) Newly Qualified - 3 years PQE

65-110

4-7 years PQE

110-180

8 years PQE and above

180+

PRIVATE PRACTICE (INTERNATIONAL FIRMS) Newly Qualified - 3 years PQE 4-7 years PQE 30 SINGAPORE BUSINESS REVIEW | JULY 2014

90-180 180-280

SALARY SURVEY 2014

LAWYERS years experience

Salary (SG$’000)

3

3-5

5

4-7

8

8 years PQE and above

280+

Please note: The above table includes salary data collected from leading and international law firms.

IN-HOUSE CORPORATE (MNC) < 3 years PQE

60-110

4-7 years PQE

110-160

8 years PQE and above

160+

Please note: The above table includes salary data collected from Singapore private and listed companies, and multinational corporations.

FINANCIAL SERVICES < 3 years PQE

70-120

4-7 years PQE

120-180

8 years PQE and above

180+

Please note: The above table includes salary data collected from international/investment banks, local banks, insurance companies and fund/ private equity/security houses.

PARALEGALS & LEGAL SECRETARIES Paralegal

30-60

Corporate Secretariat Assistant

60+

CORPORATE SECRETARIAT Non ICSA-certified

70+

ICSA-certified

85+

Please note: The above table includes salary data collected from leading and international law firms.

OIL & GAS/PHARMACEUTICALS years experience

Salary (SG$’000) 3-5

5-10

10-15

Supply Chain

40-80

90-140

150-200

Quality

50-70

80-110

120-160

Distribution/Warehousing

50-70

80-130

150-180

Logistics/3PL

50-80

80-110

120-180

Direct

50-80

95-140

140-180

Quality

50-80

95-140

140-180

Planning

50-90

95-150

150-200

Indirect

50-90

100-150

160-220

LEAN/Six Sigma

50-90

100-150

160-220

Procurement & Supply Chain years experience

Salary (SG$’000) 3-5

5-10

10-15

Direct

40-70

80-120

130-180

Logistics/3PL

50-80

80-120

130-170

Supply Chain

50-80

80-130

150-220

Distribution/Warehousing

50-80

80-130

130-160

Planning

50-80

80-150

150-220

Indirect

50-80

90-140

160-220

LEAN/Six Sigma

60-90

100-150

160-220

Direct

50-70

80-120

130-180

Logistics/3PL

50-80

80-120

130-170

Supply Chain

50-80

80-130

150-220

Distribution/Warehousing

50-80

80-130

140-170

Planning

50-80

80-140

150-220

FMCG RETAIL

TECHNOLOGY

SINGAPORE BUSINESS REVIEW | JULY 2014 31

Singapore’s 10 largest mba providers preferred destination of foreign students due to reputation for quality education, a safe place to live, Asian exposure in an English speaking environment, multicultural environment and ability to mix with students from across the world. “Singapore is generally perceived as higher quality compared with regional peers in MBA offerings which helps to justify higher tuition fees,” he said.

JCU has 505 students taking its MBA programme costing $32,100 only. According to Chew, their total enrollment for 2013 grew over 50% compared to 2008.

Singapore unfazed by loss of top MBA programme The local industry is unfazed by recent relocation of a top-ranked MBA programme to Hong Kong.

T

here is no reason why Singapore’s MBA industry shouldn’t recover from what it seems like a broken wing when a top-ranked American executive MBA programme relocated to Hong Kong. The industry remains a preferred destination for many international students.

After opening in 2000 in Singapore, the University of Chicago Booth School of Business made headlines mid last year when it announced pulling out of its executive MBA to HK to get closer to China.

In an exclusive interview with William W. Kooser, associate dean for global outreach, he noted that while they were very successful in Singapore, they felt

32 SINGAPORE BUSINESS REVIEW | JULY 2014

Given regional proximity to China’s huge market, we can expect greater interests and relocation by these institutions from Singapore to Hong Kong.

that they could gain an even more diverse student body by moving their campus to Hong Kong. Its Hong Kong campus opened with a pioneering class of 180.

He clarifies though that they still maintain a presence in Singapore.

As such, he wanted to regard it as much an expansion of their footprint as it is a move.

Straits Times reports that the school will carry on teaching the 166 students enrolled in Singapore until 2015.

Minimal impact JCU Singapore associate director, student recruitment Andrew Chew commented that the move by Chicago Booth appears an isolated case and has minimal impact.

Singapore, he said, remains to be a

Opportunities Gan Li-Ling, senior executive, marketing & communications at PSB Academy, meanwhile found the relocation of such institutions opening opportunities. “Given regional proximity to China’s huge market, we can expect greater interests and relocation by these institutions from Singapore to Hong Kong. This will lend itself to market opportunities for other institutions based in Singapore to further grow and penetrate the market, “ said Gan. PSB Academy has 189 students enrolled in its MBA programmes – the University of Newcastle, Australia and the University of Nottingham, UK. Gan noted that there are still many other well-established institutions such as INSEAD, Yale, and Duke here leveraging Singapore as a spring board to reach out to neighbouring countries.

INSEAD, which opened its Asian campus in Singapore in 2010, has a total of 1,024 students enrolled in its fulltime MBA programme. This is a significant growth from its pioneering class of 53 students from 26 countries.

University at Buffalo EMBA

University of Birmingham MBA

The University of Nottingham, UK MBA

The University of Newcastle, Australia MBA

NUS Executive MBA

Ho Soon Eng

Evan Law

Bernard Yeung

NUS MBA a

Lim Bee Ing

Manchester Global MBA 238

66

295 692

295 Grand Total

189 50 225

50 Grand Total

175

Grand Total 175

123

123

66

397

800

159

800

451

Grand Total

a. NUS Executive MBA figures are joint Asia-Pacific Executive MBA and UCLA- NUS Executive MBA

SIM Global Education

PSB Academy

National University of Singapore (NUS) Business School

Manchester Business School

220

220

56

175

505

Murdoch University MBA

175

20

367

Grand Total

76 291

31

56

University of Hull EMBA

485

1024

260

188

Grand Total 56

29

31

5

6

128

399

Grand Total 24

12

52

335

TOTAL

12

52

335

Part time

Northumbria University MBA

Leon Choong

James Cook University MBA

JCU Singapore

Kaplan Higher Education Institute

Dale Anderson

INSEAD MBA

INSEAD

Ilian Mihov

University of Greenwich MBA

20

University of Wolverhampton MBA

Ong Han Boon

24

Queen Margaret University, UK MBA

104

Full time

Total number of students

25

Reinaldo Wong

Malick Sy

Head of Singapore Office

Cardiff Metropolitan University, UK MBA

Edinburgh Business School, Heriot Watt University, UK MBA

Arcadia University MBA (Penn State, USA) + Chartered Institute of Marketing (UK)

California State University MBA

Arcadia MBA

MBA PROGRAMME

ERC Institute

East Asia Institute of Management

Aventis School of Management

MBA PROVIDER

$28,762

$58,000

$32,100

$107,714

$23,800

$19,800

$24,650

$24,650

$28,650

Full time

$69,550

$31,009

$32,549

$95,000

$58,000

$60,640

$20,030

$19,902

$24,931

$32,100

$23,800

$19,800

$22,650

$22,650

$26,650

$33,000

$40,000

$28,000

Part time

Minimum Cost (in SGD)

15 to 18 months

1 year

1 year

1 year

Part time

2.5 years

16 months

15 months

24 months

1 year

12 months

21 months

24 months

24 months

15 months

17 months 24 months

1 year

10 months

18 months 18 months

12 months 12 months

12 months 12 months

12 months 12 months

15 to 18 months

Full time

Duration

1

4

5

3

1

1

2

2

2

2

3 intakes (full time) ; 2 intakes (part time)

2

3

4

4

4

4

1

1

3

No. of Intakes per year

Singaporeâ&#x20AC;&#x2122;s 10 largest MBA PROVIDERS

SINGAPORE BUSINESS REVIEW | JULY 2014 33

335

31 75

25 25 40 1024

15

800 220

120

Aventis School of Management

Aventis School of Management

East Asia Institute of Management

Auston Institute of Management

Ascensia Academy

East Asia Institute of Management

ESSEC Business School Asia Pacific

ESSEC Business School Asia Pacific

ESSEC Business School Asia Pacific

INSEAD

JCU Singapore

SAA Global Education Centre

Manchester Business School

Kaplan Higher Education Institute

Nanyang Business School - Nanyang Technological University (NTU)

Anglia Ruskin University MBA

Arcadia MBA

California State University MBA

Cardiff Metropolitan Universtity, UK MBA

Coventry University MBA

Edinburgh Business School, Heriot-Watt University, UK MBA (Chinese)

34 SINGAPORE BUSINESS REVIEW | JULY 2014

Edinburgh Business School, Heriot Watt University, UK MBA

ESSEC Executive MBA Asia-Pacific

ESSEC Global MBA

ESSEC-Mannheim Executive MBA

INSEAD MBAa

James Cook University MBA

Lancaster University Management School Global MBA

Manchester Global MBA

Murdoch University MBA

Nanyang MBA

505

128

15

52

103

Amity Global Business School

MBA PROGRAMME

TOTAL NO. OF STUDENTS

PROVIDER/LOCAL PARTNER

Chung Lai Hong

Leon Choong

Lim Bee Ing

Kenneth Choo

Dale Anderson

Ilian Mihovb

Herve Mathe

Herve Mathe

Herve Mathe

Reinaldo Wong

Chua Soh Kheng

Michael Lin

Reinaldo Wong

Malick Sy

Malick Sy

Easwaramoorthy Rangaswamy

Head of Singapore Office

80

485

1024

25

104

58

25

51

40

220

800

15

20

40

25

24

17

6

52

335

52

Full time Part time

Total number of students

$55,000

$32,100

$107,714c

$65,250

$28,650

$24,300

$19,000

$24,650

$15,000

Full time

$55,000

$20,030

$60,640

$34,026

$32,100

$85,000

$87,800

$26,650

$24,300

$19,000

$22,650

$40,000

$28,000

$15,000

Part time

Minimum Cost (in SGD)

12 months

1 year

10 months

12 months

15 to 18 months

18 to 32 months

16 months

2.5 years

24 months

1 year

18 months

1

66 days over 15 months

1

2

2

3

3 intakes (full time) 2 intakes (part time)

2

1

1

4

4

3

4

1

3

2

No. of Intakes per year

15 to 18 months

24 months

19 to 22.5 months

19 to 22.5 months 18 months

12 months

1 year

1 year

12 months

Part time

12 months

12 months

Full time

Duration

Singapore’s 30 largest MBA PROGRAMMES

295

397

29 20 182

123 50 100

291 175

National University of Singapore Business School

National University of Singapore Business School

East Asia Institute of Management

Rutgers Business School Asia Pacific

YMCA Education Centre

PSB Academy

PSB Academy

SIM Global Education

Ngee Ann-Adelaide Education Centre

SIM Global Education

ERC Institute

Kaplan Higher Education Institute

ERC Institute

Northumbria University MBA

NUS Executive MBAd

NUS MBA

Queen Margaret University, UK MBA

Rutgers Executive MBA

Strathclyde MBA

The University of Newcastle, Australia MBA

The University of Nottingham, UK MBA

University at Buffalo EMBA

University of Adelaide MBA

University of Birmingham MBA

University of Greenwhich MBA

University of Hull EMBA

University of Wolverhampton MBA

Ong Han Boon

Leon Choong

Ong Han Boon

Ho Soon Eng

Lim Mei Mei

Ho Soon Eng

Evan Law

Evan Law

Jay Tan

Zhang Yongwei

Reinaldo Wong

Bernard Yeung

Bernard Yeung

Leon Choong

Head of Singapore Office

20

260

66

24

238

Full time

56

175

31

175

100

50

123

182

20

5

159

295

56

Part time

Total number of students

$19,800

$23,800

$28,762

$24,650

$58,000

Full time

$19,800

$24,931

$23,800

$31,009

$32,000

$69,550

$32,549

$35,000

$75,000

$22,650

$58,000

$95,000

$19,902

Part time

Minimum Cost (in SGD)

12 months

18 months

12 months

12 months

17 months

Full time

12 months

24 months

18 months

24 months

2 years

21 months

24 months

2 years

14.5 months

12 months

24 months

15 months

15 months

Part time

Duration

a. It is impossible to generate INSEAD Singapore only numbers. INSEAD’s multi-campus structure enable its MBA students to exchange between campuses in Fontainebleau and Singapore. Each year, 70% of students participate in the exchange programme; and the number of MBA students in the Singapore campus will oscillate between 400 and 600 students at different time of the year. b. Ilian Mihov is the Dean of INSEAD globally but is based in Singapore c. The fee was converted from €62,500. d. NUS Exective MBA figures are joint Asia-Pacific Executive MBA and UCLA-NUS Executive MBA *Singapore Management University refused to provide their numbers but campaign materials state that the school maintains a class size of 100 *Survey period is from January to March 2014

76

175

66

56

Kaplan Higher Education Institute

MBA PROGRAMME

TOTAL NO. OF STUDENTS

PROVIDER/LOCAL PARTNER

4

2

3

4

3

1

5

3

2

1

4

1

1

2

No. of Intakes per year

Singapore’s 30 largest MBA PROGRAMMES

SINGAPORE BUSINESS REVIEW | JULY 2014 35

legal briefing

Should crowdfunding be regulated?

The lack of regulatory frameworks is limiting the flow of crowdfunding investments.

S

ingapore’s crowdfunding scene has been gaining steam as of late with more entrepreneurs braving the startup market, but that’s only the demand side of the equation. Supply, in the form of crowdfunding investors willing to back new projects, while also flourishing to an extent, has proceeded with more caution due to the absence of laws specifically governing crowdfunding. Legal experts argue that it is high time for the government to craft exemptions and regulations that clear up the clutter of legal ambiguities in the sector. Only then can it unleash its full growth potential.

What specific laws govern crowdfunding in Singapore?

Singapore currently lacks such laws, says Yap Wai Ming, partner at Stamford Law Corporation, but also notes that existing laws, under certain circumstances, can govern certain types of crowdfunding.

“Depending on the type of crowdfunding, for instance, donations-based, rewards-based, equity or debt crowdfunding, legislation in Singapore that could be applicable include the Personal Data Protection Act, Securities and Futures Act (SFA), Financial Advisers Act and various intellectual property legislations,” says Yap. What are the legal ambiguities in crowdfunding in Singapore?

Jonathan Kok, partner at RHT Law Taylor Wessing says the SFA will govern equity crowdfunding if an

“Without the legal clarity of an exemption, there are many inherent risks involved in offering an equity interest in your business through equity crowdfunding structures.” offer of securities is involved. But it is not clear which existing laws will apply to crowdfunding models that are not based on equity, but on donations, rewards or debts. Still, with no specific laws on crowdfunding, this has created a chilling effect on investors who are wary of providing capital without a legal safety net.

“While the lack of a legal framework regulating crowdfunding in Singapore has not stunted the growth of donations-based or rewards-based crowdfunding, equity-based crowdfunding platforms that provide investors with a stake in the investment in the form of securities have faced some resistance,” says Yap. He adds that the main resistance comes in the form of legal uncertainties as to whether the securities being offered to investors in exchange for their investments would fall under the ambit of the 36 SINGAPORE BUSINESS REVIEW | JULY 2014

Gareth Pyburn

Jonathan Kok

Yap Wai Ming

SFA and be subject to regulation by the Monetary Authority of Singapore.

Yap says Singapore is not alone in its dilemma: “Peer countries in Asia and jurisdictions worldwide are navigating the same uncertainties especially in respect of equity crowdfunding and securities regulation. Some are a little ahead of others and have rolled out either exemptions for crowdfunding within their existing regulatory framework or have crafted legislation specifically for crowdfunding.”

How can Singapore resolve the ambiguities and ensure clear regulatory treatment?

Yap says developing sound legislation on such a new – and still evolving – concept as crowdfunding takes time and preparation, but a top priority is for regulators to start proactive dialogues with the crowdfunding industry and legal professionals with a view to providing a workable regulatory framework for equity crowdfunding.

For Kok, creating a regulatory framework targeted at crowdfunding is urgent, but warns Singapore to take a cautionary look at how the United States implemented its JOBS Act in order to avoid a similar uphill battle. “Regulating crowdfunding is a fine balance – while the main objective is to help SMEs to raise funds more easily, regulators must also ensure that investors do not become victims of fraud and that crowdfunding intermediaries are properly regulated.”

How should entrepreneurs and investors operate until such ambiguities are cleared up?

Gareth Pyburn, managing director at InsightLegal Asia Consulting says it is always advisable to read the Terms and Conditions of any crowdfunding platform.

“Until Singapore provides clearer guidance or better legislation similar to the JOBS Act in the US, it would appear that startups are unable to offer securities, shares, or any other form of direct equity interest to the ‘public’ as part of any overt equity crowdfunding campaign targeting Singaporean investors.”

For entrepreneurs, erring on the side of caution is imperative when planning equity crowdfunding.

“Without the legal clarity of an exemption, there are many inherent risks involved in offering an equity interest in your business through equity crowdfunding structures. A successful reward-based crowdfunding campaign can be a great tool for sourcing potential customers, as well as marketing and building the public profile of a start-up company.

However, if your equity-based crowdfunding project will potentially involve any offer of ‘monetary rewards’ to the ‘public’, it is imperative that proper legal guidance is obtained before embarking on such campaign.”

co-published Corporate profile

PSB Academy banks on quality and pedigree Its programmes ready graduates for real-world challenges.

W

ho would have thought that a national productivity board would one day become one of Singapore’s largest and most prestigious educational institutions? PSB Academy, which has programmes included in the Top 20 of SBR’s Largest MBA Programmes Rankings, has that distinction.

PSB Academy’s roots can be traced to the Productivity Unit of the Economic Development of the Productivity and Standards Board of Singapore (PSB) back in 1964.“In 1972, a time when ‘productivity’ was the buzz word, the National Productivity Board (NPB) was established,” says PSB Academy CEO Evan Law. “With this development, the small Productivity Unit grew to become Management Services Supervisory Development Division under NPB, and was tasked to raise productivity levels in the workforce. This was the beginning of what we know today as PSB Academy,” he adds.

Today, PSB Academy has over 10,000 local and international students pursuing more than 60 academic programmes.

Award-winning faculty & programmes Law points out that the academy’s MBA programmes are taught by faculty members “who are leaders in their fields, who have been awarded national and international prizes for teaching, creativity, research and scholarship and have held visiting scholar positions at the world’s foremost institutions.”

“So students can be sure that their teachings are underpinned by worldclass research, unmatched knowledge,

PSB Academy campus facade

experience, and passion to approaching and solving real-world business problems,” he says.

He says their students receive holistic training, in turn gaining both academic achievement and successful careers. In addition to international faculty, PSB Academy also has over 600 academic staff to ensure academic and programme rigour.

The institution offers Master of Business Administration programmes from the United Kingdom’s University of Nottingham and Australia’s University of Newcastle, which ranked 13 and 19, respectively, in SBR’s Largest MBA Programmes Rankings.

University of Nottingham’s MBA programmes come in two tracks – general and finance. The General MBA covers all business disciplines and helps students focus on management areas that are relevant to their work and career.

The Nottingham Finance MBA, on the other hand, offers specialist modules in finance and accounting, in addition to covering key business disciplines. It is specially designed for people working in or aspiring to work in the financial services sector.

“The Nottingham MBA programmes aim to provide instruction in the creation, operation and management of business in

“Today, PSB Academy has over 10,000 local and international students pursuing more than 60 academic programmes.”

Evan Law, CEO, PSB Academy the private and public sectors,” Law says.

“Modules are carefully designed to develop skills in essential areas of management.”

Meanwhile, the Newcastle MBA looks into contemporary principles and standards of critical reasoning and management. It allows participants to work well in the international business community with cross-cultural sensitivity and awareness.

“The MBA programme is designed to provide students with a range of analytic, strategic and leadership skills which will prepare them for increasingly competitive careers in business management in the corporate and public sectors,” Law adds.

Success rate The PSB Academy CEO says the school’s programmes stress concepts and theories that allow students to deal with real-world scenarios. “Our classes are made up of students of different profiles so that this allows students to share varied perspectives and industry insights when they discuss case studies, projects and real life situations,” he says.

It is not surprising that its 2013 graduate and employment survey* showed that more than 94 percent of PSB Academy’s graduates were employed while 60 percent received a pay raise or promotion after their graduation.

Law says their “distinctive approach to the course structure responds directly to the results-oriented demands of today’s workplace while satisfying academic rigour.

Our aims are for our graduates to achieve both the confidence and competence to achieve the results in their personal and professional lives.” *commissioned and paid for by PSB Academy SINGAPORE BUSINESS REVIEW | JULY 2014 37

CIO Briefing Principal among those risks is the general unwillingness of cloud service providers to provide transparency.

The breakthrough (and heartbreak) of cloud The disruptive technology delivers productivity leaps and operational headaches.

C

loud computing may be the future of business, enabling advantageous economies of scale by moving critical information and programs to the Internet instead of storing and accessing them on a physical server, but not everyone is keen to take this next big leap forward.

Because, while cloud computing promises immense rewards to adopters, it may also expose them to increased risks mainly in data security, according to industry analysts.

Agility and efficiency Cloud computing has risen to prominence for providing organizations heightened agility and efficiency. “CEOs are attracted to the flexibility and ability of cloud to quickly respond to changing customer needs,” says Tan Shong Ye, IT Risk and Cybersecurity Leader, PwC Singapore.

Tan cites PwC’s 17th Annual Global CEO Survey which revealed 90% of CEOs plan to change their technology investments in an attempt to become more agile and create innovative new business models around the cloud. This allows any enterprise to enhance time to market and productivity, unlock operational efficiencies through the use of shared on-demand services, reduce costs, and increase customer engagement “Cloud computing allows organizations the ability to quickly leverage capabilities that would be more expensive and difficult to create on their own.

Instead of acquiring fixed assets, companies pay for the services they need, when they need them. The economies of scale within cloud providers allow better utilization of technology assets,” says Tan. By gaining efficiencies through cloud computing, businesses will be able to free up valuable IT 38 SINGAPORE BUSINESS REVIEW | JULY 2014

CEOs are attracted to the flexibility and ability of cloud to quickly respond to changing customer needs.

resources and redirect them to new initiatives instead of maintaining existing systems and applications, he adds. Despite the palpable advantages of cloud computing, many enterprises hold back from using the technology because of steep barriers to adoption, says Bruce Dahlgren, senior vice president Enterprise Services, HP Asia Pacific and Japan.

He cites HP research which found 59 percent of enterprises are concerned about vendor lock in. Also, more than two thirds of respondents say security concerns are a significant barrier to adoption. Meanwhile, 62 percent of those polled said that finding the right strategic partner to get them started was a barrier to cloud adoption.

These survey data suggest that enterprises are approaching cloud computing with a high level of caution – and they are right to do so given the mission-critical applications and processes that they will be moving to the cloud.

Real and imagined risks As with any new technology, cloud computing comes with real risks. But analysts warn that businesses may be overestimating the dangers, or worse, focusing on the wrong drawbacks altogether.

“Lack of transparency, uncertain regulatory landscape, security concerns, loss of control, and other factors can hinder adoption,” says Lenny Levy, Director at PwC, Singapore. “While many of the concerns are unfounded, risks do exist.”

One real risk in cloud computing is how benefits derived by cloud can quickly evaporate in the event of a security breach. Another risk is haphazardly jumping into the cloud computing bandwagon without a clear and nimble cloud strategy that easily adjusts to regulatory changes. “While it is true the cloud provides today’s businesses with exciting opportunities for productivity gains and significant savings, its very nature also brings with it significant risk,” says Mark Silver, Global Project Lead Information Security, Invensys Rail Integration Project, Siemens.

“Principal among those risks is the general unwillingness of cloud service providers to provide transparency into their operations and security maturity, leaving the customer in a quandary as to the security status of their own information and whether it is truly confidential,” he says. Businesses are often left in the dark when it comes to cloud vulnerabilities which can be exploited by hackers to gain access to client information. It will often be too late before businesses are alerted that their data has been compromised, if they ever are.

SPECIAL FEATuRE: MICE REPORT

Asia’s MICE industry thrives in 2014

Find out what Suntec Singapore and Pattaya Exhibition and Convention Hall can offer as a one-stop convention solution.

T

he MICE calendar for 2014 is packed with major biennial conferences and well attended shows. Analysts believe that a strong pipeline of corporate events will be catalysts for more MICE corporate travel in 2014 compared to the previous year. For instance, in Singapore, the ongoing Food & Hotel Asia and Singapore Air Show are keeping hotels and conference venues fully booked. One venue that proves to be at the forefront of the MICE industry is Suntec Singapore.

A glowing re-opening year The 12 months since Suntec Singapore’s big reopening have signalled a strong return to the market after the convention and exhibition centre undertook a yearlong, SGD 184 million modernisation programme. Since it reopened on 3rd June 2013, the Centre has hosted over 750 events and greeted over 3 million visitors.

“Our goal was to create a venue that would stay at the forefront of the MICE industry well into the next decade.” shared Suntec Singapore’s Chief Executive Officer, Arun Madhok.

Suntec Singapore’s integration of cutting edge technology with efficient and impeccable service creates an overall customer experience that makes it the preferred place to meet. Major environmentally friendly upgrades were also included in the modernisation programme to set a standard that will still be a benchmark for years to come.

Extensive and versatile LED Lighting, including programmable lights, also enable organisers to adjust the environment of their event on the fly.

Free, high-speed WiFi that has been

designed to meet the needs of 6,000 simultaneous users has enabled Suntec Singapore to attract and impress high-tech events such as Cloud Asia.

The Big Picture, the world’s largest HD video wall, welcomes visitors to Suntec Singapore and adds valuable visibility for the Centre’s clients. Digital signages throughout the Centre automatically update the activity in each room, and help complex events such as IFLA’s World Library and Information Congress, which require a high degree of flexibility of conference space, for 3,980 delegates from 122 countries.

Several multi-year contracts with major international events capped off of a brisk year for the MICE venue. “We are delighted to be the venue of choice for so many long-term partners.” explains Mr Madhok, “We’ve recently extended our relationship with IDEM, the number one dental event in the Asia Pacific Region, for another two shows in 2016 and 2018. We have also closed a three-year deal with JEC Group, the world’s largest

“Since it reopened on 3rd June 2013, the Centre has hosted over 750 events and greeted over 3 million visitors.”

Suntec Singapore Level 1 driveway

40 SINGAPORE BUSINESS REVIEW | JULY 2014

organisation dedicated to the promotion of the composites industry. We’ve hosted JEC Asia since 2008 and we are happy to see a client grow their event with us through the years,” he adds.

While Suntec proves to be one of the go-to places for MICE events in Singapore, Pattaya Exhibition and Convention Hall bills

SPECIAL FEATuRE: MICE REPORT

PEACH facade

itself as the one-stop convention solution for conferences outside of Bangkok, Thailand.

PEACH sustains foothold in Thailand’s MICE industry For 15 years and running, Pattaya Exhibition and Convention Hall has been offering an ideal location, modern facilities and professional services that cater to a wide variety of events from wedding banquets to international conferences.

With 53 different meeting venues measuring over 23,500 square metres and capable of seating from 10 to 10,062 delegates, PEACH allows organizers the opportunity to achieve serious business solutions within a self-sufficient environment.

Just two hours from Bangkok, 75 minutes from the International Suvarnabhumi Airport, and 40 minutes from the soon-refurbished U-tapao Pattaya

International Airport, PEACH is easily accessible to delegates. It also boasts of two fully licensed helicopter pads for guests who wish to arrive by helicopter.

Vitanart Vathanakul, executive director at PEACH, says they aim to deliver personalized and professional services at all times with value-added choices in product and facility. “We position ourselves in ensuring that innovative and creative ideas are augmented and that we are flexible and accommodating to the current trends and needs,” he adds. To make this happen, PEACH has a dedicated team of professional conference and incentive specialists to assist with every conference need.

Delegates attending conferences at PEACH need not worry about their accommodation as PEACH is located on a private estate with four five-star hotels, providing delegates with about 5,000 rooms to pick from.

Whatever accommodation the delegate chooses, PEACH houses experienced chefs from the Royal Cliffs Hotel Group, offering to everyone menus that feature the freshest of local and regional produce.

An impressive range of restaurants features cuisines from all over the world, allowing the guests a taste of everything in just one location.

Recreation is also at its finest at PEACH, with 2 private beaches, the Lotus Pond garden, picturesque tropical terraces, numerous poolside settings and ballrooms.

Tropical islands, temples, entertainment, shopping and theme parks are also short drive away from the convention center.

Security is not a problem, as the Royal Cliffs Hotel Group has over 100 professional security personnel patrolling the premises on a 24-hour basis. CCTVs surround the area, and vehicle entry points are always manned and gated.

Endorsed as a ‘green’ venue by The Best Green Hotels of USA, PEACH carefully adheres to environmental standards while faithfully living up to its five-star brand.

“Just 75 minutes from the International Suvarnabhumi Airport, PEACH is easily accessible to delegates.”

SINGAPORE BUSINESS REVIEW | JULY 2014 41

event coverage: Startups 2014

SBR editor Tim Charlton moderates the discussion with the panelists

What every entrepreneur needs to know about the local startup scene The Singapore start-up scene is on the fastest of fast lanes, attracting six times more venture capital investment in 2013.

S

ingapore might be one of the safest countries in the world, but that does not mean its entire citizenry is completely allergic to risk. In fact, the island is seeing an explosion of entrepreneurs bent on pursuing their passions and propelling their dream projects. Knowing full well that a failed startup could send their bank accounts and careers crashing to the ground, these founders are in desperate need of expert guidance to help steer them to high growth and profits -or at the very least, prevent their drive from sputtering out.

This led Singapore Business Review to hold a luncheon briefing as a follow-up to the successful 20 hottest start-up to watch in 2014 list published in the recent February-March issue. The briefing, which took place at Intercontinental Singapore on April 16, was attended by more than 42 SINGAPORE BUSINESS REVIEW | JULY 2014

“Venture capital invested in Singaporean tech firms by funds last year totalled $1.7 billion.”

120 guests; mostly startup founders, lawyers, investors and venture capitalists.

Below is a summary of the fundamental information every Singapore entrepreneur needs to know to successfully navigate the local start-up environment.

First things first The Singapore startup scene is on the fastest of fast lanes. As cited by Gilcrux Holdings founder John Fearon, “the country’s technology sector attracted venture capital worth $1.71 billion [in 2013].” That is six times more than the level seen in 2011, Fearon notes. It doesn’t get more high-growth than that.

Tech startups are in an especially exciting position to take advantage of the fast growing startup scene in Singapore. “Venture capital invested in Singaporean tech firms by funds

last year totalled $1.7 billion. While that is behind China’s $3.46 billion, it is ahead of Japan, South Korea and Hong Kong,” notes Marcus Chow, partner at ATMD Bird & Bird. The number of successful startups and cash-loaded exits (worth SGD600 million in 2013, according to Fearon) is only beginning to grow.

So far, we’ve used monetary value as the key measure in sizing up the startup scene’s value. Often, this will also be the measure for an individual startup’s success. However, before even considering the question of (more) capital funding, any aspiring start-up first has to understand what it takes to build a decent organisation from scratch. After all, you have to have something going already before you pitch to any investor – it just makes the business seem a safer investment. Industry experts share their insights on the focal points of a

event coverage: Startups 2014 care about how you will make them money – and that means presenting your business model, your financing proposition, and your exit plan, not your tech.”

start-up’s early years.

Adelina Peltea, VP of Marketing at TradeGecko, explains that the first years of a start-up is vastly different from when it becomes more mature: “The life cycle of a startup takes its team to very steep learning curves and changes, especially in the first years.” One area that startups need to pay attention to is the nature of hiring in the early years, and how it differs from the rest of the startup’s life. “In the beginning, generalists that can handle risk and lack of structure are needed. Later, as the startup passes the product-market fit stage and clarifies what are the best actions to be taken, the hiring starts being directed at people with specific skills sets, specialists, as well as experienced managers.”

Besides paying attention to hiring strategies, Peltea also emphasises how the nature of marketing changes over time. Contrary to popular belief, marketing is not necessarily the end-all-end-all, and it may have to take the back seat in place of other priorities. “In the beginning, startups should not invest in marketing, but rather in getting an appealing product people would pay for, sales through the network and support sometimes.”

Cole Sirucek, co-founder and chairman at DocDoc, puts the focus on team-building and why it’s important. “The key is not to try and develop or hire well-rounded people but to build well-rounded teams.

A key to building winning teams is about finding folks with complementary skills and aligning interests in the context of shared outcomes.” Sirucek

puts this in the context of leadership changes, which is not uncommon among startups. At the least, management teams of startup companies can continue on in spite of leadership changes if the team’s DNA is intact, as Sirucek suggests.

Adapting to a technological environment is also key to succeeding as a startup company. This is especially important in light of how consumers are increasingly becoming more mobile, and adopting mobile technology.

Alexia Sichere, founder and managing director at Foxysales reveals that “at least 40% of the e-commerce website traffic comes from mobiles and tablets. Thus, having a mobile strategy is a must.”

Though there are many areas of the business that a startup has to pay attention to, the question of funding often takes precedence as the most important question. It’s true that Singapore’s venture capital environment is robustly growing, and that there are bound to be many times more opportunities for venture funding than ever before. However, that obviously doesn’t mean looser standards on the part of investors. Successfully traversing the scene for capital entails keeping a few key points in mind.

Above everything else, startups need to assume the right mindset when pitching to potential investors.

And what’s the right mindset? According to Eric Tachibana, founder and managing director at eXtropia Holdings, “most entrepreneurs fail because they pitch their products, not investor value. Investors don’t care about your products or how you will change the world. They

“For the expansion stage (upwards of SGD200,000), the founders should make contacts through introduction to reach general partners of venture capitalist firms.”

Other keys to success Keep in mind as well that different strategies have to be adopted depending on the life stage of the startup, as well as the nature of the potential investor. Jack Wang, CFA, CA partner at Lexico, explains the difference.

“For early stages (SGD10,000SGD200,000), angel investors or personal high net worth individuals are excellent investors with empathy for the entrepreneurial journey and risk tolerance of a likely failure. For the expansion stage (upwards of SGD200,000), the founders should make contacts through introduction to reach general partners of venture capitalist firms.”

Start-ups also have to be ready for what happens after funding is secured. Jack Wang, CFA, CA partner at Lexico, explains why a higher bar of responsibility should be met once more funding is secured. “Funding introduces another layer of complexity to the start-up. The more equity you give up, the incentive and the drive for success will decrease as your risks and potential reward go down in tandem.”

We mentioned earlier that tech start-ups have the widest window of opportunity, and this is true because most if not all aspects of the market have to do with technology. “Smart phones already dominate the mobile phone market in Singapore. They will eventually dominate the mobile phone market in Southeast Asia,” says Chia Ling Koh, partner at ATMD Bird & Bird. It’s not a surprise either that this is the case since most of us have work and personal lives largely facilitated by our smart phones.

Nicole Fall, CEO at Asian Consumer Intelligence, explains how technology trends are most apparent in Singapore’s changing consumer culture. “Emergent trends in retail focus on the understanding [that] some consumers are fatigued by consumerism and seek new experiences that move away from “same-same” shopping environments.”

SINGAPORE BUSINESS REVIEW | JULY 2014 43

co-published Corporate profile

Right time for the right broker

Find out why 2014 is the best time for you to enter Forex.

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efore approaching to its midpoint, the year of 2014 has already demonstrated an intense economic and political activity worldwide. While some countries are still trying to get through the crisis aftermath; the others are struggling to take control of inflation and GDP playing with the interest rates; still others struggle for the world supremacy. All that cannot but affect the exchange rates, which sometimes lag behind the events, but sometimes anticipate them. Most of analysts and experts are of the opinion that 2014 is going to be a bumpy ride for currencies, or, speaking in professional parlance, it will be a year of volatility. The Fed will continue winding down the stimulus measures; the ECB is likely to cut the benchmark interest rate bringing it into negative territory. Meanwhile, the emerging markets are expected to take drastic action to maintain the economic growth. That guarantees pretty lively and rich year to be continued in terms of speculative maneuvers for the forex market.

In case you are about to take a stab at Forex, now is the high time for you to hit the road. You still have time to give demo trading a try, to learn a trading platform, and then to change over to cent account and learn various trading strategies so that to strike out for trading on real accounts dealing with real money.

Being well-grounded and coolheaded is all you need to generate even higher income than ever.

However, entering the market is easy, but finding a broker perfect for you is a true challenge. In 2014, the number of brokers rendering their services on the market almost hit the ceiling. To date, there are more than 2,000 forex brokers of all hues; the lion’s share of them is run-of-the-mill. So, it is vitally important to choose the right, big, and acknowledged broker like InstaForex.

Choosing a brokerage in 2014 has nothing to do with student start-up or investing into unknown Twitter in 2009.

The rules are quite clear. A broker should be big and have a large customer base with offices around the world. Besides, a

broker should work on the market for at least five years.

At first encounter with a broker ignore its jazzy website, but focus on the company’s prize pool, annual turnover of clients’ funds, internet presence, pagerank, headquarters office, and staff headcount. InstaForex, who has been working on the market for more

“Choosing a brokerage in 2014 has nothing to do with student start-up or investing into unknown Twitter in 2009. The rules are quite clear. A broker should be big and have a large customer base with offices around the world.

Besides, a broker should work on the market for at least five years.”

than 9 years, is in the top 10 of the world’s leading brokers. The client base exceeded one million traders last year, while the annual prize pool goes beyond $500,000.

There are 200 InstaForex offices worldwide – from Indonesia and Malaysia to Germany and Latvia. InstaForex stands out from other brokers as it keeps developing trading technologies to provide its clients with up-to-the-minute and exclusive products and services.

But what is more important is that InstaForex guarantees high reliability and quality of its services ensuring safe trading conditions with no risk for the clients’ funds. Today InstaForex team comprises more than 1,000 various specialists, who have been working for the company for years to tailor it to the needs of each customer. Grab your chance to enter Forex in 2014 and be among InstaForex clients. Now is the best time to join the best broker.

SINGAPORE BUSINESS REVIEW | JULY 2014 45

REGIONAL economy briefing: indonesia

Manufacturing decline is one of the major concerns

What’s haunting Indonesia’s economic growth?

With the oil trade balance dilemma, excessive fuel subsidies and burgeoning external debt,the next government has a lot of work to do.

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he winner in Indonesia’s presidential elections will be facing a number of crucial reforms and policies that need to be implemented to ensure economic growth in the world’s third biggest democracy. Gundy Cahyadi of DBS Group Research says three factors need attention from the next government: persistent deficit in the oil and gas trade balance; excessive fuel subsidies; and the decline of manufacturing.

Cahyadi says the main factor behind Indonesia’s gaping current account deficit since the second quarter of 2012 is the problem in the oil trade balance.

Consumption continues to rise among millions of Indonesians, yet the daily production of crude oil has been in gradual decline over the past decade. As a result,

46 SINGAPORE BUSINESS REVIEW | JULY 2014

A cut in fuel subsidies would help lower consumption, which has caused the deficit in the oil and gas balance to reach $9.7 billion in 2013.

net imports of refined oil have continued to grow as the consumer base expands.

“Higher production of oil, both crude and refined, will take time to bring about. More investment in oil and gas is needed, and lags abound. Moreover, the oil and gas sector is still heavily regulated.

Bureaucracy and inefficiency of the regulators are partly behind the falls in production. Re-negotiation of existing oil and gas concessions as well as exploration contracts is something that markets will be watching very closely,” he says.

Excessive fuel subsidies, which has been eating 25 to 30% of the government budget for the past three to five years, is also a problem. On average, the subsidies went beyond their targets by about 60% from 2011 to 2013. Had fuel prices not been

raised by 45% in June last year, overshooting would have been worse. Cahyadi says a cut in fuel subsidies would help lower consumption, which has caused the deficit in the oil and gas balance to reach $9.7 billion in 2013, accounting for 35% of the overall current account deficit.

This is a huge number compared to the amount spent on development spending, including infrastructure, which only made up 10 to 15% of the total fiscal spending. Infrastructure issues remain as top concerns for Indonesia’s potential investors, and bottlenecks don’t help the country’s case.

The decline in the country’s manufacturing over the past decade is also a concern.

“There is a need to re-energize the manufacturing sector and to re-diversify away from commodities,” he says, adding that while the share of mining in gross domestic product has been on the rise since 2004, the share of non-oil manufacturing has been falling since 2001.

Michael Spencer, Deutsche Bank’s chief economist, says

REGIONAL economy briefing: indonesia the Indonesian economic outlook has been favourable for the past few months, with inflation easing, strong domestic consumption demand, trade balances stabilizing and exchange rate appreciation.

However, even though these feelgood data will likely persist for the time being, downside risks still exist.

What challenges will the new government face?

The trade balance could worsen in the coming months if export growth remains subdued while imports rebound. Other factors include demand pull inflation, especially of food, worsening of the fiscal balance in the absence of fuel price adjustment, turmoil in the global financial market which causes a shortage of dollar liquidity, and a series of populist measures which may prove unfriendly for investors.

“Some of these factors manifested last year; we don’t think the risk of a recurrence this year is trivial,” Spencer says. External debt is also seen as a problem. While the public sector exposure seems manageable, the pace at which external private sector leverage has risen is worrisome.

“In just four years, the private sector’s exposure to short-term external debt has doubled to over $40 billion. To put this in perspective, note that the amount is roughly twice that of the projected current account deficit for 2014,” Spencer says.

According to Alicia GarciaHerrero, chief economist for emerging markets with BBVA Research, Indonesia’s economic growth faces a ‘soft landing’ in the wake of the recent aggressive monetary tightening to stem high inflation and a deteriorating external balance. The Bank of Indonesia hiked policy rates by 175 bps in 2013, and appropriately so.

Moreover, in its bid to contain the fiscal deficit below 2.5% of gross domestic product and augment macro stability, the government has cut public spending and initiated fuel subsidy reforms.

“Given a limited monetary and fiscal space, kick-starting growth requires the next government to expedite structural reforms, which have been fraught with bureaucratic delays. These include removing infrastructure bottlenecks, tackling land acquisition issues, liberalizing trade and investment policies and enhancing labour productivity through skill development. On the fiscal front, measures to boost tax revenue and cut wasteful expenditure through further fuel subsidy reforms are key,” GarciaHerrero says.

What are the prospects for FDI? To ease external funding concerns, Cahyadi says the government should attract more foreign direct investment (FDI). Indonesia’s FDI reached a record $28.6 billion in 2013, but the current government has previously noted the potential of Indonesia attracting up to $35 to 40 billion in FDI per year. An increase in the amount of FDI could be channelled into easing various constraints the economy, he says.

Infrastructure works are important, and apart from the proposed liberalization of airports and seaports, there are also talks on the possible revision of foreign ownership limits, especially in the construction sector. Foreign ownership is currently limited to 67%.

“Further liberalization of these key sectors has been eagerly awaited but progress has been slow.

In 2013, plans were made public to open up power plants as well as airports and ferry terminals to foreign investors. These changes have not been formalized and it remains to be seen if the new government will continue to push for this to happen,” Cahyadi says.

What does the presidential frontrunner have in store?

The future of Indonesia is likely in the hands of Jakarta governor Joko Widodo of the Indonesian Democractic Party of Struggle (PDI-P), who is currently leading

In just four years, the private sector’s exposure to short-term external debt has doubled to over $40 billion.

the poll surveys as of the time of writing. If he wins, Jokowi, as he is known, faces the responsibility of leading a fractured parliament to implement a big wave of structural reforms. “We think Jokowi’s track record looks encouraging, by and large – but a quick panacea for Indonesia’s macro rebalancing process is unlikely. The tangible impact from any reform agenda is likely a story for 2015 (or at best late 2014),” says Hozefa Topiwalla, a Morgan Stanley Research analyst.

In his two terms as mayor of Solo from 2005 to 2012, Jokowi adopted a style of engaging in policy dialogue with the grassroots, making significant progress on many fronts. He is also perceived to be collaborative and approachable. Topiwalla adds that he also has a distinct hands-on approach with his “Blusukan” or impromptu visits to government offices and poorer districts as he gets in touch with everyday concerns on food prices, housing and transportation.

Jokowi has also taken steps to improve the investment climate, by creating a one-stop shop, reduced bureaucratic procedures, better fiscal resource management and budget transparency. He helped propel Solo into becoming a World Heritage City in 2006, which gave a boost to tourism. Aside from this, he also made reforms in infrastructure connectivity and healthcare. He replicated his reforms when he became governor of Jakarta.

Outstanding private sector external debt

Source: Bank Indonesia, Deutsche Bank. End-year data.

SINGAPORE BUSINESS REVIEW | JULY 2014 47

event coverage: NETEVENTS Global summit

Only 4% of enterprises turned to or are planning to turn to telcos in the next 12 months

Reality Check: Can the telcos grab their spot in the cloud services market?

See why telcos are serious contenders for providing secure cloud services.

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he serene vista overlooking the Mountain Winery in Saratoga, California was a sharp contrast to the fierce debates during the two-day NetEvents Cloud Innovation Summit held last March.

Leading industry analysts and executives shared their viewpoints on the latest hot topics on innovation in the cloud space, which in recent years has grown exponentially as more enterprises look to moving their critical business and IT applications to the cloud for increased speed and responsiveness.

One session in particular asked the question: “Can Telcos Grab Their Share of a Cloud Services Market?” and discussed the emergence of telecommunications companies or telcos as cloud service providers.

Unique advantage During the session, analysts agreed 48 SINGAPORE BUSINESS REVIEW | JULY 2014

“Telcos need to help transition enterprises into thinking of cloud as a strategic resource instead of a tactical one.”

that telcos possess one unique advantage over other cloud service providers: they own networks. But so far telcos have lagged in leveraging on that advantage. “I think that telcos, the one thing they have is they own networks. And cloud is inherently a network-based solution. So who thinks that telcos or network-owning operators are therefore ideally positioned to be cloud service providers?” asked Jeremiah Caron, Senior Vice President, Analysis at Current Analysis and the moderator for the session, of the throng of attendees.

When only a few hands rose in agreement, Caron said the informal crowd poll mirrored the current market sentiment where telcos hardly even register among enterprises as cloud service providers. A Current Analysis poll last year revealed only 4% of enterprises have turned to or are planning to turn to telcos in the

next 12 months for infrastructure as a service and 2% for platform as a service. The poll interviewed 700 enterprises globally with representatives from each region.

But Caron said telcos have a strong potential to further grow their market share in the coming years. “As the applications that businesses move to the cloud become more sophisticated, more mission-critical, the value of telcos will rise and I think this year’s results will be higher,” said Caron. Infrastructure as a service is especially a lucrative market for telcos looking to expand their share of the growing cloud services pie.

But in order to secure more clients in this space, Caron said telcos need to help transition enterprises into thinking of cloud as a strategic resource instead of a tactical one.

“When it becomes more strategic, that’s when I think the opportunity

event coverage: NETEVENTS Global summit becomes more relevant to telcos and their advantage.”

Caron encouraged telcos – or network-owning operators, as he likes to call them – to tap into the emerging markets, where there is rising demand for cloud services among mid-sized businesses with web-centric apps. These enterprises, he said, are now spending heavily on mission-critical cloud apps and telcos can move in to serve their needs better than their non-network-owning rivals.

Enterprises’ needs Foremost among these needs is security, said Caron, while citing results of the surveys conducted by Current Analysis. Enterprises also highly value price and availability when choosing their cloud service providers. “You think: ‘Wow, networkowning operators really should have an advantage,’” said Caron.

He said enterprises and businesses want to ensure impeccable security before they agree to move a greater percentage of their IT to the cloud, and telcos are ideal for providing that high level of protection. “Who is there providing a clean Internet that is not contaminated with security risk? It’s the service providers, the guys who provide pipes for the end users. And hence, they are in a very good position to deliver service knowing full well that the security breach is mainly coming from networking,” said Dr. Hongwen Zhang, Co-Founder and Chief Executive Officer at Wedge Networks.

He added that as the next wave of security innovations roll in, telcos will be able to more quickly roll out services handling new security outbreaks, making them more attractive for enterprises for which data breach defence is a top priority. “The experts in building highly secure reliable networks ultimately are the carriers.

And that is their ultimate weapon,” concurred Jeff Schmitz, Chairman of CloudEthernet Forum.

“As more critical applications for those enterprises migrate to the cloud they’re going to look for their trusted partners who have reliable secure networks to place those on where they can feel comfortable as

they transition those applications,” he added.

Familiarity is also a big strength for telcos in their bid to become the preferred cloud service providers. They sell not just services, but a lot of equipment to the enterprise customers. You can’t discount those longstanding relationships.”

Avoid the Amazon trap But Caron warned that despite the great potential for telcos to move into the cloud services market, there are also substantial risks. Telcos may be tempted to copy Amazon’s model, and this would be a poor decision.

“You can’t do what Amazon does, nor should you,” said Caron. “The pricing isn’t right. The profit margin won’t be there.”

Instead, telcos should focus on their network expertise. They need to keep reminding enterprises that what they offer in spades is a strong network that keeps threats managed and data secure.

Telco operators have been building out a stronger network fabric in order to deliver the kind of cloud carrier services that enterprises are clamouring for, said Kevin Vachon, Chief Operating Officer at MEF. Vachon points to how SDN will make Ethernet services more manageable and lower operating expenses, and also how NFV will make Ethernet services more dynamic. “If the operators follow that roadmap they will have the fabric in place to take advantage of new capabilities to be successful as a cloud carrier,” he said.

Vachon said major operators are already making moves towards this direction. AT&T, for example, has stated that it is going to migrate from TDM by 2020, and has caused a ripple effect in the industry. “A lot of the service providers that I talk to are interconnecting with those guys, that’s raising the sense of urgency to move to this more modern capability sooner than later.”

But Vachon said there is still some reluctance among some operators to fully invest in upgrading to these dynamic network capabilities. Part of the reason is lingering doubt on the potential profits related to such

Jeremiah Caron

Hongwen Zhang

Jeffrey Schmitz

Kevin Vachon

service upgrades, shown in a conversation Vachon’s colleague had with a mid-tier international operator. “The operator said ‘I don’t want to build those things because I don’t know how to monetise them. I don’t want to give necessarily to my enterprise customers more ability to get bandwidth on demand and to be able to do this and do that because I’ve got to put fibre on the ground and that costs me money. And I don’t necessarily want to reduce the contract length from three to two years to one year and to be able to give people bandwidth whenever they want because I’m just not sure I can make money on that,’” recounted Vachon.

The fact that telcos are currently selling commodity services is what is limiting their ability to expand into cloud services, argues Zhang. “In the telco world, there’s an ever increasing chance that people are just leaving from one service provider to another service provider. The other, the cutthroat pricing are reducing ARPU. And that’s the only way for them to get out is offering new services,” he said. Differentiation will be a key to the success of telcos as cloud service providers, “and it’s going to be up to them if they find a way to do that,” said Zhang.

Keynote Q&A Michael Howard, Infonetics Research; and Martin Casado, VMWare

SINGAPORE BUSINESS REVIEW | JULY 2014 49

co-published Corporate profile

Check out how Earth Arts is marrying mother nature to the modern metropolis From humble beginnings in a small shop with only five staff members, Earth Arts now proudly occupies a 50,000-square foot warehouse, office and showroom.

8 Napier Company incentive trip to Japan in 2013

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mongst the heavy industrial sites and vehicle scrap-yards of one of Singapore’s lesser known suburbs, Sungei Kadut, is a business that has created some of the nation’s most famous facades and been integral partners in award-winning architectural triumphs.

Singapore Business Review readers would not necessarily know it at the time but they have walked-on, walked past and admired home grown design business Earth Arts’ work in many of the CBD’s office towers, Dhoby Ghaut MRT station, City Link Mall, SMU, NUS to name just a few. Clean, attractive, modernist but showing a high respect for nature and eco-sensitivity, Earth Arts’ features are the pinnacle in sophisticated stone masonry.

Such historic and significant projects have propelled the business from strength to strength. A joint business venture managed by Celine Teh, Earth Arts’ growth has paralleled Singapore’s tremendous architectural coming of age. Executive Director Thomas Tan describes, “From humble beginnings in a small shop in Katong Shopping Centre, with five staff, we have overcome difficult times and now proudly occupy a 50,000-square foot warehouse, office and showroom facility in Sungei Kadut.”

One hundred staff members now 50 SINGAPORE BUSINESS REVIEW | JULY 2014

produce approximately $25 million in turnover, ten-fold that of the company’s first year in business in 1996. Despite the Global Financial Crisis, Earth Arts’ best years have been the last five, the largest factor driving the company’s expansion being the capturing of projects such as Marina Bay Financial Centre and the greatest feather in the cap, Changi Airport Terminal 3. But securing major projects is only one factor in success.

“Singapore needed a one-stop complete service centre, from design to interaction with architects and interior designers right down to supply and installation. We have achieved that,” says Tan. Master craftsmen are part highly-skilled tradesmen and part artists. They need to be valued. Tan suggests that a further reason for Earth Arts’ rise to prominance is the business’ staff culture. Staff training and development is taken very seriously by management, as is staff welfare; this leads directly to escalating turnover and low employee attrition.

“Employees are the most valuable assets to the company. Apart from sending employees continual training to upgrade

Dhoby Ghaut MRT their skills and knowledge, we provide staff welfare, take care of general health, organise annual incentive holidays overseas for staff and often extended family, and give back to the community that helped us succeed with various CSR activities.”

A pillar of the masonry community in Singapore, Earth Arts is paving the way to a sleek and unique built environment.

The second part of this Singapore Business Review two-part feature will focus on Earth Arts as a business with its values, growing awards cabinet and customer-and solutions-centric approach to some of the City-States’ most challenging architectural demands.

“One hundred staff members now produce approximately $25 million in turnover, ten-fold that of the company’s first year in business in 1996.”