I want to focus on how we can make it in the next stage of our economic development.

Globalisation and technology have made the competitive environment a tougher one for us. For example, the Internet has removed geography as a barrier to competition. It will be the Silk Road of the world, bridging civilisations and distant places.

Today, many world-class companies are at our doorstep. The regional economies are gradually opening up. The financial crisis forced Asian countries to sell off troubled companies. In some cases, world-class players have taken over management control. For example, they are operating some ports in our neighbourhood. World-class management will make these companies much tougher competitors. They are no longer sheltered, state-owned companies which we can easily compete against.

To stay ahead of our competitors, we must make the leap to a higher level of performance. This is also the only way to exploit the enormous opportunities offered by the Knowledge Revolution.

We are not alone in trying to make this leap. I recently visited Ireland, Belgium and Germany. Leaders in all these countries were focussed on IT and biotechnology, just like us.

Beijing, Shanghai and Xi-an, which I visited in April, are doing likewise.

So in this new race, we up against the developed countries, and against the best from the emerging economies. Can three million people compete successfully against them?

I believe we can. However, it is not enough just to do better in whatever we are already doing. We must master new high-growth areas, like IT, life sciences and financial services.

In these growth sectors of the future, the key success factor is people. Talent and knowledge will decide who will be winners and losers.

We must, therefore, change our mindset towards foreign talent. If we systematically recruit and welcome talent, and absorb them into our society, they will raise our know-how and competitive edge.

We have a lot to learn from the US here. The US economy is so vibrant largely because it is a talent-importing country. Throughout its history, it has attracted immigrants, including talent of all races and religions from many countries. These foreign talent have, over time, become American talent.

Premier Zhu Rongji told me that tens of thousands of PRC Chinese are studying and working in the US. Indian Ministers told me the same thing about Indian nationals.

We cannot hope to attract the same range and depth of talent as Silicon Valley. But we can be a magnet for Asian talent. Even if we do not manage to get their very best, given the vast reservoir to draw from, the talent that does come will still be of high quality, and will contribute significantly to our development.

I see foreign talent, or global talent, not as a quick fix to make up for the shortage of local workers. This is a long-term strategy to enable Singapore to sustain its vitality, competitiveness and prosperity. If we can absorb a steady inflow of global talent into Singapore, our ideas and outlook will stay fresh and vibrant, and we can be a competitive, global player.

Fortunately, Singaporeans are talented too. The Government will continue to invest heavily in education and training to nurture and develop our own talent. We are running schemes and programmes to improve the knowledge and skills of workers. But we can further enlarge every Singaporean’s potential by giving him the opportunity to work together with global talent. Singaporeans will benefit from the chance to learn from others and to pit themselves against the best.

The Knowledge Economy is not just for cosmopolitans, graduates and whiz kids. It is also for the heartlanders and traditional sectors. For example, fish balls, fish cakes, popiah skin, and roti prata were once made by small family businesses. Today, these traditional products are manufactured in modern factories. Durian sellers have gone online, and noodle sellers have franchised their product. They have become part of the Knowledge Economy.

If we make it as a Knowledge Economy, the heartlanders too will enjoy the prosperity. New jobs will be created for them in competitive companies that pay well and offer challenging careers. We will have first class health care, education, public transport and telecommunications, that all can afford.

On the other hand, if our economy fails to grow, Singapore will become a backwater. Incomes will fall, and we will lose influence internationally and become irrelevant. The standard of public services will drop. Everyone will suffer, especially the heartlanders who cannot emigrate.

Directly or indirectly, therefore, all Singaporeans depend on our success in attracting global talent and becoming a Knowledge Economy. We need a positive and competitive state of mind, a willingness to learn, innovate, and create.

I am confident that if we apply ourselves and work together as a team, we can be winners in the Knowledge Economy.

Now let me continue my speech in English.

Thank you.

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