SINGAPORE must aim to be a 'cool and funky' place - the kind of city the creative and entrepreneurial types would like to work and live in, said Senior Minister Goh Chok Tong on Wednesday.

RELATED LINKS  Click to read SM Goh's full speech

'This means building a distinctive city that is cosmopolitan in outlook and Asian in heart,' he said in his keynote address to the Singapore Human Capital Summit.

'It is not easy as this goes beyond physical infrastructure, modern buildings and leisure facilities. Most cities are agglomerations of highly mobile professional nomads'.

'To integrate them, or at least have them around for long periods, we have to offer a lifestyle which they want to be a part of, and importantly, jobs that challenge them intellectually and pay well'.

'An open economy which allows for free movement of trade, capital, people and ideas is essential'.

His speech comes against a backdrop of a looming global economic recession sparked off by the sub-prime housing mortgage crisis in the United States.

Governments, business and workers are bracing themselves for tough times ahead.

Mr Goh said in such uncertain times, human capital and talent is crucial in driving economic growth.

The financial turmoil has also highlighted the increasing pressure that firms and shareholders face in coaxing innovation and performance from their employees, and the urgency of how to draw a fair share of such talent into government and public service.

Increasingly, businesses and governments have realised that the competitiveness of their economies will be driven by how successful they are in attracting and retaining talent, he said.

SM Goh shared with the gathering the Singapore experience in educating the young and keeping the workforce competitive, and its investment in developing talent.

To attract and retain talent, he said Singapore must move beyond being a talent to a distinctive global city.

'This is why it is hosting prestigious golf events and the Formula One Grand Prix. F1 races are not new but having a night race set on a street circuit in the heart of the city is'.

'During the night race last month, pictures of Singapore's skyline were splashed over the international media. Now others are going to have night races,' he said.

'That is the nature of competition, and it keeps us on our toes. So we will be adding other attractions such as the two new integrated resorts, the Gardens by the Bay, a new Sports Hub, and the new arts and cultural offerings to multiply our lifestyle choices. It is a total approach'.

'At the same time, we have continued to invest in our reputation as a safe and clean place, with good schools and medical care to raise a family. To do all this, we need people, skills and talent'.

Another thrust is to build up Singapore as a centre for leading human capital practices and capabilities, he added, noting that several leading consulting firms have set up centres for applied research in human resource and organisational thought leadership here.

The latest is the Hay Group, which will be establishing its global R&D centre in Singapore.

Accenture will also set up a Management Consulting Innovation Centre and Mercer will start a Mercer College in Singapore by early 2009.

SM Goh also restated the need for foreign workers, even if this comes at a political cost.

He said Singaporeans find it easier to accept intellectually and emotionally that foreign manpower is overall a plus for our economy, partly because it is a nation of immigrants.

'They understand that investors come because they are able to tap a foreign pool of labour to supplement local labour, especially with our ageing population,' he said.

'But still, it is important for the government to recognise the anxiety and fear of Singaporeans in the job market with so many hungrier foreign workers willing to do their jobs for less'.

'They worry too that their children may be edged out in our schools and universities by foreign students'.

'These are legitimate concerns that governments must deal with'.

Singapore, he said, faces the dilemma of either going for maximum growth or accepting slower growth in order to slow down the inflow of foreign workers.

'It will not be an easy balance to achieve. For when growth slows down, so do the incomes of Singaporeans, while the costs of living may rise'.

'Moreover, many Singaporeans may lose their jobs. But if the Government goes for growth, Singaporeans have to accept the increasing social costs of a growing foreign population in their midst', said Mr Goh.

But he assured Singaporeans that public policies will continue to 'make Singaporeans feel that it is worthwhile to be Singaporeans'.