Singapore needs to beef up its unemployment protection as more middle-income workers are set to lose their jobs to restructuring and technological change in the coming years, according to a panel of experts yesterday.
Panellists at a post-Budget roundtable convened by the Economic Society of Singapore said better cushions for the unemployed will also encourage more people to venture out on their own and become entrepreneurs - an essential element of a more innovative society.
The annual roundtable, held this year at the Mandarin Orchard, featured Dr Giovanni Ko, an assistant professor at Nanyang Technological University's economics division; Ms Selena Ling, head of treasury research and strategy at OCBC; Mr Jimmy Koh, head of global economics and markets research at UOB; and Mr Luis Coronado, Asean transfer pricing leader at EY.
The roundtable was chaired by Dr David Lee, a professor of quantitative finance at Singapore Management University.
The panellists noted that the Budget put heavy emphasis on automation, innovation and preparing for the future, but they said more still needs to be done to help workers hit by the economic transition.
The conventional wisdom is that technological change and automation will make manual jobs redundant, but this has not been the case, said Dr Ko.
"Manual jobs often require flexibility, judgment and common sense... Many jobs look simple but require a lot of implicit knowledge and skills, for example, nursing," he noted. This makes them difficult to replace with robots.
Instead, middle-income jobs which involve repetitive tasks and routines have been hit hardest by the advent of technology in developed economies.
"Many people (in developed countries) have lost jobs that are comfortable... and are the low-hanging fruits of automation," said Dr Ko. He added that many workers in Singapore still hold such jobs.
"We can't have a push towards automation without a safety net to catch these people."
Besides providing a cushion to those who have lost their jobs, Ms Ling and Mr Koh both said some form of unemployment insurance will also help encourage more risk-taking and innovation.
Entrepreneurship is associated with a high risk of failure, said Mr Koh. "(People) still have mortgages to pay... (Without a social safety net) people will ask, why should I take the risk?"
Ms Ling said the key challenge lies in getting Singaporeans on board with preparing for a more uncertain future - where technology will change the world of work and their jobs might be at risk.
"It's a challenge for people to get out of their comfort zones," she said.
The panellists covered a wide range of other issues surrounding the Budget, which Finance Minister Heng Swee Keat delivered in Parliament last Thursday.
Topics included the shift away from broad-based measures to drive restructuring towards more targeted schemes, sustaining the Government's revenue base in the long term even as spending needs grow, and external economic challenges facing Singapore, such as China's slowdown.