Recent spikes in volatility, whether in financial markets or the political arena, have grabbed headlines.
But quietly underpinning them is a shift towards a new phase in global affairs marked by slower growth and continuing tensions, Deputy Prime Minister Tharman Shanmugaratnam said yesterday.
Speaking at The Straits Times Global Outlook Forum, Mr Tharman, also Coordinating Minister for Economic and Social Policies, gave an overview of the global trends.
He said growth opportunities still exist for "players who are innovative, individuals who are skilled and teams that bring the right skills together". Part of the world's complexity today comes from the confluence of cyclical and structural factors in virtually every economy.
In the case of the United States, the cyclical challenge of lifting economic growth rubs up against long- term structural issues such as stagnating household incomes, the disappearance of many jobs in the middle of the skills spectrum and a shortage of much-needed skillsets, he noted.
In China, cyclical issues such as the unwinding of excess debt and property oversupply come as the economy shifts away from manufacturing and investment-driven growth to growth driven by consumption and services, he added.
Even in manufacturing, structural change is under way, which will affect other economies, he said.
"We had a supply chain that China was part of within Asia... whatever China made you'll find inputs coming from a whole range of countries. China is now producing more of those inputs itself," he said.
That shift is having dramatic effects on economies such as South Korea, Taiwan, Singapore and Japan as the inputs that these economies once contributed are now increasingly being made in China itself.
Also, such structural shifts will increasingly weigh on growth, Mr Tharman added. "I don't myself think that this is a permanent slowdown but we're going through a period, a number of years, we're going to see slow trade growth."
Still, the world does not lack opportunities, but to keep tapping them, Singapore has to move towards an economy driven by innovation - and an innovative society.
Through SkillsFuture, the first step, the Government aims to equip people with skills so that they can work in a technology-rich world so that jobs are preserved and better jobs created.
Second, the Government will work with companies to create "innovation chains", linking large firms with small ones and foreign firms with local ones, so that technological advances will be diffused throughout the economy and innovation becomes pervasive.
Third, a cultural change is needed. Parents and teachers should be "less obsessed" about grades and focus more on giving children diverse experiences, while workers should take pride in mastery in their fields.
Many innovations are already occurring, from a recent lecture at Nanyang Technological University via a holographic display, to the launch of new mobile apps and smart devices, he said.
"Something is gradually bubbling up in Singapore, but we have to give it a real push across the board."
Singapore needs a culture change: DPM Tharman: Read this and more reports on the ST Global Outlook Forum 2015 in The Straits Times on Monday.
