Build up Singapore core for economic sustainability

The recent spate of corporate retrenchment of workers is cause for concern for how Singapore can sustain itself in the long run.

What forms the backbone of our economy? How much of it is vested in our own hands?

The world has changed. Just how do we compare with the once envious Asian dragons in the region?

South Korea seems well positioned to ride the winds of change. Its economy is driven by privately owned chaebols such as LG and Samsung.

These enterprises are omnipresent in a myriad of industries. They possess the know-how that covers a broad range, from research and innovation to production and finance.

Many young South Koreans are prepared to withstand the rigours of their recruitment exercises on university campuses. It is evident that South Koreans form the brains and muscles behind the country's conglomerates. They possess the capacity and edge to innovate in their own backyard.

Hong Kong has an economic structure like ours. Years of rising costs have hollowed out the manufacturing industry from Hong Kong.

In recent times, there have been calls for re-industrialisation to bring back jobs, perhaps a sign that nothing escapes the time-tested, brick and mortar production of a real economy, as opposed to service-oriented fields such as finance, real estate and port.

Taiwan seems to have realigned with the Greater China diaspora and transposed its capabilities across the strait.

It is evident that private enterprises drive these economies. They are owned largely by local entrepreneurs and manned by a local workforce.

In contrast, we tend to rely on capital ownership of enterprises, seeking financial investments rather than strategic investments.

Thus, we may have neglected the need to develop our capacities and expertise in innovation, production and finance. Many graduates still aspire to work for foreign multinational corporations, which form a good part of our economy.

While financial investments may yield the returns on investments in the near term, they put us in a precarious position. Our livelihood may be disrupted when business ownerships change hands. Many of us may be left stranded with no jobs when capital pulls out.

It begs the question: Are we reduced to being hired hands at the mercy of economic cycles and foreign investors? Should we not develop our core businesses and people in buffering the effects of such precariousness?

Have we become more Wall Street than Main Street in our orientation? We can draw lessons from the 2008 financial fallout of what may transpire if the real economy is neglected.

Lee Teck Chuan

A version of this article appeared in the print edition of The Straits Times on February 03, 2016, with the headline 'Build up S'pore core for economic sustainability'. Print Edition | Subscribe