The Straits Times says

Adapting to demographic change

The news that 14 primary schools, six secondary schools and eight junior colleges would be paired and merged in 2019 was a jolt to Singaporeans, coming as it did from out of the blue. But in fact, the signs have been there for some time. While much attention has been focused on the merits of the move and its impact on these schools and their alumni, some larger issues should also be considered. The mergers are the direct result of falling birth rates over the years and an ageing resident population . This demographic trend will affect many areas with more significant consequences than the merger of several schools. Singaporeans will have to adjust to this new reality - the sooner the better .

Already, the Singapore Armed Forces (SAF) has had to ready itself for smaller enlistment numbers: falling from a peak of 21,000 in 2011 to an expected 15,000 in the years ahead. The SAF's response has been to acquire technology and equipment that require fewer soldiers to man. An example is its High Mobility Artillery Rocket System which requires a team of only three, compared to other artillery systems that need seven.

It is the economy which is likely to feel the greatest impact from a shrinking and greying workforce. If this isn't compensated for by higher productivity, economic growth will slow down. In fact, this has already been happening over the last few years as the Government moderated the inflow of foreign labour. Because productivity growth was sluggish, the economy grew more slowly than in previous years. Expect even greater pressure on labour-intensive businesses in the years to come as the workforce shrinks.

There are other implications: housing demand will slow down and might depress resale prices. Other forms of consumer demand might also decline, affecting the already-depressed retail business. These are the inevitable consequences of a population shortfall, unless there is a dramatic increase in birth rates or a change in immigration policy. No easy solutions are evident in most developed urban societies, given changing marriage and parenthood choices, and prevailing public sentiment against overly liberal immigration.

However, birth trends need not mean gloom and doom. It all depends on how Singaporeans respond to the challenge. Smaller can mean quicker and nimbler. As the SAF example shows, technology and teamwork can make up for numbers. Also important is the quality of individuals and organisations. If every Singaporean is a highly skilled and motivated person, educated to the best of his or her ability, and the nation continues to be united and tightly organised, it can turn adversity into advantage. Demographic change is inevitable but its effects can be managed better when people are prepared to embrace change in general.

A version of this article appeared in the print edition of The Straits Times on May 10, 2017, with the headline 'Adapting to demographic change'. Print Edition | Subscribe