A major challenge Singapore faces in growing its economy is improving productivity and transforming "old activities into new and more relevant and competitive ones", said Prime Minister Lee Hsien Loong.
But that is an arduous task as productivity growth is slowing and nobody quite understands why, although various explanations have been given for it, Mr Lee added.
He made the point in an interview with The Australian newspaper on the many challenges lying ahead for the country, after celebrating its achievements of the past 50 years.
"The uncertainties in the globalisation ethos... will pose many challenges,'' he said in the interview last week. A transcript was released to Singapore's media this week.
Mr Lee also noted that information technology (IT) has fallen short in raising productivity.
Although we have not solved all the problems, people could see we were working at it, and things were getting better. They gave us credit for trying.
PRIME MINISTER LEE HSIEN LOONG
IT has changed lifestyles and the quality of life, but it has yet to show up in performance. He hopes it will happen eventually - "whether it is your hospitals getting scans read by a smart program faster and more reliably, or whether it is delivering your groceries and your daily necessities, logistics more efficiently."
But it would need people to change the way they do business, Mr Lee said. "It is not just doing the same thing a little bit faster. And that's tough, and that means there will be losers and the losers will yell. So, that is one big challenge."
Also, Singaporeans would have to learn to live with slower growth of 2 to 3 per cent a year, instead of 6 to 7 per cent, which would affect the jobs available and the rate at which quality of life improves and incomes go up, he said.
These are trade-offs. "It is not easy and it is very seductive for an opposition who's just trawling for votes, to say, 'Vote for me, I will reduce the taxes and soak the rich'.
"Fortunately, in this last election, some of the opposition pitches were so shrill that the population wisely took counsel and decided there was a real risk."
Mr Lee said that the 70 per cent vote share of his People's Action Party (PAP) in the Sept 11 polls surprised him.
It could be attributed to three things, he added. They are: a sense of gratitude following the death of his father, founding prime minister Lee Kuan Yew, in March; the feel-good factor of the Golden Jubilee; and the Government and PAP Members of Parliament working hard to solve both immediate and long-term issues.
"Although we have not solved all the problems, people could see we were working at it, and things were getting better," he said. "They gave us credit for trying."
Asked whether the electoral success would be hard to sustain, he said: "Every election is different. I do not work on the basis that this is the baseline for the next election."
Mr Lee said there would be another 100,000 to 150,000 new voters at the next election, and a near-corresponding number would have passed on or would no longer be voting.