While "sexy" industries like advanced manufacturing get the attention these days, old-school businesses that might be less productive remain a vital part of the economy and need help.
Mr Thomas Chua, president of the Singapore Chinese Chamber of Commerce and Industry, made the point on Wednesday, stressing that these traditional operations still have a vital role to play.
Mr Chua told a Straits Times Budget roundtable that the Government could be "more sympathetic" to smaller firms in such areas as they tend to support the more "sexy businesses" by filling important roles in the supply chain. "Without them, I think the big players and all these very promising industries may not be able to take off smoothly."
UOB economist Suan Teck Kin agreed, noting that logistics firms would be hurt if all the packaging companies got pushed out by rising costs. "If you don't have the supporting industries here because they cannot survive, that will be a whole new dynamic again," he added.
The comments were in response to Finance Minister Tharman Shanmugaratnam's Budget speech on Monday, when he identified five "growth clusters of the future" that deserved investment - advanced manufacturing, applied health sciences, smart and sustainable urban solutions, logistics and aerospace, and financial services.
Mr Chua said "the role of the Government is to chart the growth sectors for Singapore but it doesn't mean that traditional business is not important".
He urged the Government "to address immediate problems while we are talking about the future". Mr Chua pointed to some of those immediate problems when referring to the SkillsFuture plan that will drive worker training: "If I can't even find enough workers to fulfil my order, how can I even think about training?"
When many small and medium-sized enterprises (SMEs) still face such pressing problems, said Mr Chua, it is a challenge for the Government to engage them in the next phase of the restructuring drive. He backed Mr Tharman's call that bosses should recognise that their people are their "biggest opportunity", a premise for SkillsFuture, but suggested that manpower policy should be more sector-specific, as a one-size-fits-all "hurts a lot of companies, especially SMEs".
The Budget gave manufacturers a two-year foreign worker levy freeze while other firms got just 12 months. "Why two years? Because over the years manufacturing has shown that their productivity has improved and that the employment of foreign labour has been reduced," said Mr Chua.
"So it's possible to make certain changes, and I think we should have a timely review of some of these policies."
