What challenges lie ahead in the next 10 years: Economy

Singapore needs to find a way to continue growing its economy, to improve the lives of its people.
Singapore needs to find a way to continue growing its economy, to improve the lives of its people. ST PHOTO: LIM YAOHUI

Singapore needs to find a way to continue growing its economy, to improve the lives of its people.

The country's growth has been high, with its real gross domestic product soaring 40 times since independence in 1965.

But this growth is slowing. Singapore's GDP is forecast to grow by 2 per cent to 4 per cent a year going forward.

How will this growth happen? There are two ways: by growing the workforce, and by boosting workers' productivity.

Employment growth from now until 2020 will be about 2 per cent. This is because baby boomers are retiring, fewer young people are entering the workforce, and Singapore cannot continue taking in foreign workers at a high rate. This means that its productivity must grow by 2 per cent - a hard slog that requires transforming businesses and helping individuals master workplace skills under the SkillsFuture programme.

For example, in the PSA's older container yards, one operator was needed for each rail-mounted gantry crane which stacks containers.

But with automated cranes now being used in its expanded Pasir Panjang terminals, one operator can oversee five cranes. So productivity has gone up.

Mr Lee said constant improvement is needed to stay ahead of its competitors. Workers will benefit from this because if PSA's business grows, their wages will go up. If it fails to grow, four out of five operators will be made redundant.

A version of this article appeared in the print edition of The Straits Times on July 01, 2015, with the headline 'Economy'. Print Edition | Subscribe