Enterprise Development Grant changes aim to help companies; worker benefits need not be wage increases: Koh Poh Koon

Senior Minister of State for Trade and Industry Koh Poh Koon said that changes to the grant are aimed at ensuring transformations are sustainable.
Senior Minister of State for Trade and Industry Koh Poh Koon said that changes to the grant are aimed at ensuring transformations are sustainable.PHOTO: LIANHE ZAOBAO

SINGAPORE - Changes to the Enterprise Development Grant (EDG) are aimed at helping companies have the right manpower to support new technology and avoid a "bottleneck", Senior Minister of State for Trade and Industry Koh Poh Koon said on Wednesday (March 6).

From April next year, companies receiving the funding will have to commit to providing benefits for workers, which can take the form of wage increases or support for older staff.

Speaking on the sidelines of an industry conference, Dr Koh said that changes to the grant are aimed at ensuring that transformations are sustainable.

He pointed out that the EDG will include an element of flexibility and worker benefits need not be wage increases, reiterating that this can also include job redesign or helping older workers to stay relevant.

If companies focus on new technology without upgrading workers' skills, he said, "the ultimate bottleneck (faced) will be the capacity and capability of the workforce to leverage on the technology and take it forward".

His comments came a day after businesses raised concerns about the EDG, for which worker outcomes will soon be a mandatory consideration in a bid to encourage firms to translate transformation efforts into improvements for employees.

Companies had told The Business Times that tying grants to worker outcomes could backfire, given that this adds to costs but does not guarantee that a company's profits will rise. It could make Singapore less competitive in the long term, they added.

Asked whether changes to the grant focused on workers' or companies' interests, Dr Koh said that considering worker outcomes helps companies in the long run.

He added that if the capability of a company's workforce is going to become an issue, it is better to think about how to improve their skills in the early phase of planning, so that transformation will not be a "start-stop" journey.

"We really want to make sure that companies think deeper and think harder. If companies don't, just take the easy approach of buying technology, hoping that will solve their structural issues in the longer term, I think that's not sustainable," said Dr Koh.

Enterprise Singapore, which administers the grant, will understand a firm's needs on a one-to-one basis and help identify the types of outcome it should work towards, he added.

These need not be wage increases alone, and can include things like job redesign or helping older workers to stay relevant.

"It can also involve creating a more conducive work environment so they can continue to attract a new source of talent pipeline to join the sector," he said.

The EDG, introduced in Budget 2018, supports projects that help companies upgrade their businesses, innovate or venture overseas.

With recent changes, the grant will be merged with the Inclusive Growth Programme, run by the National Trades Union Congress' Employment and Employability Institute, which helps companies with productivity projects and requires firms to share their gains through higher wages.

"Through this enhancement, we are trying to signal that the Government is prepared to continue to walk this journey with companies," Dr Koh told the media on Wednesday.

He added that companies can continue getting help to defray up to 70 per cent of the cost of their transformation project, and expressed the hope that firms across different industries will take up the grant.