Changes to the Enterprise Development Grant (EDG) are aimed at helping companies have the right manpower in place when they adopt new technology and avoid a "bottleneck", Senior Minister of State for Trade and Industry Koh Poh Koon said yesterday.
From April next year, companies receiving the funding will have to commit to providing benefits for workers, which could include wage increases or support for older staff.
Speaking on the sidelines of the LNG (Liquefied Natural Gas) Supplies for Asian Markets Conference at Sentosa Cove, Dr Koh said changes to the grant are aimed at ensuring transformations are sustainable.
He also highlighted that the EDG would include an element of flexibility, and worker benefits need not just be pay rises, but could also include things like job redesign.
If companies focused on new technology without upgrading workers' skills, he said, "the ultimate bottleneck (faced) will be the capacity and capability of the workforce to leverage the technology and take it forward".
His comments come a day after businesses raised concerns about the EDG, for which worker outcomes will soon be a mandatory consideration - to encourage firms to translate transformation efforts into improvements for employees.
Firms earlier told The Business Times that tying grants to worker outcomes could backfire, as this added to cost but did not guarantee a company's profits would rise, making Singapore less competitive in the long term.
NO EASY WAY OUT
If companies... 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.
SENIOR MINISTER OF STATE FOR TRADE AND INDUSTRY KOH POH KOON
Asked whether changes to the grant focused on workers' or companies' interests, Dr Koh said considering worker outcomes helped companies in the long run.
He added that if the capability of a company's workforce was going to become an issue, it was better to think about how to improve workers' skills in the early phase of planning so that transformation would not be a "start-stop" journey.
"We really want to make sure that companies think deeper and think harder," said Dr Koh. "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."
Changes to the grant will be administered with flexibility as well, he added.
Enterprise Singapore, which runs the scheme, will learn about a firm's needs on a one-to-one basis and help identify the type of outcomes it should work towards.
These need not be wage increases alone, said Dr Koh, who added: "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."