SINGAPORE - A new 10-year plan to grow Singapore's manufacturing sector by 50 per cent and maintain its share of about 20 per cent of gross domestic product (GDP) was announced by Trade and Industry Minister Chan Chun Sing on Monday (Jan 25).
The plan will raise the global competitiveness of the manufacturing sector, but more Singaporeans will have to work in the sector as the proportion of low-wage foreign workers is reduced, Mr Chan said.
The manufacturing sector contributes about 21 per cent, or around $106 billion of the total GDP, hiring about 450,000 workers, or around 12 per cent of the workforce.
Last year, the sector expanded for six consecutive months from July to December, and experts have said the manufacturing sector will continue to be a key driver of Singapore's economic growth this year.
Speaking to the media after a visit to precision engineering company Univac on Monday, Mr Chan said the Covid-19 pandemic has underscored the importance of the sector to Singapore's economy.
"In a Covid and a post-Covid world, having a more diversified economy is important for us," he said.
Mr Chan noted that the performance of the biomedical electronics and precision engineering sub-sectors were bright spots last year, due to increased demand for their products at the height of the pandemic.
It will also become increasingly important for Singapore to have unique capabilities and products that cannot be found elsewhere, he added.
"In the fight against Covid-19, securing essential supplies sometimes became a barter trade, and may continue to be so as we see global supply chains continue to be disrupted," he said.
"So whether people will sell us things or not, very often (this) also depends on whether we have things that other people value that they want to obtain, beyond just an issue of whether people are willing to pay the price for it," he added.
Mr Chan noted the 2030 goal will require the sector to grow by around 50 per cent in the next decade, which is the same pace of growth as the last 10 years. It is an ambitious target considering that it will become harder to use foreign labour to supplement the Singaporean workforce, he said, adding that the manufacturing workforce will continue to make up around 12 per cent to 15 per cent of the total Singapore workforce, but with higher-skilled roles.
For the sector to achieve the 2030 goal, it will have to develop its competitiveness through its ability to innovate quickly and produce higher-value products, not through lowering the cost of production or labour, he said.
To do that, the Government has outlined a three-pronged strategy.
First, it will continue to attract the best global and local companies in niche areas that will help Singapore remain a critical node in global value chains.
Singapore is a key manufacturing location for some of the biggest semi-conductor companies globally, such as Micron and Infineon - which were both among the most advanced factories in the world, said Mr Chan, adding: "Having two of them in Singapore is good news, but of course, we aspire to do much better, with many more of our companies in the same league as these frontier companies."
Second, Singapore will ramp up its efforts to grow the size and capabilities of local enterprises in advanced manufacturing to create better job opportunities for Singaporeans.
Tailored support will be offered to promising enterprises through various programmes, such as Scale-Up SG, a 2 ½-year programme that helps high-growth local companies expand.
Local companies will also be able to collaborate with leading manufacturing companies through the Global Innovation Alliance, a network of Singapore and overseas partners in major innovation hubs and key demand markets.
Third, the Government will work with polytechnics and universities to make engineering and manufacturing attractive to students.
"Manufacturing is no longer about repetitive tasks done in a structured environment. In fact, today, the biggest challenge for the engineering and advanced manufacturing sector is how fast we are able to innovate and prototype new products and services," he said.
Mr Chan added that efforts will continue to upgrade the skills of older workers in the sector, with the help of trade associations and chambers such as the Singapore Manufacturing Federation.
In response to a question on the relevance of the Industry Transformation Maps (ITMs) with the new 2030 goal, Mr Chan said the ITMs will continue to exist as more targeted strategies for specific sub-sectors.
Since it was announced in 2016 as part of a $4.5 billion programme, there have been 23 ITMs, including those for five manufacturing sub-sectors: energy and chemicals, precision engineering, marine and offshore, aerospace and electronics.