Singapore companies have a narrow window of opportunity to ramp up their digital transformation efforts and raise productivity over the next few years, said Finance Minister Heng Swee Keat.
He warned that challenges surrounding the country's ageing population and shrinking citizen labour force will become increasingly acute in the next five years.
Mr Heng told a post-Budget forum organised by Chinese daily Lianhe Zaobao yesterday that firms have to use this short window to restructure and transform digitally.
He was responding to comments from business leaders on a panel, who said Singapore's manpower shortage is a key concern for companies, especially as they ramp up their digital transformation efforts.
Singapore Business Federation chairman Teo Siong Seng said this challenge is affecting companies' competitiveness and asked if the Government is reviewing its manpower policy, especially in view of the country's ageing population.
Mr Heng acknowledged that Singapore's demographic challenges will put "growing pressure" on the economy in the coming years.
"This means companies have a very small window within the next few years to ramp up transformation and raise productivity," he said.
He added that there will be no major tweaks to foreign manpower policy in the coming years, to encourage companies to stay the course with restructuring.
This will stand Singapore in better stead to cope with its demographic challenges in the years ahead, noted Mr Heng, who spoke in Mandarin at the event, which attracted about 200 people at the Novotel Singapore on Stevens.
Keeping older workers and seniors active is also becoming increasingly important as the population ages, he added.
Ultimately, Singapore will remain open to top talent, Mr Heng said, even as the Government takes a more targeted, sector-specific approach to restructuring to help businesses accelerate their transformation.
Two other panellists - Singapore Chinese Chamber of Commerce and Industry president Roland Ng and Singapore Manufacturing Federation president Douglas Foo - pointed to the importance of encouraging companies to collaborate to share resources or invest abroad. Trade associations can play a key role in facilitating these partnerships, they said.
Mr Heng agreed, adding that there is significant scope for firms here to work together - even if they are competitors. He said: "Each company can have its own market or niche while collaborating on certain common areas, like sourcing materials or training workers."