Six industry clusters to drive economic transformation

The aim is to position Singapore as a key node for technology, innovation and enterprise in Asia and around the world.
The aim is to position Singapore as a key node for technology, innovation and enterprise in Asia and around the world.ST PHOTO: LIM YAOHUI

Heng outlines plan to position Singapore as key node for technology, innovation and enterprise

The next phase of Singapore's economic transformation will involve deepening linkages between complementary industries by grouping them into clusters, said Finance Minister Heng Swee Keat.

The aim is to position Singapore as a key node for technology, innovation and enterprise in Asia and around the world.

The latest move comes after the Government rolled out 23 sector-specific road maps for transforming key industries, called Industry Transformation Maps (ITMs). A total of 23 road maps covering 80 per cent of the Singapore economy have been launched.

These sectors will now be grouped into six clusters to maximise opportunities for collaboration, Mr Heng said at a media briefing yesterday.

The six clusters - each helmed by a minister and at least one private-sector or union representative - will be unveiling plans in the coming months to promote innovation and encourage partnerships within these sectors.

The clusters are: manufacturing, built environment, trade and connectivity, essential domestic services, modern services and lifestyle.

Such an approach will help bring diverse capabilities together, said Mr Heng. For example, in the lifestyle cluster, there is scope to explore how firms in hotel services and food services can work together to bring major events and conferences to Singapore, as well as improve experiences for tourists.

Citing hawker centres as an example, he added: "In a hawker centre, stalls sell different food and are competing but at the same time they are cooperating - people know that hawker centres will always have a great variety of good food.

"This is what I hope Singapore companies can also do. Everyone is good at something, and together we can build a reputation as the best 'hawker centre' in town."

The aim is to cement the Republic's position as a "global Asia node of technology, innovation and enterprise", said the minister.

This means making innovation pervasive, building deep capabilities in companies and among workers, as well as developing strong partnerships locally and around the world.

Mr Heng said the pace of transformation has been uneven across sectors, but more companies now understand the urgent need to become more productive.

Some of the factors spurring firms to change include restructuring efforts in the economies of Singapore's major trading partners, the rise of disruptive technologies, as well as the challenges accompanying Singapore's ageing population.

The global economy is also in better shape compared with when the ITMs were first launched, Mr Heng noted. Singapore's economy has picked up over the past two years and productivity is also up.

"(Some of this growth) shows that some of our efforts are paying off... We must make full use of this upswing to make all the changes that are necessary," he added.

CIMB Private Bank economist Song Seng Wun said it is still early days for the ITMs and it remains to be seen how much of an impact they will have.

"The economy experienced a cyclical upturn over the last two years, so it is harder to tell whether restructuring efforts have borne fruit," he noted.

"The real test will come when the economic cycle matures - that is when the effectiveness of these policies will be more apparent."

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A version of this article appeared in the print edition of The Straits Times on April 19, 2018, with the headline 'Six industry clusters to drive economic transformation'. Print Edition | Subscribe