SINGAPORE - While the Economic Development Board (EDB) has done well to secure $17.2 billion of fixed-asset investments in an exceptionally difficult year, the road ahead will be challenging, said Trade and Industry Minister Chan Chun Sing on Wednesday (Jan 20).
Speaking at a media briefing ahead of EDB's annual year-in-review, Mr Chan outlined the hurdles anticipated and the Republic's key economic strategies for 2021 as the world grapples with the impact of the Covid-19 pandemic.
He said Singapore will focus on four key strategies this year, to drive economic recovery and position itself strongly for continued growth, Mr Chan said.
Global value chain
First, it will work to strengthen its position as a critical node in the global value chain.
The Republic's key strategy to identify the best global companies in niche areas it wants to anchor in Singapore and building a strong ecosystem to support them has been successful, Mr Chan pointed out.
"It has uplifted many SMEs in our economy by giving them valuable exposure and experience and helped develop highly skilled and globally valued generations of workers," he said.
Singapore will continue this strategy, especially in new growth areas such as agri-tech, biomedical sciences, electronics and infocomm and media.
Such an approach will also provide greater resilience to its economy and give it an edge in times of need, he said.
New trade rules
Singapore will also forge new trade rules in forward-looking areas such as data, finance and technology.
Following digital economy agreements (DEAs) inked with the likes of Australia, Chile and New Zealand last year, Singapore has launched negotiations with South Korea and is looking to start discussions with Britain soon as well, said Mr Chan.
"These DEAs will allow us to accelerate efforts to develop our digital economy and set high standards in digital trade rules globally," he said, urging more countries to do the same and build bridges rather than put up walls in the digital space.
Strengthen research networks
The Republic will pursue an innovation-led and sustainable economy.
Besides strengthening its research networks and supporting small companies to close the innovation and enterprise loop, Mr Chan said Singapore will also encourage companies to innovate and develop new solutions for regional and global markets.
Support for companies
Singapore will ensure that it continues supporting companies and workers to pivot and remain competitive and resilient in the Covid-19 world.
Support for companies will progressively move from stabilisation to helping them move into new opportunities, with targeted help to shore up corporate capabilities and aid firms in accessing other platforms for innovation and new markets.
"We will give our people the exposure and the experience they need to compete in a globalised economy so that we can increase their chances of success," Mr Chan said.
Citing research by global consultancy McKinsey, which predicts that 75 per cent of the world's top 500 companies will cease to exist, the minister said it indicates that jobs will change significantly and workers' skillsets will need to be constantly upgraded and re-learnt.
As a small and open economy, Singapore will feel these pressures earlier than its global peers, and more so than any other country, he added.
Mr Chan also spelt out the challenges that lie ahead, including the growing income disparity among countries brought on by the Covid-19 crisis.
"Governments all around the world are facing significant domestic pressure to secure investments that will create new jobs and opportunities for their people."
Geopolitical tensions between the two largest economies, the United States and China, are also likely to persist.
He said it could lead to further stress on the international rules-based trading system which many, including Singapore, have benefited greatly from.
Mr Chan also acknowledged the heightened sensitivity regarding the balance between locals and foreigners in the job market.
"We must remember, ultimately, our competitiveness come from our ability to aggregate talent from across the world to complement ours. The real competition is never within Singapore but beyond Singapore with the rest of the world," he said.
The nature of competition for jobs too will change, he noted, given the rise of remote working and hyper-competition across the Internet platform.
But not all competition is focused on cost minimisation, which presents Singapore with opportunities.
"The increased premium placed on business continuity, supply chain resilience, diversification, long term policy consistency will continue to play to our advantage."