From the gallery

From the gallery: No silver bullet, everyone has a part to play

The Singapore skyline photographed from Marina Bay Sands on Feb 16, 2015.PHOTO: ST FILE

Throughout his 90-minute speech to round up the debate on the Budget yesterday, Finance Minister Heng Swee Keat cited real-life examples of individuals and companies to illustrate how they have overcome challenges.

They serve as clear examples of how success can be wrought even as the economy restructures. But behind the smiling faces and inspirational stories is a sober message: Firms and workers have to change, and need to do so quickly.

There is a lot at stake. After 50 years of stellar growth, Singapore faces an uncertain future, one in which there are no longer any textbook answers, said Mr Heng.

"We know where we want to go, we know where we come from. It is the in-between, the getting there, that is full of unknowables," he said.

Within Singapore, the working population is ageing rapidly while physical resources such as land are limited. Externally, competition is rising not just from countries, but from technology - a big disruptor of industries and firms. Trade patterns are shifting, with the US and China preferring to manufacture goods at home, thus shrinking markets for local firms, Mr Heng noted.

What's a small country like Singapore, which has survived by forcing itself to be relevant to everyone else, to do? The answer: Take cold, calculated risks on three fronts.

One, the Government will no longer look to help every company, but move to a targeted approach, as it has done on social policy. Instead of helping weaker companies, assistance will be extended to those that can innovate and thrive.

Mr Heng couched this in polite language and called it fostering a "spirit of enterprise".

Yet there was a steely response to calls for more help for firms to cope with the short-term slowdown: "One way of supporting this spirit of enterprise is to make sure that viable firms can survive this period of cyclical weakness. Otherwise we lose precious capabilities that are difficult to rebuild later and our people's livelihoods could also be at stake." The Government has to be judicious in choosing who to help "so our finite resources will not be trapped in 'zombie' businesses, as Mr Ong Teng Koon (Marsiling-Yew Tee GRC) warned and in particular our workers will not be trapped in firms in sectors with poor prospects," said Mr Heng.

This swing towards companies that heed the call to transform their businesses is a sign that the Government is more prepared to help those who help themselves. As for companies that complain about costs, he stated simply that the Government cannot permanently provide subsidies to keep costs low.

Again, his message was firm: If this meant weaker, less innovative companies have to fold, well, that's just the cost of restructuring.

Two, the Government is clearly shifting emphasis to focus support on local enterprises. Budget 2016 was tilted towards SMEs and helping small firms grow through programmes like the $450 million Automation Support package.

Much of Singapore's success in the developmental years was based on wooing big foreign firms to set up here. The way forward was to get investments and technical knowledge to grow the economy.

Foreign investment remains important. But the Government has started to focus fire-power on local SMEs, which have had a patchy record of success. Also, only a handful of home-grown companies - take Singapore Airlines - can call themselves world beaters.

There is a risk that such investments may not spawn the Facebooks of tomorrow. But with the bulk of the economy made up of local firms, there is no choice but to grow them and hope for success.

The third area in which Singapore has to take more risks is in trusting its people and firms to come up with solutions. The Government does not pretend to have all the answers.

For example, when it comes to nurturing innovation, there is no "textbook answer", Mr Heng said.

"So in Government, we too need to embrace the spirit of enterprise. We have some clear ideas of where we need to go, what we need to do. But we must be humble and have to figure it out dynamically, learning and improving and improvising as we go along and working in partnership with businesses."

That is why the Budget's theme has been about partnerships: people working with firms and the Government. This is the best, though not guaranteed, chance of finding the solutions. But it means the Government will not only have to work with firms and trade groups, but also consider new and potentially radical suggestions. It can show its willingness during deliberations of the Committee on the Future Economy.

There are no silver bullets or easy answers to the challenges ahead. But if Singapore is to survive, everyone has to try hard- not sit back and expect to be bailed out.

A version of this article appeared in the print edition of The Straits Times on April 07, 2016, with the headline 'No silver bullet, everyone has a part to play'. Subscribe