S’pore’s forward strategy: Stay open, develop local

In his speech to the Economic Society of Singapore on Tuesday, Deputy Prime Minister and Minister for Finance Lawrence Wong outlined the Government’s thinking as it updates its economic strategies. Here are edited excerpts.

Our first imperative is to stay open and connected to the world. ST PHOTO: KELVIN CHNG

Singapore’s economy is maturing. Our population is ageing, and our resident labour force is slowing down. It will be more difficult, therefore, to sustain the high levels of broad-based growth that we have experienced in the past. 

Nevertheless, we do have several things going in our favour. We’ve established ourselves as a hub for the region and the world – a hub for business, investments, finance, talent and innovation. Our reputation as a reliable and trusted hub has been enhanced through the pandemic. In a turbulent world, we can remain a bastion of stability, openness and innovation – and we can continue to make a good living. 

But the key to achieving that is that we must continue to refresh and update our economic strategies and make the most of the one resource we have – that is our people and human capital.  Today, let me share my preliminary thoughts on what more we can do in this area.

Staying open

Our first imperative is to stay open and connected to the world.  We are a little red dot with no natural resources and no hinterland. And staying open is the only way we can survive and thrive.  This is true for Singapore, but openness is in fact the basic driver of human progress throughout the world and over long periods of history. 

Unfortunately, populism and economic nationalism are now on the rise in many countries.  Take the example of what happened with Brexit. It’s a very emotive issue. in the run-up to the debate on Brexit, there were claims that the UK would be economically better off leaving the European Union and many of these claims were really not founded on sound economics. Not surprisingly today, close to half of Britons feel that their daily lives are worse after Brexit, not better. 

We are not immune to such populist claims in Singapore either.  In recent years, we’ve seen very ugly anti-foreigner sentiment surfacing in some quarters; most times, the arguments are cleverly packaged to sound as reasonable as possible. 

For example, some say we are not trying to shut Singapore off, we want to stay open in principle, but why not just get rid of more foreigners and then we can reclaim more good jobs for Singaporeans? Sounds very reasonable. And in fact, if you take a poll, a lot of people might actually say yes to such a proposal. But that thinking is fatally flawed. Getting rid of the foreigners doesn’t mean that the jobs will automatically go to Singaporeans.

On the contrary, if our policies become overly restrictive, global companies based here will simply find other places to operate in, places with larger markets or larger pools of expertise.  Then we will lose all the jobs that the companies brought here. If this perception of Singapore sets in, decades of hard work to build up our hub will be wasted. Our economy will contract, incomes will decline and go down in a tailspin. We’d end up with far worse problems, and it’s Singaporeans who will ultimately pay the price.

For us to continue to thrive, we must always pursue a twin strategy: stay open and develop local. It is a double-barrel strategy. 

Stay open because we want to continue to attract the best companies and top talent to Singapore, so that we can have the best teams here to do cutting-edge work, and push the frontiers of possibilities. At the same time, do everything we can to develop our people – and enable Singaporeans to excel and succeed in their chosen professions and careers. 

This is why we have also been very deliberate in bringing in new investments to Singapore – make sure that these investments help to strengthen our capabilities and our people. 

DPM Lawrence Wong speaking at the Singapore Economic Policy Forum 2022 on Oct 18, 2022. PHOTO: ECONOMIC SOCIETY OF SINGAPORE

At the same time, our assurance to Singaporeans is that we will redouble our efforts to develop and support every worker and professional. We will do so in several ways. First, by continually updating our manpower policies and rules to manage the flow of work pass holders, and to ensure that they are of the right calibre.  

Second, we will make sure that employers adopt fair employment practices, and we will take a strong stance against discrimination at the workplace.

Third, we will invest more in skills training for our people, with a focus on developing more Singaporean specialists and leaders across all sectors of the economy. 

Equip, empower and assure Singaporeans

This investment in skills and human capital has been and will continue to be a key priority for the Government. 

We have made a good start with SkillsFuture, this was to create a culture of lifelong learning. We will continue to enhance SkillsFuture. Last year, over 660,000 Singaporeans benefited from SkillsFuture-supported programmes, which is very encouraging. But for our workers to continue to compete and stay relevant, they will need to build deep skills and acquire deeper capabilities over time.

For some, short bouts of upskilling from time to time will be enough to top up our skills. But, frankly, just going for sporadic, half-day courses cannot possibly be enough.  We will all need more extensive efforts to upgrade our skills and stay relevant amidst changing industry needs, or even to pivot to new areas where there are more opportunities. 

The bottom line is that we will need to make it possible for workers to invest their time in more meaningful and substantial training. We can do much more on this front, especially for our mature and mid-career workers in their 40s and 50s.  They are more at risk of career disruption, as their skills may be less “current”. They are also likely to have heavier obligations, taking care of both parents and children at the same time, which make it difficult for them to take time away from work for extended periods. We must develop a system which can cater to their needs and help them continue to provide the best for their families. All this will require a fundamental upgrading of our SkillsFuture ecosystem.

It is not going to be an easy task. We are distilling the best practices from around the world, and studying carefully how to apply them in our context, and do this effectively in Singapore. It will require very tight collaboration and partnership across the different stakeholders – be it training providers, educational institutions, employers and industry associations, workers and unions. 

One of the downsides of the welfare systems that you have seen in other countries is that displaced persons who start working again end up losing most of their benefits that they get when they are unemployed. So the safety net inadvertently becomes an incentive to stay unemployed. We have to avoid this problem by designing our support system to make retraining and employment support easily accessible, especially for mid-career and mature workers. Help them to future-proof themselves by constantly upgrading their skills. For those who are displaced, our system should nudge them towards active job search, and give them an injection of skills if needed, so that they can find good job matches that build on their wealth of skills and experience. 

All of this put together will be a key part of our refreshed compact with all Singaporeans – that we will stay open as a vibrant hub for the world and, at the same time, Singaporeans can be assured that they will never walk alone as they journey through their careers. We will walk this journey together with all Singaporeans. 

Finally, we will also need to strengthen the multiple pathways of progression in our society, to uncover the different strengths of our people, and help their talents flourish. This is all the more crucial given the diverse aspirations of our society and the rapidly changing needs of our economy. Embracing this diversity will also allay the stress of everyone striving for that same, narrow conceptions of success. That is why we are doing more to develop different peaks of excellence and encourage a variety of interests in our students.

Our school system is becoming more diverse and flexible. We have been taking steps over the years to blunt the effects of streaming and allow for more fluidity in our system.

But the changes cannot just stop at the education system. We need to see broader change in our economy too. It still places too much of a premium on cognitive abilities – what we deem as “head” work – and does not value sufficiently those engaging in other forms of work, such as technical roles which tend to be more “hands-on” work, or service and community care roles which tend to be more “heart” work.

We see this, worryingly, in the divergence between the starting pay for ITE, polytechnic and university graduates. The median starting salary for a university graduate is almost twice that of an ITE graduate. And this earnings gap increases over their lifetimes. 

We are tackling this in a variety of ways. We have already tightened our foreign worker quotas and increased our Local Qualifying Salaries over the last decade. 

We have also uplifted the wages of lower-wage workers, through the Progressive Wage Model. This has resulted in real wage growth for our lower-wage workers over the past decade and will continue to do so for the coming decade. We are also expanding the Progressive Wage Model to more sectors and occupations.

We are also investing more to raise the quality of vocational instruction in our institutes of higher learning by levelling up our ITE skills-based curriculum to give students deeper industry-relevant skills, and increasing the number of work-study diplomas across sectors so that students can have a career head start after they graduate. 

The investment in skills and human capital has been and will continue to be a key priority for the Government.  PHOTO: ST FILE

‘Heart’ and ‘hands’

Beyond these moves, we must do more to recognise the value of “hands” or “heart” work across the economy. Many of these jobs tend to be in the local services sector, where productivity is generally lower than the export-oriented industries. So there is a need for painstaking effort, industry by industry, to look at ways to redesign jobs and raise productivity; to upgrade skills, and to establish better career progression for workers. 

For example, we have been doing this in the pre-school sector, especially across all the government-supported pre-school centres. Not just having better starting salaries for the teachers; but also a clearer skills and careers ladder for everyone in the pre-school sector. For example, some may become specialist teachers in fields like early intervention for children with special needs; or those with the aptitude and capabilities might take on leadership positions – to mentor teachers, develop teaching practices, or even oversee a cluster of pre-school centres. What I have just described for the pre-school sector, is something we must strive to do across all sectors of the economy.

If we can do all these, I am confident that we can uplift the wages of these industries over time. The Government will do our part by investing in our people, and reducing the material gaps in wages and incomes between these different types of work. Businesses must do their part too, by recognising the value of different types of work, redesign their business processes and jobs, and pay their workers well.  Even as we roll out progressive wages, the Government is helping to co-share the wage increases. All of us as Singaporeans must do our part, and be willing to pay more and bear the higher cost of goods and services delivered by our fellow workers in these different sectors and occupations. 

For many, wages is just one part of this debate. Respect and dignity matter equally, if not more. We must move away from preconceptions that academic success should be prized above all others. Instead, we must respect those who labour with their hands and hearts, and confer upon them the same status as other paths. We must also give them opportunities to advance in their respective fields, and not pigeonhole them into specific tasks, or hold them back unfairly.

This will again require a fundamental mindset changes in our society – by employers in the way they hire, train and promote, and by each of us, in how we respect one another, regardless of our occupation or station in life.

Ultimately, our promise must be this: regardless of which path you take, as long as you work hard and continually upskill, you will be accorded recognition for your skills, given opportunities to advance, and be rewarded fairly for your efforts.

In my various Forward Singapore engagements so far, the same threads have consistently come up in describing the Singapore we want for ourselves and our children: a place of opportunity, where people can aspire to exciting careers and jobs; a place where everyone is assured that they will always be supported to realise their potential and succeed, especially if they fall on hard times; a place which values the contributions of all Singaporeans, regardless of who they are or what they do.

I have tried to sketch out some of our plans to realise this vision. Some of these shifts will not be easy to attain. But if we work together, I am confident that we can expand the possibilities for fulfilment and success for every generation of Singaporeans. This is the great task of nation-building that falls upon our shoulders. This is the Singapore that I hope to see in my lifetime.

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