Singapore has boosted its water supply by recycling water and increased its physical size by reclaiming land - all feats of engineers.

Indeed, just as engineering helped transform Singapore into a modern state, it will continue to play a key role as the country strives to be a smart nation and overcome its lack of resources, said Prime Minister Lee Hsien Loong yesterday.

But it faces a major challenge in building up engineering talent and keeping abreast of changes in its practice, Mr Lee said at the 50th anniversary celebration of Singapore's Institution of Engineers, attended by about 1,000 people at the Ritz-Carlton hotel.

In Singapore's early years, government scholarships were given to youth to study engineering, to help build the country's basic infrastructure, like transport networks, and to industralise its economy.

The leaders then also believed the study of engineering developed analytical rigour, discipline and problem-solving skills, he said.

"One can argue that Singapore was built on the backs of engineers," Mr Lee added.

But it has since become harder to attract top students to study engineering and do engineering jobs, as many opt for the humanities, business and finance, he noted.

Engineering is among the major professions here with the most vacancies in the past few years.

Singapore needs 1,000 more engineers each year in the next few years to keep public infrastructure projects going. The shortage has prompted Mr Lee to highlight, several times in the past year, the need to grow the pool of engineers and rethink the value of engineering.

Yesterday, he warned that while Singapore has world-class capabilities in building deep-sea drilling platforms, "in many other fields of engineering, even where we have developed competence, we are not at the cutting edge".

For instance, Singapore is very computer-literate but the deepest expertise is elsewhere as Silicon Valley attracts the best IT talent from all over the world, he noted.