Parliament: Economy transformation 'more urgent by the day', warns Heng Swee Keat

Finance Minister Heng Swee Keat said growing Singapore's economy is not only the best way of ensuring strong and sustainable revenues, it is also the most important way for its people to realise their aspirations.
Finance Minister Heng Swee Keat said growing Singapore's economy is not only the best way of ensuring strong and sustainable revenues, it is also the most important way for its people to realise their aspirations.ST PHOTO: ALVIN HO

SINGAPORE - The most critical challenge facing Singapore today is to transform the economy, and this grows more urgent by the day, Finance Minister Heng Swee Keat has warned.

In his Budget debate round-up speech on Thursday (March 1), Mr Heng said the strategy is to position Singapore as a Global-Asia node of technology, innovation, and enterprise, which Mr Lee Yi Shyan (East Coast GRC) spoke about.

Mr Heng said: "Growing our economy is not only the best way of ensuring strong and sustainable revenues, it is also the most important way for our people to realise their aspirations."

The broad-based business support schemes that the Government has introduced in the past few years have built awareness among local companies about productivity and innovation, he said.

Now, the Government is making a push for firms to deepen their capabilities at every stage of growth.

While companies can tap a wide range of targeted support programmes to do so, he added that government grants are meant to catalyse companies' transformation and should not become permanent support.

The Wage Credit Scheme, for example, is a transition scheme that was extended but will be tapered down, as it is meant to provide temporary support for businesses that raise wages for Singaporean workers, while they press on with efforts to transform and become more productive.

 

In his Budget speech this year, Mr Heng had announced several measures to support businesses on their transformation journey, including a new Open Innovation Programme, a new virtual crowdsourcing platform that will match the digital requirements of businesses to solutions created by infocommunications and technology firms.

He also unveiled increases in tax deductions for expenses on research and development and intellectual property registration.

The overarching strategy for the economy is to position Singapore as a Global-Asia node of technology, innovation, and enterprise, Mr Heng said.

This involves a three-pronged approach: fostering pervasive innovation throughout the economy, building deeper capabilities in local firms and people, and forging stronger partnerships at home and abroad, to build scale and ride on the region's growth together.

There have been encouraging signs of progress, he said.

Citing a recent Singapore Business Federation survey, he noted that almost 75 per cent of firms polled said they had introduced new processes or training to improve efficiency, while over 80 per cent said that they had expanded their operations overseas.

He added that some Singapore companies are developing the know-how to move into higher-value markets, some firms in traditional industries are transforming their businesses through innovation and the start-up scene is taking off.

Internationally, people are paying attention to the increasingly vibrant innovation scene in Singapore, Mr Heng said.

This year, Singapore climbed three places in the Bloomberg Innovation Index, to be ranked as the third most innovative economy globally.