Singapore pursuing three strategies for sustained, moderate growth: DPM Wong

SINGAPORE – As an advanced economy with a small labour force that already sees high employment levels, it is an “economic imperative” that Singapore relies on productivity to drive economic growth moving forward, said Deputy Prime Minister Lawrence Wong.

To do so, he said the Government will pursue steady, moderate growth, in line with other advanced economies, via three strategies: transforming industries, attracting quality investments, and training workers to be more productive.

Underscoring the need to lean on productivity for economic growth, Mr Wong said Singapore’s labour force growth will need to slow down due to its natural limits, such as the number of foreign workers the country can host, even as it augments its workforce with foreign talent “particularly at the top end”.

Mr Wong, who is also Finance Minister, was one of three panellists in The Straits Times-The Business Times Budget 2023 Roundtable held on Monday. It was moderated by ST associate editor Vikram Khanna.

He was responding to questions from Mr Khanna on whether it was a gamble for the Republic to depend extensively on productivity, given Singapore’s low productivity compared with other advanced economies.

Mr Wong also said

economic growth of 2 per cent to 3 per cent,

compared with the 7 per cent seen in Singapore’s past, is a “natural evolution of our economy”, in the light of high per capita income.

“The economy is now more mature. You’re at a high base. The next incremental step gets harder and harder.”

Nonetheless, the Government cannot allow Singapore’s economy to stagnate and lose ground, he added.

Thus, measures to support industry transformation were introduced, with the Enterprise Innovation Scheme unveiled in Budget 2023 among the latest.

The scheme offers more tax deductions, among other benefits, to encourage continued investments in innovation by companies here.

Mr Wong said that although it is easier for manufacturing and other exportable industries to transform than for domestic services, promising outcomes are still being seen in the construction, food and beverage, and retail sectors.

As for the second strategy, to continue attracting high-quality investments at the frontier of technology, Mr Wong said the Government has topped up the National Productivity Fund by $4 billion in Budget 2023 to ensure innovations that can improve productivity are brought to Singapore’s shores.

“The third aspect of it is really our workers, because you have firms, you have investments, but we also need our workers to continually reskill and upskill themselves.

“And that’s the whole SkillsFuture ecosystem that we are working on. And I think, with all these three strategies, we can continue to make progress as a more innovative and a more productive economy.”