SINGAPORE: Positioning Singapore as the global Asia node of technology, innovation and enterprise will be the next critical step in the country’s economic transformation, said Finance Minister Heng Swee Keat on Wednesday (Apr 18).
To do so, there must be efforts to make innovation pervasive, to deepen capabilities of companies and workers, as well as strengthen cooperation within Singapore and across the region.
Mr Heng, who is also the chairman of the Future Economy Council (FEC), was speaking to reporters at a briefing on the country’s economic transformation efforts.
The FEC has been tasked with driving the growth and transformation of Singapore's economy for the future. Its mandate includes the implementation of the Committee on Future Economy’s recommendations, as well as the development and implementation of Industry Transformation Maps (ITMs).
Elaborating on the position that Singapore must take, Mr Heng said that he believes the “globalisation trend will continue” even with the risk of recent trade disputes between the US and China. “Singapore has established very good connections and linkages over the last 50 years to all the global centres … so we must maintain that advantage.”
Positive projections about Asia’s growth, in particular for China and Southeast Asia, also bode well for Singapore.
AdvertisementAdvertisementOn being a node for technology, innovation and enterprise, Mr Heng said: “The advances in tech will have a huge impact on many sectors and in turn, that is going to spur a lot of innovation.
“If we are able to develop our people to have the technological skill, innovation skill and enterprise skill; to be able to partner with key centres around the world, we will be in an extremely good position to grow the economy and create good jobs for the people.”
To achieve that next step, Mr Heng highlighted “three big elements” that will need to be in place.
Firstly, innovation will need to be made pervasive, which Mr Heng stressed will be a “key aspect of transforming the economy”. For this, the Finance Minister noted that there are ongoing efforts, such as investments in intellectual property (IP), research and development (R&D), the Maritime Transformation Programme and the National Robotics Programme.
Secondly, deep capabilities will need to be developed in local companies and workers. “The company is the basic engine of the economy … and developing our people is also critical,” said Mr Heng. “We want good growth and we want our enterprises to be more competitive because the ultimate aim is our workers can have deeper skills to take on better jobs.”
The third element is to build strong partnerships across Singapore, and with the country’s key partners in Asia and beyond, said Mr Heng.
“The value chain of any economic activity is no longer when one company can deal from A to Z, the value chain is more finely divided now,” he said. "Taking that integrated approach is going to be the key to our transformation.”
On that, Mr Heng noted that the Government has started clustering different industries under the ITMs into six clusters. Describing it as a “logical” move, he said the next phase is for authorities to “look at how we can maximise the synergy within the cluster and across the clusters”.
The six clusters are manufacturing, built environment, trade and connectivity, essential domestic services, and modern services and lifestyle.
Mr Heng revealed that more plans will be unveiled in the coming months on how each cluster can “bring together the elements of innovation, deep capability, internationalisation and strong partnership”.
GOOD PROGRESS, BUT UNEVEN
When asked about the progress of the economic transformation efforts so far, Mr Heng noted that progress has been good though uneven.
He noted that productivity has increased over the past two years, from 1.4 per cent in 2016 to 3.8 per cent last year, helped in part by the recovery in the global economy.
“It’s a good set of numbers,” Mr Heng said. “It shows that some of the efforts are paying off and we must make full use of this upswing to make all the changes that are necessary.”
However, the progress in the implementation of transformation plans has been uneven across sectors, said Mr Heng, citing the retail sector as one sector that has seen slower progress.
This boils down to the numbers, sizes and the levels of sophistication across companies in the sectors.
Moving forward, Mr Heng said that economic transformation is an “ongoing journey”.
“There is no end point,” he said. “We have gone through successive waves of changes because the global economy is changing by the day, technological advances are happening all the time so these external changes are changes that we must take into account in all that we do.
“If internally, we can stay cohesive (and) build on the strong partnership that we’ve had over the years and continue to deepen that, then I think we can ride these waves of changes smoothly,” he added.
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