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Title : ESC proposes greater productivity and less dependence on foreign labour
By :
Date : 01 February 2010 1504 hrs (SST)
URL : http://www.channelnewsasia.com/stories/singaporelocalnews/view/1034494/1/.html
SINGAPORE: A high level committee has unveiled ambitious plans aimed at transforming Singapore's economy over the next decade.
The Economic Strategies Committee (ESC) on Monday offered several suggestions to make significant improvements in productivity in every sector of the country's economy so as to achieve productivity growth of two to three per cent a year over the next 10 years.
In its key recommendations to the government ahead of the Budget due on February 22, the ESC said that target will allow Singapore to grow its GDP by three to five per cent a year.
Productivity will therefore account for about two-thirds of the country's GDP growth, compared to just one-fifth in the past decade.
The priorities include boosting skills in every job, deepening corporate capabilities to seize opportunities in Asia and making Singapore a distinctive global city.
"Our assessment is that the next five to 10 years will provide greater opportunities for growth in the world around us than in any decade we have seen in the past," said chairman of the ESC, Tharman Shanmugaratnam.
"But at the same time we will also face greater constraints than we have had in the past. In particular, because of a slow-growing workforce; and over time too, because we'll have run up against the limits of our land."
He went on to say: "It will require a change in how we work, how we create value, and it will require that our companies expand overseas to make the most of opportunities that match their strengths."
The 25-member ESC, which took about eight months to come up with its comprehensive report, also recommended the setting up of a high-level national council to boost productivity, as well as a National Productivity Fund. The fund will provide grants to support initiatives to raise productivity.
At the same time, the committee also felt there is a need to expand the Continuing Training and Education scheme at all levels. The committee projects that at least 240,000 people will undergo the programme each year by 2015.
"We achieved one per cent in the last decade, we can achieve two to three per cent in the next decade. If we can raise productivity, we can raise income. We can raise incomes, adjusted for inflation, real incomes," said Mr Tharman.
According to the ESC chairman, through the moves, Singapore can grow individual workers' incomes, and in particular, focus on productivity, skills and innovation in each enterprise.
He added that it is the best way in which Singapore can ensure that those in the lower end of the skills band as well as those in the lower end of the income band can move up and it is the best way to ensure growth is inclusive in Singapore.
The ESC went on to recommend that Singapore manage its dependence on foreign workers, suggesting that levies on foreign workers be raised progressively, although it did not give a quantum for this.
Foreign workers now make up about a third of the total workforce. The committee said Singapore cannot increase the number of foreigner workers as liberally as it has done over the last decade due to "physical" and "social limits".
It said that being less dependent on such workers will also incentivise companies to improve productivity.
Nonetheless, the ESC recognises that it is critical for Singapore to continue attracting highly capable and entrepreneurial people from around the world to work here.
The proposed changes to the foreign worker levies should include greater differentiation between the skilled and the unskilled worker.
On the business front, sweeping measures to anchor Singapore as a Global-Asia Hub and strategies to build a vibrant and diverse corporate ecosystem were put forward.
While manufacturing remained a key sector, making up to 25 per cent of the economy, there is also a strong push to build Singapore into a trusted financial services hub and leading consumer business centre.
Companies in Singapore - big and small, local and foreign - should also form strong networks so they are inter-dependent on one another, the ESC recommended.
The target is to grow 1,000 Singapore enterprises with revenues of over S$100 million by 2020.
Innovation will also be driven by R&D and raise Singapore's gross expenditure in the area to 3.5 per cent of GDP by 2015. This will put Singapore on the level with developed countries like Finland, Sweden and Japan.
Also proposed are public-private co-investment funds of up to S$1.5 billion in the next ten years for growth-oriented SMEs based in Singapore.
The government will now review the recommendations of the ESC and it is expected to respond to the proposals during the Budget debate later in February.
- CNA
By :
Date : 01 February 2010 1504 hrs (SST)
URL : http://www.channelnewsasia.com/stories/singaporelocalnews/view/1034494/1/.html
SINGAPORE: A high level committee has unveiled ambitious plans aimed at transforming Singapore's economy over the next decade.
The Economic Strategies Committee (ESC) on Monday offered several suggestions to make significant improvements in productivity in every sector of the country's economy so as to achieve productivity growth of two to three per cent a year over the next 10 years.
In its key recommendations to the government ahead of the Budget due on February 22, the ESC said that target will allow Singapore to grow its GDP by three to five per cent a year.
Productivity will therefore account for about two-thirds of the country's GDP growth, compared to just one-fifth in the past decade.
The priorities include boosting skills in every job, deepening corporate capabilities to seize opportunities in Asia and making Singapore a distinctive global city.
"Our assessment is that the next five to 10 years will provide greater opportunities for growth in the world around us than in any decade we have seen in the past," said chairman of the ESC, Tharman Shanmugaratnam.
"But at the same time we will also face greater constraints than we have had in the past. In particular, because of a slow-growing workforce; and over time too, because we'll have run up against the limits of our land."
He went on to say: "It will require a change in how we work, how we create value, and it will require that our companies expand overseas to make the most of opportunities that match their strengths."
The 25-member ESC, which took about eight months to come up with its comprehensive report, also recommended the setting up of a high-level national council to boost productivity, as well as a National Productivity Fund. The fund will provide grants to support initiatives to raise productivity.
At the same time, the committee also felt there is a need to expand the Continuing Training and Education scheme at all levels. The committee projects that at least 240,000 people will undergo the programme each year by 2015.
"We achieved one per cent in the last decade, we can achieve two to three per cent in the next decade. If we can raise productivity, we can raise income. We can raise incomes, adjusted for inflation, real incomes," said Mr Tharman.
According to the ESC chairman, through the moves, Singapore can grow individual workers' incomes, and in particular, focus on productivity, skills and innovation in each enterprise.
He added that it is the best way in which Singapore can ensure that those in the lower end of the skills band as well as those in the lower end of the income band can move up and it is the best way to ensure growth is inclusive in Singapore.
The ESC went on to recommend that Singapore manage its dependence on foreign workers, suggesting that levies on foreign workers be raised progressively, although it did not give a quantum for this.
Foreign workers now make up about a third of the total workforce. The committee said Singapore cannot increase the number of foreigner workers as liberally as it has done over the last decade due to "physical" and "social limits".
It said that being less dependent on such workers will also incentivise companies to improve productivity.
Nonetheless, the ESC recognises that it is critical for Singapore to continue attracting highly capable and entrepreneurial people from around the world to work here.
The proposed changes to the foreign worker levies should include greater differentiation between the skilled and the unskilled worker.
On the business front, sweeping measures to anchor Singapore as a Global-Asia Hub and strategies to build a vibrant and diverse corporate ecosystem were put forward.
While manufacturing remained a key sector, making up to 25 per cent of the economy, there is also a strong push to build Singapore into a trusted financial services hub and leading consumer business centre.
Companies in Singapore - big and small, local and foreign - should also form strong networks so they are inter-dependent on one another, the ESC recommended.
The target is to grow 1,000 Singapore enterprises with revenues of over S$100 million by 2020.
Innovation will also be driven by R&D and raise Singapore's gross expenditure in the area to 3.5 per cent of GDP by 2015. This will put Singapore on the level with developed countries like Finland, Sweden and Japan.
Also proposed are public-private co-investment funds of up to S$1.5 billion in the next ten years for growth-oriented SMEs based in Singapore.
The government will now review the recommendations of the ESC and it is expected to respond to the proposals during the Budget debate later in February.
- CNA
