Committee on the Future Economy outlines direction for Singapore's economic development

Committee on the Future Economy outlines direction for Singapore's economic development

In its report released on Thursday (Feb 9), the 30-member committee outlined seven strategies to develop Singapore's economy in the next decade.

02:50
In its report released on Thursday (Feb 9), the 30-member committee outlined seven strategies to develop Singapore's economy in the next decade.

SINGAPORE: The Committee on the Future Economy (CFE) tasked to set the direction for Singapore’s economic development released its report on Thursday (Feb 9), outlining seven strategies for the next decade.

Speaking at a press conference, co-chair of the 30-member CFE, Finance Minister Heng Swee Keat, described an "unprecedented level of change” the committee had to face when it began its work.

“The pace of change has also been hastened by technological breakthroughs and many of these changes are quite hard to predict with accuracy."

“What the CFE aims to do is to set out the direction and broad strategy rather than a detailed roadmap,” he said. “Because it is much harder to say with any certainty which sectors will do well. And the nature of the economy interactions are vast, complex and fast changing. ”

“So we have to develop the agility and adaptability to cope with change and to seize new opportunities. So to continue to make a good living, we must remain relevant to the world ... so our strategies for the recommendations ultimately revolve around this.”

The committee, which was convened in January 2016, held more than 80 discussions and focus groups, involving more than 1,000 students, educators, parents, union members, business leaders and academics. CFE members also joined in more than 20 panels, seminars and conferences, where they reached out to more than 6,000 people.

In a letter to the committee, Prime Minister Lee Hsien Loong said the Government has accepted the recommendations and will adopt a "hard-headed and pragmatic" approach in implementing them.

"SIGNIFICANT SHIFTS" IN EXTERNAL ENVIRONMENT

The report built on and updated the work of the Economic Strategies Committee, which released its report in 2010. But since then, there have been significant structural shifts, said the CFE in its report.

In setting the context for its recommendations, the CFE noted that growth around the world has been subdued. Global value chains are changing and new technologies can supplant entire industries, displacing workers even as new opportunities are created.

Most worrying, it said, is the “dark shift in mood” away from globalisation in 2016, citing protectionist policies growing in Europe and the US. “The anti-globalisation trend will undermine international trade, hurting all economies, but particularly small, open ones like Singapore.”

MANY OPPORTUNITIES FOR SINGAPORE

Nonetheless, despite the challenging global environment, the CFE said there are “many opportunities” for Singapore to innovate, deepen its capabilities, remain connected and stay relevant to the world.

There is strong potential in many Asian markets, it noted, and the US and Europe continue to have innovative companies and people. Singapore companies are also well-poised to tap into several growth sectors.

“In the future economy, our people should have deep skills and be learning throughout their lives; our businesses should be innovative and nimble; our city connected and vibrant, continually renewing itself; and our Government coordinated, inclusive and responsive,” said the CFE in the report.

To achieve this, it outlined seven mutually-reinforcing strategies in its report.

SEVEN STRATEGIES TO ACHIEVE ITS VISION

Foremost among the strategies is for Singapore to deepen and diversify its international connections, continue strengthening links with overseas partners and seek opportunities in new markets.

Under this strategy, the committee made three recommendations. It said Singapore should press on with trade and investment cooperationas well as reduce tariff and non-tariff barriers to trade through initiatives such as the ASEAN Economic Community and the Regional Comprehensive Economic Partnership.

As ASEAN chair next year, Singapore can also help advance economic integration with ASEAN and with the regional grouping's key partners.

The committee also recommended setting up a Global Innovation Alliance, where Institutes of Higher Learning (IHL) and companies can link up with overseas partners. One possible model for this is the NUS Overseas Colleges, which has links in the US, Europe and China.

“We should build on these links, involve more IHLs and expand our network in regional countries, so as to better expose our students to opportunities in Asia,” said the committee. “In addition, the Global Innovation Alliance can serve as welcome centres where Singapore-based enterprises and institutions can collaborate with overseas partners.”

In Singapore’s next phase of internationalisation, Singaporeans will also need to acquire deeper knowledge of regional markets, which the committee said can only be done by spending time in these markets. To that end, it suggested that potential corporate leaders be exposed to quality overseas assignments as part of the SkillsFuture Leadership Development Initiative.

For Singaporean parents who are thinking of taking on overseas assignments, the committee said more can be done to ease their concerns about their children's education. For example, online platforms can be used to help children stay in touch with the national curriculum, and facilitating their enrolment into the International Baccalaureate programme when they return to Singapore.

As part of the first strategy, the committee also suggested that Singapore encourage more specialised market research firms and consultancies to develop wider and deeper market knowledge of the region. More internationalisation programmes can also be developed for students to acquire Global-Asia market insights and immerse themselves in overseas markets, it added.

DEEP SKILLS NEEDED TO STAY RELEVANT

The call for workers to develop deep skills to stay relevant is not new to Singaporeans but an important one nonetheless as emphasised by the CFE.


Workers at a manufacturing facility in Singapore. (File photo: TODAY)

In its second strategy, the committee stressed the need to help Singaporeans build skills in a timely, accessible way through modularised programmes, and to strengthen the connection between skills acquisition and utilisation.

It is also important to deepen capabilities among Singapore’s businesses in light of growing competition. To that end, the committee’s third strategy is to strengthen enterprise capabilities to innovate and scale up.

Some recommendations include establishing commercially-oriented entities to better commercialise research findings and intellectual property among Singapore’s research institutions, and encouraging partnerships between large and small enterprises.

BUILD STRONG DIGITAL CAPABILITIES

In its report, the committee noted the impact of digitalisation - in creating new industries, transforming existing industries as seen in finance and healthcare, as well as offering businesses an effective means of reaching global markets.

Hence, the committee’s fourth strategy is to promote the use of digital technologies across all sectors of the economy. This includes helping small and medium enterprises (SMEs) adopt such technologies, as well as having national initiatives like the National Trade Platform and National Payments Council.

The committee also pointed out the need to build strong capabilities in areas like data analytics and cybersecurity. “Data will be an increasingly important source of comparative advantage and we need to improve our ability to use it productively in the economy,” it said in the report.

A VIBRANT, CONNECTED CITY OF OPPORTUNITY

Singapore’s capacity to flourish in the future global economy is tied to its ability to create opportunities, said the committee in outlining its fifth strategy. It said the city must be planned in a way which allows Singapore to be well-connected externally, with sufficient space to grow and rejuvenate internally.

This means Singapore should continue to plan boldly for city rejuvenation and develop ways to create new spaces, like expanding underground infrastructure, said the committee.

It also recommended that Singapore create dense clusters of mutually-reinforcing economic activities, where companies of different sizes are sited together to encourage partnerships. This could be done in places like Punggol and the Jurong Innovation District, which are next to universities, namely the Singapore Institute of Technology in Punggol and Nanyang Technological University in Jurong.

TRANSFORMATION MAPS TO HELP INDUSTRIES

To ensure that the strategies can come together coherently to meet the needs of Singapore’s industries, the CFE also recommended in its sixth strategy that Industry Transformation Maps (ITMs) be used as platforms for integrative planning and implementation.

The ITMs, which were first announced in Budget 2016, are already being implemented. By the end of FY2017, they will cover 23 industries and about 80 per cent of the economy.

The committee suggested that the early learning points from the first batch of ITMs be used to strengthen succeeding ones.

In its final strategy, the committee stressed the need for mutual trust and cooperation between trade associations and chambers, unions, enterprises and individuals.

It added that the Government will need to be nimbler in supporting the emergence of potentially-disruptive business activities. Some proposals include designing a regulatory environment that supports innovation and risk-taking, and streamlining its support schemes for enterprises.

All these efforts will allow Singapore to grow by 2-3 per cent per year on average, exceeding the performance of most advanced economies, said the CFE. "Together, we can build a value-creating economy that is open and connected to the world, offering a multitude of opportunities, with sustainable wage growth and meaningful careers for all Singaporeans."


Source: CNA/lc