Commentary: Singapore must send a bold signal to attract global talent
Singapore ranks highly in global talent competitiveness, but we cannot rest on our laurels, says NUS Business School’s Simon Poh.
SINGAPORE: “When it comes to top talent, we can never have enough.” In his National Day Rally speech on Sunday (Aug 21), Prime Minister Lee Hsien Loong drove home the importance for Singapore to attract and retain top talent and raise our global competitiveness in the post-pandemic era.
As the contest for global talent heats up, the challenge will be to stand out from the crowd to incentivise the best and the brightest for key growth sectors to come here.
We are not starting from ground zero. The 2021 Global Talent Competitiveness Index published by INSEAD ranks Singapore second, ahead of the United States and behind Switzerland.
While Singapore already has many conducive factors, we cannot rest on our laurels. What could we do more to attract more global talent here?
ATTRACTING THE RIGHT SKILL SETS
Should Singapore consider similar measures as those adopted by Germany and the United Kingdom, as Mr Lee cited?
Allowing skilled professionals to live in Singapore before getting a job certainly has its merits, and it is easy to implement, keeping in mind the pressure this group might exert on the housing and job market in competition with locals.
We already have schemes that do not require employment as a prerequisite, such as EDB’s Tech.Pass programme – targeted at attracting talent to start, join or otherwise contribute to the development of the local tech sector. The EntrePass is a work pass aimed at bringing entrepreneurs, innovators and investors with some enterprising track record to set up shop here.
But these could currently be too specific. We need to tap on more sectors with high growth potential and on individuals with coveted skills and ideas but not necessarily the track record in fast-moving fields.
We could stand to benefit more if these schemes are enhanced to attract more skill sets, such as in artificial intelligence, data science and analytics, digital and Internet marketing. These cut across industries, like fintech, biomedical and biotechnology, to name a few.
Granting special visas to graduates from reputable universities could also send a strong signal that Singapore is open to cultivating raw talent and innovative potential, and get them to think seriously about coming to Singapore.
INCOME TAX, A FACTOR?
For seasoned talent, another important factor could also be personal income tax rates, which are currently low by international standards.
Although the Government has announced an increase in the effective tax rates of higher-income individuals by introducing two new income tax bands (23 per cent after the first S$500,000 and 24 per cent in excess of S$1 million from the Year of Assessment 2024), this move will likely not significantly dent our overall competitiveness, as our overall personal tax burden remains low even after this minor tax hike.
So on this front, there is no merit in creating a differential tax rate to encourage them to relocate to Singapore.They may also be high-net-worth individuals (HNWIs) looking to set up family offices. Though the bar for tax breaks eligibility was recently raised by setting a minimum fund size of S$20 million within two years, this might have had the effect of increasing Singapore’s attractiveness as an investment destination among HNWIs.
A HUB OF INNOVATION, ENTREPRENEURSHIP AND GROWTH
The post-pandemic world presents a window of opportunity to bring more talent to Singapore. We already consistently score highly in factors like an excellent education system, political stability, global connectivity, rule of law and a safe country not just in respect of low crime rates but also one that is free from natural disasters.
Our handling of the pandemic has earned us international praise and provide investors with the added confidence of staying in Singapore. Even our investment pipeline has remained strong despite the pandemic.
Mr Lee said that the Government will soon announce initiatives to seriously compete for global talent.
Whatever form these may take, the crucial thing is that Singapore makes the first move to signal to the potential foreign talent that they are very welcome to join our community. We should be bold in recommending measures that will make them “sit up, pay attention”.
Ultimately, to create better jobs and more opportunities, it is clear that Singapore must “shine brightly as a hub of innovation, entrepreneurship and growth”.
Simon Poh is Associate Professor (Practice) of the Department of Accounting at NUS Business School where he specialises in tax matters.