SINGAPORE: Singapore needs to remain connected with the world so as to prepare for its next stage of growth, and one way of doing so is to build up local talent with overseas market know-how to help companies venture abroad, said Trade and Industry Minister Chan Chun Sing on Monday (Mar 4).
More than 50 per cent of local enterprises have found it difficult to internationalise due to the lack of right talent for their overseas operations, he said during his ministry’s Committee of Supply debate.
“To address this, we need to build a pipeline of local talent with the requisite in-market knowledge to identify growth opportunities and navigate challenges in overseas markets."
The Global Ready Talent Programme – which will dish out funding support to companies for overseas internships and management associate programmes – hopes to plug this gap, said Mr Chan as he touched on the new initiative first announced by Finance Minister Heng Swee Keat during the Budget 2019 statement.
It will be administered by Enterprise Singapore and is set to be rolled out in the second quarter.
"We will focus on markets in Southeast Asia, China and India. Singapore enterprises can receive up to 70 per cent funding support for the allowance or salary of participants,” said the minister.
For students from Institutes of Technical Education, polytechnics and local universities who plan to take up overseas internships with Singapore firms, Enterprise Singapore and the institutes of higher learning will co-fund travel and subsistence allowances, according to MTI.
Enterprise Singapore will also fund up to 70 per cent of the students’ monthly stipends.
Apart from internships, the programme will also support home-grown firms to send their young workers on overseas postings. These workers, either fresh graduates or employees with less than three years of experience, must be posted overseas for at least a year.
Local enterprises will be eligible for funding of up to 70 per cent of qualifying costs, capped at S$50,000 per management associate per year, added MTI.
As part of promoting ideas and talents, Mr Chan said the Global Innovation Alliance initiative - which was launched in 2017 to strengthen Singapore’s connections to major innovation hubs around the world - will also be expanded this year.
“Companies invest in Singapore because we have access to talent, both local and global," he said.
"For Singapore to thrive, we will continue to develop our local talent, and welcome global talent, especially those with high-end digital and engineering skills, to complement our local workforce.”
ENHANCE TRADE NETWORK
Apart from such non-physical modes of connectivity, there is also the need for Singapore to enhance its network of trade agreements.
This includes the upgrading of trade pacts for deeper market access, updating rules on new business models and regulations, as well as expanding the country’s network of free trade agreements so that companies can gain access to more markets.
Mr Chan added that this also ensures a diversification of markets and supply chains, so that Singapore does not “overly rely on any one particular market”.
The landmark Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), for instance, entered into force last year and established Singapore's first FTA with Canada and Mexico.
Meanwhile, the EU-Singapore Free Trade Agreement and Investment Protection Agreement, which received the European Parliament’s consent last month, will bring Singapore "closer to an FTA" with its third-largest goods trading partner and largest services trading partner, said Mr Chan.
Pasir Ris-Punggol GRC MP Teo Ser Luck asked for quantifiable indicators of how local companies have benefited from these trade deals.
Mr Chan said firms here enjoyed tariff savings of about S$730 million in 2016, up from S$450 million a decade prior.
Since 2016, some 1,800 companies have also benefited each year from Enterprise Singapore’s efforts to drum up awareness of the trade agreements and its benefits.
“We will continue to work with the Singapore Business Federation and the Trade Associations and Chambers to help our companies utilise our wide network of FTAs,” the minister said.
Turning to Singapore's economic environment, Mr Chan noted that the local economy is expected to slow in 2019. Growth will be uneven as outward-oriented sectors moderate on the back of a weaker external outlook, while bright spots such as the information and communications sector hold up.
READ: After a ‘tale of two halves’ in 2018, Singapore’s growth outlook dims amid trade, global demand woes
Apart from near-term challenges that include global trade uncertainties and a slowing Chinese economy, Singapore also needs to keep an eye on medium-term and longer-term challenges.
These include shifts in global trade patterns, production chains and value chains brought about by technological changes and geopolitics, as well as developments in international taxation.
“Our future attractiveness as a choice business location will be shaped by the outcomes from ongoing discussions at international fora on base erosion and profit shifting and taxation principles for the digital economy."
Responding to a clarification from Aljunied GRC MP Low Thia Khiang on whether ongoing disputes with Malaysia could impact the Singapore economy, Mr Chan said Singapore continues to pursue “win-win” outcomes with its closest neighbor.
“Malaysia is part of the wider ASEAN economy and obviously, any uncertainties in the Malaysia economy will affect Singapore, just as it would affect the regional countries."
He added: “We ask and encourage our companies to diversify their sources, supply chains and markets. This is part of our wider strategy to make sure that we will never be held ransom by dependence on one particular market."