Debate on President’s speech: Kenneth Tiong on why Singapore must build inherent capacity

For decades, Singapore’s prosperity has been built on attracting foreign direct investment - a model that served it well in a world of free trade. However, in a new era of geopolitical blocs and strategic industries, this dependence is a vulnerability, said MP Kenneth Tiong. He believes one of the most important economic questions for Singapore today is what it will take to build inherent capacity - a rooted, high-value, local base of companies and industries. Mr Tiong called for Singapore to champion the creation of new Airbus-style commercial consortiums with willing regional partners. Each of these, like Airbus, could become the principal client and industrial anchor for an entire ecosystem of SMEs. There would also have to be safeguards to make sure value flows down the value chain. Mr Tiong said the strategy should be modular, with the private sector increasingly taking over to scale up. He noted that the government would have to build inherent capacity and shape markets, but know when to step back and not compete directly with Singapore’s own SMEs. He spoke in parliament on Friday (Sep 26).