7 strategies to take Singapore forwardCFE stresses need to stay open and grasp new opportunitiesBy Zakir Hussain,
Political Editor, The Straits Times, 10 Feb 2017
Singapore must remain open and connected to the world, help its people acquire skills for jobs of the future, and ensure its companies scale up for a challenging climate through innovation and transformation.
This approach is at the heart of a masterplan unveiled yesterday to help the country navigate a more uncertain global environment in the next 10 years.
It outlines - in seven strategies - what the Government, people and companies have to do to stay nimble and adapt amid rapid technological change, subdued global growth and rising anti-globalisation.
The recommendations are spelt out in a109-page report put out by the 30-member Committee on the Future Economy (CFE) after 12 months of deliberations.
"We cannot know which industries will succeed. What we do know is that Singapore must stay open to trade, talent and ideas, and build deep capabilities," it said.
"By being innovative, bold and willing to change; by remaining open to the world, and deepening our knowledge of markets everywhere; our businesses and people can grasp the opportunities this new environment offers, and Singapore can continue to prosper."
The CFE held discussions with more than 9,000 stakeholders, studied global trends and re-examined the country's operating assumptions to chart the next phase of growth.
Its assessment: Singapore is in a strong position, with opportunities to innovate, upgrade and stay relevant. Asia is also a bright spot, with prospects in areas ranging from finance to logistics, healthcare and urban solutions.
The committee laid out seven strategies to maximise Singapore's chances of success and assure workers of sustainable wage growth and meaningful careers.
One, Singapore must deepen and diversify its connections abroad.Two, the country must build on SkillsFuture and support people acquiring and utilising deep skills.
Three, it needs to boost enterprise capabilities so that companies stay innovative and competitive.
Four, it needs to develop strong digital capabilities across all sectors of the economy.
To support these thrusts, the CFE called for three enabling strategies:
• Invest in infrastructure to build a vibrant, connected city.
• Adopt Industry Transformation Maps that tackle the needs of each sector and tap on synergies.
• Different groups, from trade bodies to unions, should work with one another to grow and innovate.
Finance Minister Heng Swee Keat, co-chairman of the CFE, said at a media conference yesterday: "What the CFE aims to do is to set out the direction and broad strategy rather than a detailed road map."
"We have to develop the agility and adaptability to cope with change and to seize new opportunities," Mr Heng added. The strategies build on existing initiatives, and among the new plans are a Global Innovation Alliance to link tertiary institutions and companies with overseas partners, and using national service to develop niche skills in cyber security.
Another key recommendation is for regulatory agencies to be more supportive of risk-taking.
Minister for Trade and Industry (Industry) S. Iswaran, the other CFE co-chairman, said a more uncertain environment also means that companies need to collaborate more among themselves and with the Government.
In a letter to the CFE co-chairs, Prime Minister Lee Hsien Loong said: "The Government has accepted the strategies proposed and will pursue all of them." "The report epitomises how, in Singapore, Government, businesses and workers tackle challenges and seize opportunities together," he added. "Now the hard work begins, and every Singaporean has a role."
Ministers will respond during the Budget and Committee of Supply debates starting later this month.
CFE report: Ability to execute proposed growth strategies is key, says S. IswaranFor vision to be realised, Govt and individual enterprises must shift mindsets, says ministerBy Royston Sim,
Assistant Political Editor, The Straits Times, 10 Feb 2017
While strategies to grow Singapore's economy have been set out, the key lies in executing those plans, said Trade and Industry (Industry) Minister S. Iswaran.
The high-powered committee, which Mr Iswaran co-chairs, yesterday unveiled seven strategies to drive economic growth in the next five to 10 years, from keeping the Republic open and connected to the world, to ensuring that workers acquire deeper skills.
Speaking at a media conference yesterday, Mr Iswaran said: "It is not just about the novelty of the ideas we come up with, but our ability to execute and achieve the outcomes we set out to achieve. And that is really going to be a key part of the work as we go forward."
He emphasised the need for the Government to collaborate with key partners, including trade associations, unions, businesses, workers and research institutions.
The ability to work together has been the "defining feature" of how Singapore has differentiated itself thus far, he added.
Finance Minister Heng Swee Keat, the other co-chairman, said the CFE aims to set out the direction and broad strategy for Singapore's future, rather than produce a detailed road map. This is because it is much harder to predict with certainty which sectors will do well, he said, given the complex and rapidly changing global environment.
The CFE's strategies thus revolve around developing "the agility and adaptability to cope with change and to seize new opportunities", Mr Heng said.
"This will prepare our businesses to create and seize opportunities from open and connected Singapore, create new ways for us to work together to transform and overcome challenges, and keep us relevant," he added. But for the committee's vision to be realised, both the Government and individual enterprises have to shift mindsets and be willing to bear more risk, Mr Iswaran said.
"We are going to have to be bold enough to try out new ideas. Some will succeed, some may not, in which case we will have to course-correct and be prepared to reallocate the resources to areas that work," he said.
The committee projects that its strategies will help Singapore's economy grow by 2 per cent to 3 per cent a year on average, which it said exceeds the performance of most advanced economies.
Asked why the expected gross domestic product growth is lower than the 3 per cent to 5 per cent target set in the 2010 Economic Strategies Committee report, Mr Heng said the global environment today is very different.
Growth has slowed throughout the world, he said, adding that the lower growth numbers also reflect slower workforce growth due to an ageing population.
Mr Iswaran said 2 per cent to 3 per cent growth is not unlike what other economies in a similar stage of development achieve.
"What we need to also look at is what it translates into in terms of career opportunities and wage progression possibilities for Singaporeans," he said.
"That is where our initiatives in terms of productivity and going more regional and therefore creating new and different kinds of jobs are going to be very relevant."
The SkillsFuture programme will help workers develop the capabilities needed to work abroad, he said.
Mr Heng noted that the CFE's recommendations are ultimately meant to prepare Singapore's people and businesses to navigate an uncharted path.
While doing so will not be easy, he said: "To be able to stay open and connected, and develop the deep capabilities both at an individual as well as corporate level, will help us ensure that we build good opportunities here."
The committee was also asked about how the Government balances the need for regulation and being open to technological disruption.
New laws were passed in Parliament earlier this week to regulate private-hire operators and make short-term home rentals illegal.
He said: "It is not about less but smarter, more effective regulation - regulations that are pro-business but at the same time balance the very legitimate needs of different stakeholders, including Singaporeans."
Committee on the Future Economy report: No magic bullet, but powerful weapons nonetheless
Seven sensible strategies play on Singapore's strengths, with collaboration a key factor
By Lee Su Shyan, Business Editor, The Straits Times, 10 Feb 2017
That there was no striking, big idea or bold buzzwords on how to remake the economy when the Committee on the Future Economy (CFE) unveiled its report yesterday may leave some underwhelmed.
For those in this camp, the culmination of a year's work by the CFE should manifest itself in a silver bullet, or a string of them, to cope with the disruption caused by a volatile economy and technological change.
The one word that captured the imagination back in the Economic Strategies Committee report in 2010 was "productivity". Yet, many would now argue that productivity is but just one of the many ingredients for success. Earlier reviews had thrown up strategies like the "go regional" push, or called for major policy changes, such as refining the Central Provident Fund system to boost competitiveness and spur growth.
Instead, the report spelt out seven sensible, if hardly surprising, strategies which play on Singapore's strengths and seek to up its game in these areas.
Indeed, in an age of disruption, it was prudent of the CFE not to be swayed by the darker mood of nativist politics and protectionist economics elsewhere in the world into deviating from what Singapore is good at.
For those hoping for the mother of all solutions to be revealed yesterday, realistically, it is difficult to move the needle on the economic front for a developed economy like Singapore's. The likes of a "Big Bang", for instance, when London's financial markets were deregulated on a single day in 1986, transforming the financial centre, are impossible to contemplate today.
As Finance Minister and co-chairman of the CFE Heng Swee Keat noted, the target of 2 per cent to 3 per cent gross domestic product growth annually is a respectable number compared with advanced economies, for instance.
The CFE report sets out what needs to be done for the next decade.
No doubt, the seven strategies have been articulated before, in some shape and form. They are now brought together in a comprehensive, coherent report, while recognising that the backdrop is one of change and uncertainty.
These are not just broad-brush strategies, but are backed by projects already in the works. The notion of connectivity will be demonstrated through the upcoming Terminal 5 at Changi Airport and the next-generation seaport at Tuas, for instance. Then there are the wide-ranging Industry Transformation Maps which aim to transform various sectors.
However, the report gave little emphasis on strengthening a sector that was once a darling - tourism, noted accounting firm KPMG.
Going by current trends, it could have been tempting to give a nod towards anti-globalisation sentiment. What stands out is that the report, in its first of seven strategies no less, calls attention to Singapore's support for free and open markets. The strategy says that the call of protectionism should be robustly resisted, adding that Singapore should strive to work with like-minded partners to advance the liberalisation of trade and investments.
The report makes clear that Singapore's success lies not with that one magic bullet, but is about leveraging strengths.
NOT JUST THE PLAN, BUT THE RESPONSE AND EXECUTION
During yesterday's press conference, Minister in the Prime Minister's Office Chan Chun Sing referred to the importance of executing plans well, but spoke of how, in an uncertain world, it was also important to build capabilities to ensure a better response.
There is a realisation that the current environment of uncertainty means that a strategy of picking winners consistently has about as good a chance as winning Toto. In that vein, it makes sense to give workers the deep skills and companies the support that allows them to adapt quickly and easily to different circumstances.
Key to the success of these strategies will be the notion of collaboration - a theme Mr Heng has articulated on many occasions.
The strength of a small country working together and being nimble should not be underestimated. If trade associations and chambers, unions, companies and individuals can come together, in an environment of trust created by the Government, as Mr Heng believes they can, Singapore will be much more than the sum of its parts.
The committee's job is done. For Singaporeans, the work is only beginning.
New chapter of the Singapore story: PM Lee
The Straits Times, 10 Feb 2017
PRIME MINISTER LEE HSIEN LOONG, in a letter to the co-chairmen of the Committee on the Future Economy, Minister for Finance Heng Swee Keat and Minister for Trade and Industry (Industry) S. Iswaran:
Thank you for your letter dated 7 February 2017, submitting the recommendations of the Committee on the Future Economy (CFE).
The world is going through a period of great uncertainty. Significant structural shifts are taking place in many countries. Industries and jobs are changing rapidly. Amidst the disruption, there will also be opportunities. We cannot be sure which industries will perish and which will flourish. What is certain is that Singapore must stay open to trade, people and ideas, and build deep capabilities so that our people and companies can seize the opportunities in the world.
The CFE has proposed a comprehensive set of recommendations to guide our economic strategy for the next five to 10 years. The Government accepts the strategies proposed and will pursue all of them. Ministers will provide a full response during the 2017 Budget Speech and Committee of Supply debates.
Developing the strategies is the first step. The strategies are our guide but what counts is how well we implement them to transform our economy. This will require difficult trade-offs as our resources are limited and we have to take calculated bets. We will take a hard-headed, pragmatic approach. When results are promising, we will vigorously pursue them. When a scheme does not look like it is going anywhere, we must have the courage to cut losses. That is how we progressed for the past 50 years and the only way to continue progressing in future.
On behalf of the Government, I wish to thank the members of the committee, the sub-committees and the working groups for all the hard work. This report epitomises how in Singapore, Government, businesses and workers tackle challenges and seize opportunities together. Its publication marks the beginning of another chapter of the Singapore story. Now the hard work begins, and every Singaporean has a role. Let us work together as one united people, to achieve success and prosperity for ourselves and our families.
Committee on the Future Economy report:
Strategy 1: Deepen and diversify our international connections
Singapore must deepen global links, press on with open tradeBy Wong Siew Ying, The Straits Times, 10 Feb 2017
Singapore must remain plugged into global trade and its people need to gain better knowledge of regional markets as the Republic embarks on the next phase of growth.
That is the thrust of a key strategy unveiled by the Committee on the Future Economy (CFE), tasked with charting the blueprint for the country's growth in the long run.
In its report released yesterday, the committee noted that as an open, trade-dependent economy, Singapore "must resist the threat of rising protectionism" amid current anti-globalisation sentiment.
Trade and Industry (Industry) Minister S. Iswaran, who co-chaired the committee, said: "Against this backdrop, what we feel is critical that we underscore and emphasise is Singapore's basic openness - openness to trade, openness to investments, openness to try and continue to maintain our connectivity to regional and global economies."
"We believe that this is the surest way to ensure we continue to create opportunities for our businesses and for our people."
Anti-globalisation sentiment has swept across Europe and the United States, with Britain voting to leave the European Union last year and President Donald Trump recently pulling the US out of the Trans-Pacific Partnership, an ambitious Pacific Rim free trade pact.
The CFE said Singapore must press on with trade and investment cooperation and seize opportunities in new markets.
One way is to continue to work at reducing trade tariffs and barriers through initiatives such as the Asean Economic Community and the Regional Comprehensive Economic Partnership.
As Asean chairman next year, Singapore can help to advance economic integration within the 10-member bloc and with its key partners.
"We also need to enhance our regional trade architecture to support digital businesses and data flows, such as developing mutual recognition of data protection standards," the report noted.
Analysts lauded the push for open trade as it remains a key contributor to Singapore's economy.
"The key challenge will be to convince other countries that Singapore can be a 'giver' as well as a 'taker', in terms of opening the market here for more foreign competition," said Mr Frank Debets, managing partner for Customs and international trade at PwC Worldtrade Management Services.
The committee said Singapore can draw on its experience in developing industrial parks and townships in China, India, Indonesia and Vietnam, to tap opportunities arising from growing demand for infrastructure and urban solutions in Asia. It can also collaborate with institutions such as the World Bank, Asian Development Bank and the Asian Infrastructure Investment Bank on development projects.
To tap advancing technology and rapid growth in Asia, it recommends setting up a Global Innovation Alliance - a network to promote innovation and harness new ideas.
It envisions Singapore tertiary institutions and companies linking up with overseas partners in major innovation hubs and in key markets.
This alliance can form "innovation launchpads" to foster cooperation between local and foreign start-ups, or serve as "welcome centres" where Singapore firms can work with overseas partners.
The idea builds on existing tie-ups - the National University of Singapore Overseas Colleges, for instance, already has links in the US, Europe and China.
"This has helped to groom fresh entrepreneurial talent and promising start-ups in Singapore, and the efforts should be expanded," the committee said.
As companies head abroad in search of opportunities, the committee said Singaporeans will need to acquire deeper knowledge of regional markets.
One way to encourage more people to take up overseas postings is to ease Singaporean parents' concerns about their children's education.
Suggestions include helping the children enrol in the International Baccalaureate programme to ensure continuity of learning when they return to Singapore.
The Education Ministry is also developing an online platform, Student Learning Space, to help overseas Singaporean students stay familiar with the national curriculum.
The report also recommends that research firms and consultancies develop deeper market knowledge of the region, and trade associations and economic agencies undertake more business study trips.
"A more nuanced understanding of Asia's different cultures and consumer preferences will strengthen the ability of Singapore-based companies to access regional opportunities," the committee said.
Strategy 2: Acquire and utilise deep skills
Panel suggests more modular courses to help workers reskill
By Joanna Seow, The Straits Times, 10 Feb 2017
As their jobs change, workers will constantly need new and deeper skills to cope. Modular courses could be one of the ways to enable them to keep pace as they enter a future that requires lifelong learning.
Helping workers acquire and use deep skills was one of the seven strategies spelt out by the Committee on the Future Economy (CFE) yesterday to prepare Singaporeans for upcoming challenges.
As technologies and jobs are likely to change at a faster pace, "we must go beyond the pursuit of the highest possible academic qualifications early in life, to seek knowledge, experience and skills throughout life", said its report.
The deep skills should also be relevant to workers' jobs, the CFE noted, while making a set of suggestions on how these could be acquired.
It acknowledged that there would be a challenge in acquiring such skills, as working adults would have to balance personal development with other priorities such as family and career. That is where modular courses could play a key role.
These courses are broken down into segments, making it easier for workers to learn at their own pace, hence offering greater flexibility to those juggling work and reskilling.
The panel wants the Government to work with training providers and institutes of higher learning to roll out more of such courses.
These programmes should be endorsed by companies and approved by the Education Ministry, and be accessible online, it said.
Skills training under different qualification frameworks should also be more integrated. For example, graduates of SkillsFuture Earn and Learn programmes could progress to applied degrees with relevant modules exempted.
Another set of recommendations the CFE made was on encouraging employers to develop staff.
The report highlighted the SkillsFuture TechSkills Accelerator, which helps infocomm technology professionals deepen their skills and workers from other industries pick up digital skills. It gets employers involved to offer on-the-job training and secondments, which ensure trainees pick up skills that are relevant to their work.
The committee suggested implementing parts of this model in other sectors. In the urban solutions growth cluster, for example, Singaporeans could take up place-and- train positions in law firms, engineering consultancies and multilateral development banks. They could later be given project structuring roles in these banks and in advisory firms.
The committee also recommended improving companies' leadership and human resource management capabilities.
The Government could even give companies preferential treatment for some schemes if they use skills- and competency-based HR systems to hire and promote staff.
Finally, the committee highlighted the need to support workers.
Job seekers with the right skills may still miss good opportunities because of a lack of information.
To minimise this, the Government should make the National Jobs Bank more useful and user- friendly, the report said.
New opportunities for contract and freelance workers should be embraced as part of an innovative and entrepreneurial economy, and these workers should be supported in their retirement adequacy.
People who have been unemployed for a long time, older workers and people with disabilities could also use more help. "Everyone has a role to play, but we should pay special attention to workers who may face more challenges in this environment," the report said.
The committee recommended having more professional conversion programmes to enable older job seekers to pick up new skills and switch to growth sectors, appointing more institutions to provide job-matching services, and improving support schemes for low-wage workers.
Minister for Finance and CFE co-chairman Heng Swee Keat said at a press conference yesterday that developing Singapore's workforce will help the country stay relevant to the world. He said: "This has just been ignited with SkillsFuture to support lifelong learning.
"The CFE recommendations take it further, to also focus on skills utilisation, meaning it is not just about acquiring skills, but also using those skills on the job effectively."
Strategy 3: Strengthen enterprise capabilities to innovate, scale up
Boost IP regime, start-up ecosystem and fund-raising options
By Chia Yan Min, Economics Correspondent, The Straits Times, 10 Feb 2017
A stronger intellectual property regime, a more vibrant start-up ecosystem and a wider variety of fundraising options for high-growth companies.
These are some essential ingredients to make Singapore a choice location for innovative companies developing products and solutions for the world, according to the Committee on the Future Economy (CFE).
"Our economy is only as strong and resilient as each of our enterprises can be competitive," the committee noted, adding that this effort requires government agencies, industry and other stakeholders to work together to build an ecosystem for innovation and enterprise growth.
The committee made a number of key recommendations aimed at developing the innovation ecosystem.
First, it suggested that Singapore's intellectual property (IP) regime be strengthened to help enterprises commercialise research findings and IP from research institutions.
This includes growing the community of IP and commercialisation experts and developing a standardised IP protocol to be adopted by all public agencies and publicly funded research entities - such as the Agency for Science, Technology and Research institutes, autonomous universities and hospitals.
"We are starting from a position of strength. We already have a critical mass of high-tech sectors in Singapore, a vibrant start-up and financing ecosystem, world-renowned universities and research institutions, and a strong global pool of research scientists and engineers," the report noted.
The committee also called for further boosts to the start-up ecosystem by enhancing mentorship, helping to raise the profile of Singapore start-ups and expanding the entrepreneurial pipeline.
This means remaining open to entrepreneurial talent from around the world, and facilitating mentorship and networking within the start-up community so that experienced individuals can work with up-and-coming entrepreneurs.
Ultimately, Singapore needs to be more open to change and risk-taking in order to survive in a world where disruption has become the norm, said Trade and Industry (Industry) Minister S. Iswaran.
Mr Iswaran, co-chairman of the CFE, added that the Government, enterprises and individuals cannot become "ossified in their position". "We must be prepared to learn from (failure), learn to fail fast, fail smart and recalibrate," he said.
The CFE also made recommendations aimed at helping companies to scale up. These included a call for deeper collaboration between large and small enterprises, for instance, through corporate venture funds.
The panel also suggested that high-growth enterprises receive more dedicated and customised help when venturing abroad, as well as more support for raising capital.
"For enterprises based here to scale up, more smart and patient growth capital - long-term capital which brings along ideas and expertise - is needed," the report said.
"We should encourage a variety of private-sector funding sources, including banks, venture capital funds and private equity funds. Where appropriate, the Government can partner these funds to invest for growth."
A simpler regulatory framework for venture capital firms would help boost the ecosystem here, the committee said, adding that the Government should look into encouraging more private equity firms to invest growth capital in Singapore-based companies looking to regionalise.
The committee suggested a private market platform for Asian enterprises to access financing from a wider network of investors.
It also said that the Government should permit dual-class share structures for listed companies, while instituting safeguards to promote market transparency and mitigate governance risks.
The sum of all these efforts should create a "strong base of globally competitive enterprises", which will in turn "support our economy to grow and create good jobs".
An integrated ecosystem supporting innovative growth companies from the start-up phase to late-stage growth is critical in strengthening the capital market, said Dr Steven Fang, chief executive of CapBridge, an online platform that allows companies to raise capital from a global pool of investors.
"While ample funding for early-stage start-ups is important, it is equally critical to have funds for late-stage enterprises, and here is where we see the gap," he added.
Strategy 4: Build strong digital capabilities
Singapore growth depends on strong digital capabilities
By Irene Tham, Tech Editor, The Straits Times, 10 Feb 2017
Singapore's economy must be built on strong digital capabilities to continue to grow in the long term.
This is one of seven broad recommendations outlined in the Committee on the Future Economy (CFE) report released yesterday.
The report comes after one year of consulting with 9,000 stakeholders, including trade associations, public agencies, unions, companies, academics and students.
The committee said that small and medium-sized enterprises across all sectors - which form the bulk of companies here - must automate for productivity gains.
"Building on our smart nation vision, we can tap the economic opportunities offered by the digital economy," the committee said in its report.
The 30-member committee said that national initiatives such as the National Trade Platform and the National Payments Council could accelerate the pace of adoption.
The National Trade Platform is a new trade management system to enable electronic data sharing among businesses, and between businesses and the Government. The National Payments Council is a new body to promote common e-payment standards.
Minister in the Prime Minister's Office Chan Chun Sing said during a press conference yesterday that data can help Singapore transcend its resource limitations.
"Digitalisation offers businesses, including the smaller ones, an effective means to reach out to global markets and ride on the Singapore brand of trust and efficiency," he said.
Beyond automation, companies also need to develop capabilities in data analytics to turn the wealth of data in their possession into an asset.
"Data will be an increasingly important source of comparative advantage and we need to improve our ability to use it productively in the economy," the report noted.
The committee recommended that the Government create a dedicated programme office to help companies turn their data into an asset.
Among other things, the office can co-develop flagship data science projects with companies to inspire others to do the same.
The committee cited ride-hailing app makers Uber and Grab as examples of new businesses that came out from data science projects.
Specifically, the apps match commuters with drivers, and accurately predict how soon a ride will be available. They also allow commuters heading towards the same direction to share rides.
To train data scientists for this purpose, the committee suggested that the Government build joint laboratories with companies. Such partnerships can also promote innovation.
Recognising that cyber security underpins the data science projects, economic growth and national security, the committee also recommended that full-time national servicemen be trained to develop niche skills in cyber security.
"Singapore should also attract and anchor vanguard technology firms in niche cyber security segments where we can develop global leadership, and facilitate partnerships with users as well as local solution providers to create best-in-class solutions," the report said.
Strategy 5: Develop a vibrant and connected city of opportunity
Creating a well connected Singapore physically and digitally
By Charissa Yong, The Straits Times, 10 Feb 2017
The Orchard Road shopping belt could be transformed into a place with more cultural performances and regular programmes, wider walkways and more sheltered paths, if a recommendation by the Committee on the Future Economy (CFE) becomes reality.
This is part of a broad strategy to create a vibrant city that is full of opportunities and is well connected to the rest of the world.
This is "connected", both in the catchphrase digital sense of the word, and physically - for example, the CFE said one way of being well connected globally is by improving Singapore's air, land, sea and digital links with other countries.
All this is to help grow Singapore's economy in the long term. The committee said in its report released yesterday: "Cities are the economic drivers of the future.
"Singapore's capacity to flourish in the future global economy is tied to the city state's ability to attract and create opportunities."
The report set out four main ways to make Singapore a vibrant city.
First, improve connectivity.
This involves building new airport and port infrastructure to strengthen Singapore's position as a global air and sea hub. The CFE encouraged the development of Changi Airport's new mega passenger terminal, Terminal 5, and its addition of a third runway, and suggested the progressive upgrading of the other two terminals.
The upcoming port in Tuas and the Kuala Lumpur-Singapore High Speed Rail will also better link Singapore with other countries.
Singapore should also invest in digital communications infrastructure to improve its digital connectivity, both within the country and with the rest of the world.
Minister in the Prime Minister's Office Chan Chun Sing, who co-chaired the sub-committee on connectivity, said Singapore can overcome its limited resources and geographical location if it uses data well. For example, companies in the digital sectors can expand overseas.
Minister for Trade and Industry (Industry) S. Iswaran, the CFE's co-chair, said: "The smallest enterprise can reach the furthest markets through the digital economy."
Second, being bold in urban planning and land use can help Singapore overcome its small size.
The committee urged the Government to be creative in the use of space, including locating bus interchanges and electrical substations underground and building multi-purpose floating platforms.
Minister for National Development Lawrence Wong, co-chair of the sub-group on city planning, said there will be more detailed planning of the underground. But he added: "We are not building another underground Singapore, so we have to be selective and focus on areas that make sense, like utilities."
The CFE also suggested more multi-level, specialised places with shared facilities, like the JTC Chemicals Hub, where chemical companies carry out manufacturing and distribution all in one place.
Another idea is to create an urban logistics system, including the roll-out of a nationwide locker system and logistics networks in new industrial estates.
Third, improve the lifestyle destinations and arts and culture scene.
For instance, Orchard Road could be spruced up amid competition from suburban malls and online shops to offer "a signature street experience in a city garden". The CFE suggested the private sector work with the Government to upgrade the shopping belt in an intensive street transformation programme.
Jurong Lake District could also be developed into a "livelier second Central Business District".
The committee also recommended locating related economic activities close to one another. For example, Punggol, where the Singapore Institute of Technology is located, could become the place for businesses in the digital, infocomm technology and cyber security fields.
More workspaces for start-ups should also be created, and industrial spaces should be used for a greater range of purposes.
Fourth, Singapore can be a "living lab" for urban solutions that can be exported to the rest of the world.
The Government could help more Singapore-based firms in this area by setting aside zones where they can test and refine their products.
The committee suggested that Singapore experiment with new forms of transport such as electrical, hydrogen and self-driving vehicles, and embrace them if they become technically and commercially viable.
Singapore should also ramp up its use of solar energy and invest more in research and development of energy storage, as well as use energy more efficiently.
The report said: "We should be bold enough to do things differently from other cities."
Strategy 6: Develop and implement Industry Transformation Maps
Adopt cluster approach to foster synergies across industriesBy Jacqueline Woo, The Straits Times, 10 Feb 2017
The development of Industry Transformation Maps (ITMs) will play a key role in positioning Singapore's economy for the future, said the Committee on the Future Economy.
The ITMs, which are blueprints to strengthen local industries, are part of a $4.5 billion programme announced in the 2016 Budget to promote growth, help companies become more competitive and create good jobs in 23 sectors.
The committee said in its report that the ITMs can be improved by adopting a cluster approach "to foster synergies across industries, not just within industries".
It noted that there is potential to develop a ready pool of skilled workers who can take up jobs within various industries that require similar skills, such as food services and hospitality industries.
Precision engineering firms, too, could become more competitive with support from companies within other manufacturing sectors, such as aerospace.
"As we launch more ITMs, we can begin to organise related ITMs on a cluster basis, where the transformation of one industry can have positive spillover effects on the other," said the committee. "These should be reviewed regularly to ensure that the industries and clusters remain relevant."
The committee also noted that it is important to move in step with changing industry configurations. For example, wearable technologies are an industry in themselves, yet they also bring together the fashion and healthcare industries.
"New industries that do not fit into existing classifications will emerge. When they do, we should facilitate, not impede, such developments."
Six ITMs have been rolled out so far - in retail, food services, hotels, precision engineering, logistics and food manufacturing. The remaining 17 are slated to be launched by the end of this year.
Together, the road maps will cover about 80 per cent of the economy.
The committee said the road maps should continue to be customised to suit the needs of each industry, rather than take a one-size-fits-all approach, given that different industries have different challenges and opportunities.
It said: "As markets and technologies change, each industry will need to react differently. We should continue to adopt a tailored approach for each industry, so we are focused on where the potential can be best realised in each case."
It noted that road maps for industries with good growth prospects will help companies upgrade their capabilities to seize new opportunities and create good jobs.
The logistics industry, for example, is positioned to tap Asia's rising middle class and the growth of e-commerce.
"The logistics ITM will support companies to leverage technology and adopt best-in-class supply chain practices. In addition, the logistics industry skills framework will support Singaporeans to upgrade their skills and take on jobs in this sector," the committee said.
Other industries that require large numbers of low-skilled workers will have to ramp up productivity and upgrade their jobs.
The road map for the retail industry, which is facing disruption from e-commerce players, will encourage productivity growth through the use of innovative business formats and technology, said the committee. These could include storefront self-checkout and cash management, as well as backend shared logistics services such as self-collection lockers.
The committee noted that retail jobs can also be redesigned to make them more attractive to Singaporeans, while retail enterprises can acquire new capabilities to broaden their customer base.
The committee added that the road maps, as a whole, should be used to integrate planning and implementation to ensure all of the strategies can come together in a coherent way to meet the needs of Singapore's diverse industries.
"Our approach is not to pick winners, but to build capabilities to give our enterprises and workers the best chance of succeeding in the open market," it said.
"While some enterprises will succeed, others that are slow to adapt will not, and we should accept this."
Strategy 7: Partner one another to enable growth and innovation
Firms, workers, unions and Govt must strengthen partnerships
By Yasmine Yahya, Assistant Business Editor, The Straits Times, 10 Feb 2017
The Government could spur innovation among local firms by issuing challenges to solve specific problems, while unions should do more to help workers retrain.
These were just a few of the various recommendations made by the Committee on the Future Economy (CFE) yesterday as it encouraged everyone, from workers to the Government, to strengthen their partnerships to ensure continued growth and innovation in Singapore in the years to come.
"Our path ahead is uncharted. Unpredictable economic, technological and geo-political changes are affecting life and business in every country, and will require each of us to rediscover our place in and value to the world," the committee said.
And that journey of rediscovery will require Singaporeans to take ownership for acquiring, developing and using their skills, while companies must seize opportunities and build capabilities, it added.
Meanwhile, trade associations and chambers should seek shared solutions for their members and lead sector-level initiatives.
A good example, the committee noted, was one set by the Singapore Manufacturing Federation, which formed a collaboration with several partners to set up an Enterprise Europe Network Singapore Centre.
Launched last year, the centre facilitates Singapore companies' access to technological know-how, intellectual property and partnership opportunities within Europe.
Unions, too, have a vital role to play in Singapore's future and must continue to encourage and help Singaporeans prepare for the jobs of the future, the committee said.
For example, they could work with the Government to place workers in new jobs, particularly the most vulnerable, suss out market needs and help their members develop relevant skills.
Meanwhile, the Government has to face the future by creating a regulatory environment that supports innovation and risk-taking, the committee said.
This means regulating in a "forward-looking manner". For example, identifying and focusing on areas with high potential for technological and industry innovation, where regulation needs to keep pace.
National Development Minister Lawrence Wong, a committee member, said supporting innovation does not mean the Government will implement fewer or no regulations on new and disruptive industries.
"It is not about less but smarter, more effective regulation - regulations that are pro-business but at the same time balance the very legitimate needs of different stakeholders, including Singaporeans."
The head of the School of Engineering and Technology at PSB Academy, Dr Liau Vui Kien, noted that this will be no mean feat.
"In spite of accelerations in technology developments, scientific breakthroughs and disruptive platforms... Singapore's limitation as a small nation with a finite labour and market size places it in an uncertain, often reactionary position," he said. "We will have to examine the pros and cons, find the right balance between regulation and innovation to facilitate the growth of these technologies."
The Government should also develop a greater capacity in the public service to encourage innovations, the committee said, noting some agencies have already led the way, such as the Monetary Authority of Singapore, which has facilitated innovation while regulating the emerging financial technology sector.
The Government could also support innovation through procurement, the committee noted.
"The Government should consider using lead demand more systematically to support the development of promising industries, especially where this coincides with our own strategic national needs."
And so the Government could issue public sector challenges to encourage firms to explore, pilot and co-develop innovative solutions to specific problems, and set aside resources, such as manpower and funding, to spur innovation procurement. It could also expand accreditation schemes to support promising and innovative start-ups and small and medium-sized enterprises to overcome the lack of track record in some cases, and build trust in our enterprises.
In order to keep encouraging effort and enterprise and creating good jobs in the years to come, the committee also said Singapore's tax system would have to be reshaped.
"Going forward, domestic and global changes will require us to review and refine our tax policies. These include rising social expenditure needs due to ageing, and growing momentum for international tax developments."
Even so, the committee called on the Government to maintain a tax regime that is broad-based, progressive and fair, while remaining competitive and pro-growth.
Finally, as Singapore's economy grows, the Government should not overlook the quality of the environment, the committee said.
"We need to be good stewards of our precious physical resources, so that we can maintain a high quality living environment in Singapore for generations to come."
CFE distinct from earlier committeesBy Tham Yuen-C, The Straits Times, 10 Feb 2017
The Committee on the Future Economy (CFE) is the fourth economic review committee in 30 years, and was convened in January last year to come up with strategies for Singapore's economic growth over the next 10 years.
Unlike earlier committees, it was not formed in response to an economic recession.
As Finance Minister Heng Swee Keat, who co-chairs the committee with Trade and Industry (Industry) Minister S. Iswaran, put it yesterday: "CFE was not started because there were some major events...
"It is our effort to position ourselves for the medium term to always look ahead of the changes that are happening and see what we can do and what we can do differently in order to adjust to those changes."
The work of the CFE, coming at a time when Singapore's economy is growing between 1 per cent and 2 per cent, sets out "the direction and the broad strategy rather than a detailed road map", Mr Heng said.
The 30-member committee held more than 80 focus group sessions, panel discussions, seminars and conferences.
It reached out to more than 9,000 stakeholders, including trade associations and chambers of commerce, public agencies, unions, companies, executives, workers, academics, educators and students.
After more than a year of discussions and deliberations, it produced a 109-page report that laid out a vision of what Singapore can be if the Government, businesses and workers team up to face challenges and seize opportunities.
The committee recommended seven broad strategies, from improving Singapore's global connectivity to helping workers deepen their skills and boosting innovation in home- grown companies.
This builds on the work of the previous committees: The 1986 Economic Committee, the 2001 Economic Review Committee (ERC) and the 2009 Economic Strategies Committee (ESC).
The first committee was formed after Singapore was hit by a recession in 1985. The ERC came shortly after the 2001 dot.com bust and just before the 2002 SARS outbreak, while the ESC was a response to the global financial crisis from 2007 to 2009.
The focus of the past three committees was on immediate measures to lift the economy out of recession, even as they kept an eye on the future.
"In every phase of our development, from Third World to First, we have progressed by building on our existing strengths, growing new capabilities and shifting away from activities that were no longer viable," the CFE said in its report.
No silver bullet, but CFE's broad approach is needed: ObserversSome find report on economy underwhelming, but others say strategies reflect era of changeBy Pearl Lee, The Straits Times, 11 Feb 2017
Remarkably far-sighted, or not far enough? Some have criticised the report by the Committee on the Future Economy (CFE) for lacking a "silver bullet" solution, unlike previous strategic reviews.
But others argue that in an unprecedented era of disruption, the CFE's multi-pronged, broad approach, covering many bases, is exactly what is needed. In fact, the "silver bullet" approach may no longer work in current times, MPs and observers interviewed yesterday said.
"Things are changing so quickly now that the most important thing is to be nimble and connected," said MP Saktiandi Supaat, a member of the main CFE committee. "This is no longer like the past, where we went for export-oriented growth and bet on manufacturing and pharmaceuticals."
Mr Liang Eng Hwa, who chairs the Government Parliamentary Committee (GPC) for Finance and Trade and Industry, said the report may not have been ground-breaking in the traditional sense, but "broke new ground in showing how we should build up our enablers to get the economy ready for the future".
The economic landscape is highly volatile and there is no telling what the next big thing will be, he said, adding: "We can't say for sure the big areas we should go into. But we can ensure that we are ready to deal with volatility and change."
This means firms have to be prepared to venture abroad, workers must build deep skills and industries need to develop digital capabilities.
In its report released on Thursday, the CFE urged Singaporeans to expand connections abroad, continue to build deep skills and use them well. It also encouraged firms to stay innovative and competitive by boosting enterprise capabilities, and to develop strong digital capabilities.
Past economic committees were formed in response to downturns, with reports focusing on immediate measures and restructuring efforts.
However, the CFE's report sets out "the direction and the broad strategy rather than a detailed road map", said Finance Minister and CFE co-chairman Heng Swee Keat.
Still, several observers felt the report was underwhelming.
One was Mr Devadas Krishnadas, chief executive of management consultancy Future-Moves Group, who wrote on Facebook that the report should not be "about how many more planning activities need to be undertaken".The report, he felt, "continues to reflect a belief system that command planning the economy is still the critical success factor and that generating a plan and achieving a result are synonymous". "The Government does not create jobs or value-added. Only the private economy does.
"We should be thinking in terms of what the Government, and only the Government, can and should do, which are areas of co-creation between the Government and the private economy, and where the private economy should be left to do its thing," Mr Devadas wrote.
But OCBC economist Selena Ling said the broad-based nature of the report shows the Government wants to focus on being a facilitator and an enabler, while allowing the private sector to carve the way forward. She said: "If we want to move towards being a more entrepreneurial and innovative society, it can't be the Government dictating where we should go and what we should do."
The CFE also made little mention of foreign manpower. Minister for Trade and Industry (Industry) S. Iswaran, the CFE co-chair, had said Singapore remains open to foreign talent, but has to strike a balance between growing the economy and the population's needs.
Said Mr Cedric Foo, deputy chairman of the GPC for Finance and Trade and Industry: "Based on current trends, we can plot what our society will possibly look like in the future. It is the responsibility of the leadership to provide a destination people can rally around.
"The CFE comes in with the tactics for us to get to that destination."
Regulations essential to support innovation, say analysts
By Yasmine Yahya, Assistant Business Editor, The Straits Times, 11 Feb 2017
It may not have been the sexiest line in the report, but a recommendation by the Committee on the Future Economy (CFE) for more "forward- looking" regulations could be a game changer for the Singapore economy, experts said.
The committee called on the Government to "create a regulatory environment to support innovation and risk-taking".
This, it added, means placing safeguards against the risks inherent in new industries while still enhancing the ease of doing business.
This may sound contradictory, but Professor Wong Poh Kam of the Department of Strategy and Policy at the National University of Singapore Business School said regulations are essential for innovation.
"You need regulations to ensure a level playing field for new innovators versus incumbents that are large and powerful organisations, or you may have big companies abusing their power to squeeze start-ups out of the field," he noted.
"Also, regulations provide innovators with the certainty of parameters. Without regulations, companies sometimes don't feel confident to innovate, for fear that there will be a sudden implementation of rules that could land them in trouble."
The trick is to have balanced regulations, noted Maybank Kim Eng economist Chua Hak Bin. He said: "Various governments have arrived at different outcomes on how to regulate Airbnb, for example. Barcelona, for example, has an outright ban. The CFE is recommending a more balanced and pragmatic approach, especially since we are encouraging businesses to use Singapore as a test-bed for new ideas."
PwC Singapore's digital business leader Greg Unsworth said that if this fine balance is struck, it would really set Singapore apart from other leading economies and position the Republic as a global hub for innovation.
He noted, however, that this will be no small task.
"It is extremely difficult to regulate for the future. Governments around the world have found it challenging to keep up with the speed of the impact of industry disruption in the digital economy," he said.
"This is about ensuring smart regulation that meets both objectives and keeps pace with change and even anticipates the future."
However, experts are also confident that the Singapore Government is in a good position to embark on such a challenge.
After all, some of its agencies have already begun regulating new and disruptive industries, such as the Monetary Authority of Singapore (MAS) for financial technology or fintech, and the Land Transport Authority for autonomous vehicles - a point that the CFE noted in its report.
For MAS, a major component of its regulatory system towards fintech has been the "regulatory sandbox". It provides a safe space where Singapore's banks can experiment with and test new technology, without potentially affecting their main operations or customers, even if the project fails.
However, Mr Matt Pollins, a partner of technology law firm Olswang, said that there is no reason why sandboxes cannot be used across all industries.
"Sandboxes are just the start," he said. "Over time, we will see many more technology-friendly regulations, and not just in limited sandbox scenarios, that empower organisations to innovate - provided, of course, that appropriate measures are in place on matters such as privacy and security."
After all, he added, regulators around the world are recognising that the definition of risk has changed.
Mr Pollins said: "Risk used to be doing something new, or adopting a new technology. In this era of digital transformation, risk is now standing still and not adopting new technologies, because companies will very quickly be overtaken."
Committee on Future Economy report: Experts laud idea of using NS to boost cyber skills
By Irene Tham, Tech Editor, The Straits Times, 11 Feb 2017
Cyber security experts have given the thumbs-up to a recommendation by the Committee on the Future Economy (CFE) to use national service to train army personnel in cyber security skills to prepare for the digital future.
They said the approach takes a leaf from Israel's book, with a potential to develop Singapore's own cyber security start-ups to plug talent gaps and defend the country against cyber attacks.
The 30-member committee released its report on Thursday after a year of consulting 9,000 stakeholders - including trade associations, public agencies and companies - on ways to grow and protect Singapore's economy.
Mr Aloysius Cheang, executive vice-president of global computing security association Cloud Security Alliance, said: "Training in cyber warfare in the army will provide the new workforce with niche skills that are way more advanced than those of your typical systems administrator."
These skills include offensive tactics to cripple rivals' critical systems, and defusing cyber bombs such as malware and spyware.
"Singapore's future cyber security start-ups could come from its armed forces," said Mr Cheang.
For instance, Israeli cyber security software firm Check Point Software Technologies' three co- founders were in the Israeli army's elite intelligence unit before starting the company in 1993.
Israel's strength in cyber warfare is well known, with military experience playing a key role. The small country is also one of the world's largest exporters of cyber security products and services - second only to the United States.
Mr Benjamin Ang, coordinator of the Cybersecurity Programme at the Centre of Excellence for National Security at the S. Rajaratnam School of International Studies, said: "Singapore should learn from those that have successfully used their national service programmes to develop young talent."
Mr Clement Lee, security architect for Asia, Middle East and Africa at Check Point, said the recommendation is "a good move" amid rising cyber threats and the severe lack of security professionals globally.
Mr Clement Teo, principal analyst at market research firm Ovum, said that Singapore's Smart Nation initiative has made it even more urgent now to step up on developing the country's in-house talent. "We can't outsource the nation's cyber defence to third parties," he said.
Meanwhile, Mr Jeffrey Kok, CyberArk's director of Asia-Pacific and Japan, said that cyber security training is "a natural extension" of NS to protect Singapore's assets.
The Singapore Government, which accepted the CFE's recommendation, will discuss ways to implement the idea during the Budget and Committee of Supply debates starting later this month.
Centre of Excellence for National Security's Mr Ang said that for the idea to work, the Singapore army also needs to mentor its elite cyber soldiers to become team players and leaders. Being the brightest academically is not enough.
Mr Daljit Sall, director of human resources firm Randstad Technologies Singapore, said that the firm has seen a 35 per cent increase in demand for cyber security professionals over the past year.
CFE hits most of the right notes
Its proposals are ambitious and far-reaching, but social policies should also be part of the blueprint
By Vikram Khanna, Published The Straits Times, 11 Feb 2017
Look at the age we live in. A computer can beat the world champion at chess, backgammon and Go. Cars can drive themselves. Humanoid robots can successfully counsel autistic children. Data analytics can predict the risk of diseases in entire populations. Having a job can mean performing tasks for multiple employers that change all the time. Start-up companies armed with digital technologies can destroy the business models of 100-year-old corporations. Companies with no physical assets to speak of can dominate entire industries that abound in physical assets.
This is the world that the Committee on the Future Economy (CFE) is looking to help us navigate, and its report comes not a moment too soon. It also comes at an ominous time, when the system of liberal global trade is under threat.
The CFE report sets out some ambitious objectives: We need to deepen and diversify our international connections; acquire and use new skills; help companies innovate, transform and scale up; build and adopt digital capabilities; develop an urban infrastructure for the future; and forge partnerships - internally and externally - to foster innovation and growth. This is a wide-ranging list. In many of these areas, the report's proposals are sensible and imaginative - as with the novel and intriguing ideas to build "a global innovation alliance" and develop joint labs for data analytics with industry players. Even if a few of its recommendations are put into practice, the result would be transformational.
The CFE's emphasis on the need to focus more on Asian economies is particularly important. Asia is, and for the foreseeable future will remain, the world's fastest-growing region. The protectionism that is on the rise in the West does not resonate in Asia. Besides resorting to protectionist measures such as the Trump administration's proposed "border adjustment tax", Western economies are turning increasingly to technologies such as robotics and 3D printing, which narrow or neutralise labour cost differentials, to reshore manufacturing back to their home countries.
By history, connections and formal trade links, Singapore is also well placed to do business in the region. But it must deepen its understanding of Asia to a more granular level - reaching out to sub-regions, states, provinces and cities. It must especially enhance its connectivity with Singapore's immediate hinterland of Johor as well as Batam and Bintan, so that companies have easier access to lower-cost land and labour. It must innovate for the burgeoning consumer classes of China, India and Asean, not just cater to supply chains that end in Group of Seven markets. Some multinational corporations based here and local companies are already doing this. We need to multiply their number.
But in some areas, there are questions around whether the objectives of the CFE report and the means set out to achieve them are sufficiently bold, realistic and comprehensive.
FOREIGN TALENT WITH DEEP SKILLS
Take the idea of developing "deep" skills. The report makes some far-reaching proposals: Develop modularised training and a one-stop training, education and guidance portal, and encourage more company-based training - on top of what we already have, such as the SkillsFuture scheme and an educational curriculum that is admired by the world. But what seems implicit in these proposals is that we must rely overwhelmingly on local talent.
However, many of the deep skills relevant to the future economy (actually, the present) - such as data science, cyber security expertise, artificial intelligence, robotics, software innovation, the development of complex algorithms and user-experience design - are at a nascent stage in Singapore but are already available elsewhere at advanced levels. We can ill afford to wait until our domestic skills in these relatively new areas are mature enough to be internationally competitive, which could take years. The disruptors of our businesses - who use the best skills in the world - are already at our gates. We, too, need state-of-the-art deep skills, now and in significant numbers, in our companies, financial institutions and government agencies.
Surprisingly, this urgent need for advanced skills from overseas gets no mention in the main CFE report. Only in one of the sub-committee reports in the annex is there a one-sentence recommendation: "Singapore must augment local talent with foreign talent possessing specialised skillsets." But at least in the initial stages, advanced foreign talent will need to lead the way, not just be an add-on.
We must reopen our doors to such talent, even if through the mechanism of fixed-term visas that do not lead to immigration.
We need to reverse the nativist sentiment that has taken hold over the last five years among not only sections of the public but also some of Singapore's intelligentsia and politicians. We must send a positive signal to the world that such skills are wanted and welcome. Companies must be free to go and seek them out, secure in the knowledge that they will be allowed to hire.
This will amount to a change - certainly a change of emphasis - in the Government's manpower policies, which many companies suggest are still excessively tight, an issue already reflected in the pattern of unfilled job vacancies, for professionals, managers, executives and technicians in particular.
In some of its ambitions, the Government may need to be modest and circumspect in what it can achieve. One relates to "industry transformation maps" and the targeting of clusters.
Industry transformation maps are best plotted by industries and companies themselves. For example, it is unlikely that the radical transformation of the advertising industry by search (Google) and social networking technologies (Facebook) over the last decade, which stunned even industry insiders, would have been foreseen in a government's transformation map. Ditto for the big changes that occurred in the hospitality industry (Airbnb) and the taxi business (Uber), and are under way in financial services (Blockchain and other technologies), where a revolution with unpredictable consequences is in progress.
Industry transformations typically happen organically, driven by audacious entrepreneurs, fast-changing industry ecosystems and receptive consumers. The best governments can do is provide an enabling environment in the form of infrastructure, information and outreach, access to skills and financing, as well as appropriate regulation.
Promoting industry clustering, where companies gather together in close geographical proximity, is a worthy goal, but in today's world of disruption and rapidly changing technologies and capabilities, the configuration of future clusters and their members cannot be discerned in advance - something the CFE, to its credit, recognises.
It notes, for instance, that "new industries that straddle or do not fit into existing classifications will emerge, and create new links between existing industries", citing as an example the wearable technologies industry which brings fashion and healthcare into the same cluster. Thus, in many cases, clusters will form, but their configuration is unpredictable. They will be recognised as clusters only in retrospect.
So while the scope for activist industrial policy will be limited, where the Government can play a useful role is in catalysing growth capital for the private sector (by providing some itself where there are market gaps) and in opening new markets and sectors for companies, especially in the region.
NEED TO ADDRESS SOCIAL ISSUES
As for what is missing in the CFE report, one broad area that gets scant coverage is social policies, which need to be part of any blueprint for the future economy too. One of the issues we are already grappling with, and which will get more challenging with time, is an ageing workforce. The share of resident workers aged 60 and above hit 13 per cent of the labour force last year, more than double the 5.5 per cent recorded in 2006. The proportion will continue to rise and, by 2020, the number of working-age residents will start to decline in absolute terms, depressing economic growth and living standards.
To deal with this problem, we will need to go beyond incremental measures, such as changes to rules on the retirement age and re-employment and retraining. Unless we can count on a quantum leap in productivity - a doubtful bet - we will have to revisit what some observers, such as entrepreneur and former Nominated Member of Parliament Calvin Cheng, have described as the "elephant in the room" issues of population and immigration. These were swept under the carpet after the negative public reaction to the Government's Population White Paper of 2013, but they cannot remain there. The CFE report would have been more complete with a discussion of how best to tackle the issues around our ageing workforce.
Safety nets are another area of social policies relevant to the future economy. In future, economic disruption will hit workers at all levels - not just blue-collar, but also white-collar and managerial. Technological changes are also likely to exacerbate income inequalities. How will we deal with these problems? We will need to go beyond the arrangements we have in place today, such as the Workfare Income Supplement and ad hoc assistance schemes which are targeted mainly at low-income workers.
Some social scientists have come up with more radical suggestions. For instance, economist Anthony Atkinson of the London School of Economics has proposed that a "basic living wage" - which is higher than the minimum wage - for all, as well as a minimum inheritance at adulthood, would help secure social stability amid tumultuous change and reduce disparities in income and wealth. We must examine these and other ideas in our own context.
Changes in corporate culture, management and mindsets will also be needed. One especially important issue here is the demographic profile of those who run and manage our companies. Whether by tradition or design, most companies are still dominated at the top by people in their late 50s or older. But those at the vanguard of the future economy are overwhelmingly people from Generation Y - born in the 1970s or later. The first group must accelerate the ceding of decision-making power and control to the second, who, at present, often have little say in big corporate decisions. Our companies, even those long established, must increasingly be shaped by digital natives.
Finally, tracking and preparing for the future, as the CFE has done, will always be a useful exercise. But if the CFE were set up five years ago, its conclusions and recommendations would be totally different from what they are today. And if there is another CFE five years from now, it would also quite likely come up with very different ideas.
What we need then is to permanently track the moving target that is the future. Rather than continuing to have periodic CFEs, we should consider establishing a permanent, specialised institute that formalises the study of the future in a systematic way and shares its knowledge. We need something like this because the future will always be there and will increasingly seem to arrive sooner than we expect.
The writer is associate editor at The Business Times where this commentary was first published.
Signposts to show the way forward
Editorial, The Straits Times, 11 Feb 2017
The Committee on the Future Economy would have had an outsized job if it was meant to produce a blueprint, complete with "killer" 21st century business ideas to keep the economy aloft in both the near and distant future. Such crystal ball gazing on a national scale would be beyond even the most high-powered committee, as the future is unknowable, particularly in a world fraught with uncertainty. Rather, the exercise is akin to an effort to scan the horizon amid much disruption and change, and establish signposts and markers to point the way forward.
The committee's report, released on Thursday, is timely, given the nature of the growth one can expect, the changing profile of manpower, job disruptions being wrought by technology, creative destruction of markets, and widespread backlash against globalisation, whose effects are only starting to be felt. The vision is to position Singapore as a global city that is "open to trade, people and ideas", and has deep capabilities that will allow its people and companies to "seize the opportunities in the world". Conversely, turning inwards and viewing diversity with suspicion would narrow the nation's options and severely crimp growth. To avoid that fate, the committee has mapped seven broad strategies to help businesses and people remain relevant in the future.
Unlike previous high-level economic committees, the latest one was not convened to deal with a recession. But the need to act is no less urgent as the nation has to find a way forward in volatile circumstances and amid unsettling geostrategic shifts. As a small, open economy, Singapore is not in a position to shape the global mood. Instead, it has to spot emerging trends, adapt and prepare to ride the waves, as it has done for 50 years. This time, the task is much tougher than those undertaken before because it calls for nothing less than a transformation of industries, and the mass upskilling of workers for jobs that are still evolving.
It has become harder to identify with certainty which industries will succeed, and which jobs will remain relevant over time. Businesses will have to weigh risks, make key decisions and reinvent themselves in the face of disruption. And workers will have to be prepared to learn and relearn new skills - and deepen their knowledge - as the job landscape changes. Enterprise and manpower are two central pillars upon which the growth of the nation rests. Getting either wrong would hold far-reaching implications, as social needs rise due to demographic changes. This is the backdrop against which political, business and union leaders will have to take risks, strike out boldly and cut losses when the situation calls for it. Tripartism everywhere could face its greatest test yet should the global climate turn adverse in the future. In Singapore, however, it is likely to persevere, if past lessons of collaboration are not forgotten.
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