WITH growth getting harder to achieve, Singapore must restructure its economy to sustain transformation, encourage innovation, and boost its standing as a global-Asia node, Deputy Prime Minister Heng Swee Keat said in Parliament on Tuesday (Feb 27).
The external environment has grown tougher, with protectionism and political unrest, said Heng during the second day of debate on Budget 2024. At home, Singapore’s economy is maturing, and its labour force is shrinking.
“The days of ‘catch up’ growth are over, and our resource constraints – labour, land, carbon – are becoming biting,” said Heng, who is also Coordinating Minister for Economic Policies.
“To continue growing the economy, we need structural policies to drive productivity-driven growth and take Singapore forward,” he said, laying out three prongs of this restructuring.
The first is continued transformation. Here, “shared ownership” of this journey is critical as it “affords greater agility in our responses”, he said. While government plans remain important, enterprises and workers can be at the forefront of seizing opportunities.
Noting the progress of industry-driven Industry Transformation Maps, he said that a fuller report on these efforts will be released in a few months’ time.
This sustained transformation has been enabled by Singapore’s tripartite approach, said Heng, giving examples of partnerships between the public and private sector, unions and companies, as well as large and small businesses.
Workers are also taking ownership of their career development, and can continue to do so with the new SkillsFuture Level-Up programme for mid-career Singaporeans announced in the Budget, he added.
Secondly, to reap the full potential of transformation, “Singapore’s next bound of growth must be powered by an economy that is technology-intensive, innovation-driven, and sustainability-focused”, Heng continued.
This requires a research, innovation and enterprise (RIE) ecosystem of researchers, companies and startups, as well as training for workers.
Budget 2024’s additional S$3 billion injection for the 2025 RIE plan is thus timely, he said, as the Republic seeks to deepen capabilities in new growth areas such as artificial intelligence, sustainability and advanced manufacturing.
Singapore has done well on “innovation input”, or research done, said Heng. It must now strengthen its ability to commercialise and translate this research for the market, to produce more “output”.
Besides attracting companies and stakeholders here, Singapore can do more to deepen the innovation capacity of its students, researchers and enterprises, he added.
Finally, in a contested and uncertain world, Singapore must deepen its standing as a global-Asia node for technology, innovation and enterprise, said Heng.
Singapore has a reputation “as a trusted connector and node”, he noted. “Thus, even as the rhetoric grows and cooperation slows, businesses and countries know that Singapore continues to be a constructive and neutral location for business, innovation and talent.”
The country must thus foster “greater connection and collaboration at all levels”. This includes encouraging co-ownership of transformation at home, as well as deepening linkages within its innovation ecosystem and with other ecosystems.
“And beyond that, it is about leveraging our trusted reputation and extensive networks to encourage like-minded partners to grow in Singapore, through Singapore, and with Singapore,” he concluded.
