Sound economic fundamentals to emerge stronger
Between 2014 and 2019, Singapore’s real Gross Domestic Product (GDP), which measures the value of goods and services produced in Singapore, grew by 2.9% per year. This is faster than the GDP growth recorded by advanced economies over the same period. Growing Singapore’s economy, including through attracting investments, is key to helping businesses expand and creating good jobs for Singaporeans.
Inflation is expected to remain subdued. Both the Monetary Authority of Singapore (MAS)’s Core Inflation measure and the Consumer Price Index-All Items (CPI-All Items) inflation are forecast to average between -1% and 0% in 2020, reflecting weak external inflation and muted domestic cost pressures. Our stable monetary policy stance will complement expansionary fiscal policy and help to ensure price stability over the medium term. Price stability will provide businesses with a conducive environment for growth and reduce uncertainties about returns on long-term investments. These factors will give businesses the confidence to commit to longer planning horizons.
Reinforcing Singapore’s global attractiveness
Businesses can be confident that Singapore, ranked top among the world’s most competitive economies by the World Economic Forum in 2019 and the International Institute for Management Development in 2020, continues to be an attractive place for growth and investment.
Even amidst the COVID-19 pandemic, the Economic Development Board secured $13 billion of fixed asset investment (FAI) commitments in the first four months of 2020. This is among the highest in recent years, reflecting businesses’ confidence in Singapore’s high levels of connectivity, openness, and brand of trust to site their critical functions here.
These investments will create new business opportunities. The $56 billion of FAI commitments and $35 billion of total business expenditure commitments secured between 2015 and 2019 have translated into numerous opportunities in sectors such as energy & chemicals, and information & communications and media. The Government worked with multinational companies and large local businesses to transform their suppliers, many of whom are homegrown small and medium enterprises (SMEs).
German semiconductor manufacturer Infineon provided training and guidance in business innovation thinking to six Singapore start-ups.
These companies were able to access Infineon’s Co-Innovation Space, collaborate with research and development and manufacturing, as well as connect with its regional network of partners and customers.
Developing strong firms to seize growth opportunities
Businesses are achieving higher productivity and seizing new growth opportunities. This is supported by the tripartite collaboration overseen by the Future Economy Council through 23 Industry Transformation Maps.
- Singapore’s labour productivity, as measured by real value-added per actual hour worked, rose by 2.5% per year from 2014 to 2019.
- Overseas investments by companies based in Singapore increased by 8.9% per year over five years to reach $836 billion in 2018.
Businesses have also made use of government programmes to uplift productivity, strengthen capabilities, and access new markets:
- Since the launch of the Productivity Solutions Grant (PSG) on the Business Grants Portal in 2018, more than 13,000 businesses have successfully applied for PSG solutions.
- In 2019, Enterprise Singapore supported more than 10,000 businesses to raise productivity, enhance innovation, and accelerate internationalisation. These comprised:
- 8,300 businesses undertaking productivity and capability-building projects, to improve business processes, automate, and digitalise.
- 550 businesses benefitting from support for innovation projects such as open innovation calls and collaborations with public agencies and large private sector organisations.
- 2,600 businesses receiving assistance with internationalisation projects to help them expand overseas.
- In the same period, some 2,000 start-ups benefitted from mentorship, incubation opportunities, and funding through Startup SG.
- Since its launch in 2019, over 40 high-growth local businesses have come on board Scale-Up SG, which helps them scale and grow into future global champions.
- Partners such as trade associations and chambers, SME Centres, and Centres of Innovation also play a critical role supporting businesses in areas where industry-specific help is required. The network of SME Centres has assisted over 28,000 businesses through business advisory services and capability development efforts.
Onn Wah Precision Engineering
With government support, Onn Wah Precision Engineering was able to invest in advanced manufacturing solutions to improve its sales revenue and manufacturing capacity. Among the solutions were collaborative robots and shop floor planning systems for real time production data tracking and decision making.
Read more: Economic Opportunities
Investing in a capable and future-ready workforce
Singapore’s workers are highly regarded internationally. In 2020, Singapore continues to be the only Asian country in the top 10 of the World Talent Ranking by the International Institute for Management Development, moving up from 10th to ninth place. Our development efforts and policies have provided businesses here with access to a skilled, agile, global-ready, and Asia-capable workforce.
There is a wide range of support provided to businesses to develop their local workforce and for workers to pick up new skills and roles:
- Employers can tap on Place-and-Train programmes under the Adapt and Grow (A&G) initiative to receive course fee subsidies and salary support to hire and reskill mid-career jobseekers for new job roles. From 2016 to 2019, over 14,500 mid-career jobseekers were reskilled to take on new jobs through Place-and-Train programmes.
- Companies, especially SMEs, receive more support to scale up their employer-initiated skills development efforts from a network of SkillsFuture Queen Bee companies, which are leading anchor businesses in their respective industries. Over the next five years, this initiative will grow to support around 4,000 companies, benefitting from the experience and expertise of up to 40 partnering Queen Bee companies. There are 17 SkillsFuture Queen Bee companies on board, including multinational companies such as Bosch Rexroth and local companies such as SMRT and SP Group.
A comprehensive approach is in place to enable businesses to build the capabilities they need for the new economy:
- In 2019, close to 4,000 employers tapped on the A&G initiative to hire jobseekers.
- To support the hiring needs of local employers, new features are continually introduced on MyCareersFuture:
- The “Suggested Talents” feature recommends candidates to employers if they possess skills that are relevant to the posted job description and have indicated they are open to career opportunities to which they may not have applied.
- The “Candidate Preview” feature enables employers to preview critical information in an applicant’s resume, such as education, skills, and work experience, at a glance.
- Companies can tap on fresh graduates through the SkillsFuture Work-Study Programmes. This enables companies to get the help they need and graduates to gain work-relevant skills as they move into the workforce. There are currently 16 Work-Study Diplomas, 74 Work-Study Post-Diploma Programmes, and 38 Work-Study Degrees available.
- Companies can look towards a pipeline of talent who are competent in emerging technologies. Institutes of Higher Learning will be building foundations for competencies in artificial intelligence (AI) with more exposure to computational thinking and data competencies. Students training to enter sectors that are ripe for AI adoption, such as cybersecurity, finance, logistics, and manufacturing, will be equipped with higher proficiency in AI competencies.
- There is a curated list of short courses under the SkillsFuture Series aimed at equipping workers with industry-relevant skills in priority and emerging areas, such as advanced manufacturing, data analytics, finance, and urban solutions. More than 67,000 individuals have participated in SkillsFuture Series courses since its launch in October 2017.
- The tripartite Institute for Human Resource Professionals (IHRP) supports human resource (HR) professionals and companies to build relevant capabilities, such as change management, people analytics, strategic workforce management, and talent development. These enable business and workforce transformation as well as the adoption of progressive HR practices at the workplace. HR professionals and businesses are recognised for their efforts through IHRP Certification and the Human Capital Partnership (HCP) Programme.
UOB has been proactive in reskilling its employees to prepare them for the future. In October 2019, the bank launched Better U, a holistic development programme which trains employees in both soft and technical (digital and data) skills. It was the first such training initiative to receive accreditation from the Institute of Banking and Finance.
UOB also actively participated in the Professional Conversion Programme, rolling it out to its consumer banking business, across various job roles ranging from service associates to deputy branch managers. Through the programme, UOB received salary support and course fee subsidies to help its staff move beyond service and transaction-focused roles to more sales-driven, advisory, and leadership roles. UOB has been recognised as a progressive employer under the tripartite HCP Programme since 2017.
Our foreign workforce policies, such as the Employment Pass framework and Lean Enterprise Development Scheme, are continuously refined to support businesses’ needs for manpower while safeguarding local employment outcomes. Businesses are able to access the global talent pool to tap on specialised skills and fill gaps in their workforce, as long as they give local jobseekers fair consideration.
Overcoming challenges together
In 2020, Singapore’s real GDP is expected to contract by between 6% and 6.5%. This reflects a sharp deterioration in the domestic and global economic environment due to the severe disruptions to economic activity caused by the COVID-19 pandemic. Many countries have implemented stringent public health measures to contain the pandemic and prevent subsequent waves of infections. The measures have in turn curtailed economic activity in these countries, leading to a significant pullback in global growth and more severe supply chain disruptions. Most of the major advanced and emerging economies are now projected to see full-year recessions in 2020.
As a small and open economy, Singapore is adversely affected by these developments. Nonetheless, there remain pockets of resilience in Singapore’s economy such as biomedical manufacturing, and information & communications and media. Businesses are also making encouraging progress as they forge ahead with economic transformation for the longer term. With our openness to talent and respect for fair consideration, Singapore remains an attractive hub where businesses can build their best teams and create good jobs for Singaporeans. Singapore stands on strong economic fundamentals that will help us to rebound from this crisis and capture new opportunities.
Read more: Emerging Stronger as One