7 strategies to take Singapore forward
CFE stresses need to stay open and grasp new opportunities
By 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 a 109-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. Iswaran
For vision to be realised, Govt and individual enterprises must shift mindsets, says minister
By 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."
Minister for Education (Higher Education and Skills) Ong Ye Kung, who also sits on the committee, noted that Asia is the region set to see the highest growth.
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.
National Development Minister and CFE member Lawrence Wong said being open to disruption and change does not equate to less regulation.
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 trade
By 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.