Future Of Singapore’s Economy

As we face a volatile, uncertain, complex and ambiguous future, we may not be able to predict or even influence the changes coming upon us.

However, we can redesign our economy so as to become more resilient in responding to challenges.

We can prepare ourselves and be in a better position to capitalize on current and emerging opportunities.

In doing so, we should address some of the key questions that can help us create the new framework for growth:
How should we create our desired future?

How can we achieve a more stable, secure and sustainable growth?

How can we resolve economic inequality and enhance social mobility?

How can we improve quality of life because that’s the litmus test for the motives, means and ends of economic development?

In line with addressing these questions, there are some possible game-changers that can make a difference to our collective future.

1. There is a need to strengthen our repository of information and big data analytical resources.

This is to ensure that our policy-development and decision-making processes are underpinned by relevant, accurate and up-to-date information.

2. In a fast-changing world, there is a need to set up environmental scanning and intelligence gathering systems on a global basis.

It will help us predict economic and business trends; preempt opportunities; achieve first-mover advantages; and move up the food and value chain.

3. To secure our future, we need to improve our infrastructure and implement major market and structural reforms so as to reduce economic uncertainty and reinvigorate current level of growth.

These reforms are not just about developing new markets, businesses, and sources of growth. They are also about helping our local enterprises to continue to be competitive and be transformed into global players.

4. Our local enterprises need to move up the innovation curve and focus on value creation and not just on value addition.

As it stands, our local enterprises are comparatively lagging behind in terms of being or becoming a world-beating champions when compared with many similar enterprises in the most advanced nations.

5. We need to deepen our integration with and leverage on the global economy, especially emerging markets so as to strengthen our status as a switching centre for the global value chain.

6. We need to develop proprietary high valued-added produces and services to help us move up the food and value chain; and become a market maker rather than a price taker.

In the new economy, the battle line is not just defined by productivity of the workforce but also on the innovative value-additions of the enterprise.

There is therefore a need to look at productivity from a holistic perspective. It includes increasing productivity through transformational leadership; redesigning business models; developing new markets and businesses; creating and developing higher value-added industries and enterprises, innovating and marketing future technologies and services, developing game-changing business architectures, and creating synergistic relationships between these factors.

7. We need to continue to attract high value-added and high-tech firms to invest in our economy, especially if they are well-positioned in strategic areas such as the development of intelligent and eco-friendly cities.

Through cutting-edged and innovative business models, these firms can help to boost economic investments and growth, and meet expectations of a more educated and increasingly demanding workforce.

8. We need to continue to attract, develop and groom both local and overseas talents so as to help improve relatively low productivity levels, and balance decreasing total fertility rate and impact of an aging population.

We have to aggressively tackle undue concerns about foreign talents and dangerous rationale underpinning xenophobia. These challenges seem to be rearing its ugly head every now and then, especially on the wild wild web.

We need to promote the fact that if the right foreign talents are effectively assimilated and integrated into the workforce, it can be a plus factor to society and a major contribution to the economy.

9. We need to foster a culture and drive for lifelong learning. Lifelong learning is the only true competitive edge.

Through lifelong learning, we can preempt and respond to disruptive forces and ensure that we will be disruptors rather than being disrupted.

The Authorities can provide incentives for enterprises to set up a corporate university on their own, as a strategic alliance, or in partnership with an educational institution.

This is a strategic tool that is widely leveraged upon by many prominent companies and is an important part of developed economies.

A corporate university with a relevant hands-on curriculum can help enterprises enhance lifelong learning, knowledge management and change leadership on both organisational and individual levels. It can also help them foster a stronger branding, culture, loyalty, and affection for the company.

10. In a fast-changing world, there will be those who push forward and those who drop out or are left behind.

The Authorities need to provide fiscally-sustainable incentives to motivate our people to retrain, re-skill, and retool themselves so as to stay relevant and be productive in their workplaces.

11. Local enterprises, especially SMEs are struggling through the double whammy of a slowing down of the economy and increasing business costs. They operate in a tight labour market and face headwinds competing with online businesses and other direct and indirect players in an open and global environment.

One of SMEs’ biggest challenges is availability, affordability and accessibility of capital to help them compete and grow their businesses.

Perhaps, we should revisit the setting up of an Exim Bank or a similar institution or initiative to help SMEs enhance their financial position, stability and growth.

SMEs have limited size, scale and scope of operation. It is more difficult for them to enjoy priority and dedicated service from mainstream financial institutions and to access alternative financing.

In addition, SMEs have greater challenges to assure lenders of their financial position and credit-worthiness.

They also face challenges to convince lenders to invest in projects that are of a higher risk in nature, especially investment in new markets, technology, innovation and systems that are outside of the normal radar screen.

Mainstream financial institutions are not inclined to go beyond offering conventional financial services to SMEs. They are unlikely to provide provide strategic and long-term business services such as identifying new business opportunities and offering assistance to help SMEs capitalise on these opportunities.

They may not fully understand the practical needs of SMEs and be as as willing to co-invest or share the risks with SMEs to capitalise on a project.

With their focus on the bottom line, they are not as predisposed to invest in helping SMEs develop their infrastructure, support and services, grow their business and become the next generation of world-beaters.

An EXIM Bank or a similar venture can cover these essential gaps and also be more more focused in meeting the other needs and requirement of SMEs.

For example, it can provide leadership and advice to help SMEs merge their operations or hunt as a pack. By doing that, it can help them enjoy economy of scale, link diverse markets, and strengthen their competitive edge and value-additions.

12. Our leaders should continue to promote values of regional and global trade. We need to do our part to resolve downsides of globalization and even possibly help other countries plug into the global economy and benefit from being a part of the global community.

13. In the final analysis, the motives, means and ends of economic development is to improve Singaporean’s quality of life. That should be the focus and basis for measuring the success of our national economic plan and investment.

In this regard, I like to suggest the following:

a. Heartware. We need to build a home where Singaporeans can have a deep sense of rootedness and belonging. A home that we can be proud of and where we can find purpose, happiness and fulfillment on an individual, family and community level.

b. Hardware. We have to continue to develop and improve on our infrastructure and economy in order to meet changing needs and expectations of our people and a fast-changing world.

c. Software. Our people should have the capacity, capability, agility, and tenacity to battle all odds so that we will secure our future as a vital hub for the new economy.

d. Soulware. We should continue to look out for and look after the last, the least, the lonely, and the lost both in our land and overseas.

In the brave new exciting world, we cannot afford to just tweak our current policies and fiddle with our existing infrastructure and systems.

Just like what the late Mr Lee Kuan Yew and the other founding fathers have done in the past, we need to continue to redesign our economy.

We need to take major, including unprecedented initiatives so that we will become an admired and lovable “unicorn” right through to SG100 and beyond.

Go4It!

I hope this message will find a place in your heart.

By the way, I have also recorded other reflections.

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