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14 February, 2017
Singapore should focus on finance, hub services, logistics, urban solutions, healthcare, the digital economy and advanced manufacturing if it is to ensure the future health of its economy, a government-commissioned report has said.
The Committee on the Future Economy spent a year talking to workers, unions, companies and trade bodies, it said. Based on that research, the report proposed steps that Singapore needs to take to protect economic growth.
Singapore must improve its trade connections with the rest of the world, and "resist the threat of rising protectionism", it said, strengthening cooperation and reducing barriers to trade.
Singaporean workers will need "deep skills" in future, and must aim for the "highest possible academic qualifications early in life", the report said. The skills learned must add value, however, as technology replaces routine tasks.
Enterprises will need help to innovate, and to scale up their operations. The private sector should also be encouraged to provide more growth capital to these companies, it said.
Strong digital capabilities are vital for Singapore's future industries, and help to reach global markets, the report said. One proposal is that national servicemen be taught cybersecurity skills, "given the strategic importance of cybersecurity to the economy as well as national security".
The city of Singapore itself needs to be "vibrant and connected", with transport connections and strengthened digital connectivity. Underground space should be used to let the city expand, the report said, with an "underground masterplan to expand underground infrastructure".
Industry transformation maps (ITMs) should be used to bring all of these plans together, the committee said. Announced last year, these will cover 23 industries and around 80% of the economy.
"Singapore is unique in having created industry-specific platforms that bring together all the stakeholders in that industry. 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. While some enterprises will succeed, others that are slow to adapt will not, and we should accept this," it said.
The regulatory environment will need some changes too, the report said. This includes the regulatory framework for venture capital (VC), in particular the authorisation process for VC managers, as well as for technology products.
"Our collective efforts will allow us to grow by 2%-3% per year on average, exceeding the performance of most advanced economies. Together, we can build a value-creating economy that is open and connected to the world, offering a multitude of opportunities, with sustainable wage growth and meaningful careers for all Singaporeans," the report said.
For further information, please contact:
Ian Laing, Partner, Pinsent Masons
ian.laing@pinsentmasons.com
