For an economy matured by the speed of technological disruption and change, it isn’t going to be a “5 plus and minus 1 per cent” growth. Minister for Trade and Industry, Mr Chan Chun Sing said a “3 per cent, plus and minus 5 per cent” growth is more likely.
Minister Chan was speaking at The Future Economy Conference and Exhibition, held yesterday at the NTUC Centre. He shared about Singapore’s present capabilities and possible directions the country could take in time to come.
For a country affected by the external geopolitical situation, Singapore must be able to tide the challenges and opportunities it is presented. In reference to the present trade wars, the Minister understood that the global value chain and production will shift. Whatever the outcome in the short term, it remains important that the country be more concerned with the long-term issues such as economic structuring.
The Minister emphasised that not all sectors of the economy will be equally impacted by the technological disruption. Although average economic growth in the near future might be slightly lower than what has been previously achieved, it is important that the dispersion between better and poorer performing sectors should not widen. This will also have a social impact of deterring a yawning wage gap.
Hence, broad-based policy measures to help companies buoy turbulent times need to be re-evaluated. “Going forward, we will need to layer on specific sectoral measures to build real capabilities,” said Minister Chan.
Three sub-categories of strategies were outlined by Minister Chan according to sector performance.
For sectors in the “3 minus 5 per cent” range of economic production, the Government must help to redeploy factors of production into more productive industries. Businesses must be realistic and be willing to bite the bullet if they want to survive in Industry 4.0. Labour must also be upskilled and retrained with skills which can value-add to the sectors which are within the “3 plus 5 per cent” range of economic production.
Secondly, for businesses trapped at an average level of growth, transformation is equally pertinent. The Minister then questioned the kind of transformation businesses are undertaking. He bitingly said, “There is an exhibition going on outside of this auditorium to show many of the toolkits available to help our businesses transform. What does real transformation mean? What we see at the exhibition is not transformation per se. What we see at the exhibition is only the first two stages of transformation.”
The diffusion of ideas and application of software solutions are the easy steps. Companies must also re-engineer the business processes. More than just slapping on a technological solution, businesses must reconsider how their business is done, their product and service offering, and think about expanding beyond the local market. Finally, true transformation is achieved when a company can think about new products and services, channels, ways of production and management. Yet, the Minister warned, “But make no mistake, few will jump from stage zero to stage four…To get to stage four, generally most companies move through stage one, two and three.”
But even for companies who have achieved what seems like transformation nirvana, more can be done. The Government is keen on helping productive sectors expand their market share if not low productivity as with excess labour will ensue.