Staying relevant to the world
Remarks by Finance Minister Heng Swee Keat at the launch of the CFE’s report.
We have done economic reviews before. At every phase of our development, we build on existing strengths, grow new capabilities, and move away from activities that are no longer viable. The Economic Review Committee (ERC) in 2003 and Economic Strategies Committee (ESC) in 2010 were convened after major crises.
But if you look at the CFE, it was not started because of some major crisis. Rather, it is our effort to position ourselves for the medium term. At the same time, we recognise that some sectors are facing difficulties right now. We will address some of these immediate issues during the Budget.
There are a couple of notable features about the CFE. First, the goal that we started with is to take a medium-term assessment of our challenges and opportunities. Secondly, there has been an unprecedented level of change. Last year, we saw the mood towards globalisation turning darker. The pace of change has also been hastened by technological breakthroughs. The effects of these changes on our people and companies will continue to play out for a long time. What do these changes mean for us?
The impact is both positive and negative. Changes in the global value chain, technological disruption, and anti-globalisation sentiments - these can have a negative impact on us. But we also see many positive developments - technological breakthroughs that can bring greater productivity and innovation, as well as the growth of the regional economies which offers many complementary opportunities for Singapore-based companies. What must we do to navigate these changes?
We recognise that our response this time will be different. What the CFE aims to do is to set out the direction and the broad strategy rather than a detailed blueprint. The complex and fast changing economic interactions means that we have to develop the agility and the adaptability to cope with change, to seize new opportunities and to remain relevant to the world.
Our strategies and recommendations revolve around keeping Singapore relevant to the world, and will help us to do three things: one, keep Singapore open and connected to the world; two, build deep and relevant capabilities; and three, work together in new ways.
Keep Singapore Open and Connected
Singapore must stay open and deepen our connections with our partners. We have to build on our strong trade and investment flows, while seeking out new opportunities to collaborate. The future economy will be increasingly driven by innovation flows and the exchange of ideas. We should find new ways to connect with international sources of innovation.
One example of this is the CFE’s recommendation to build a Global Innovation Alliance (GIA), which will build up an international network of young innovators, give them international exposure, and provide the necessary government and private sector support to help them create successful, innovative companies.
Build Deep and Relevant Capabilities
We must also deepen the skills and capabilities of our people and businesses. Being relevant in the future economy means being able to meet new needs as they emerge.
There are many strengths that we can build on. Our people have always been at the forefront of our development efforts. Our education system is highly regarded, and this has been augmented with SkillsFuture to support lifelong learning.
The CFE recommends that we strengthen the links between the skills we acquire and the skills that we use at the workplace. This means having the industry work more closely together with the education institutes, and making it easier for people to take courses in a timely, modularised manner, so that work is not disrupted. Companies have to play a larger role in training to make sure that the skills that workers have acquired can be used on the job in very effective ways.
Our businesses too must become more innovative and globally competitive. We have already built a diverse corporate ecosystem comprising MNCs, large local companies, SMEs and startups. Each brings its unique value, and we can foster even greater interaction between these companies to grow their competitiveness and innovation capabilities. We must move from adding value to creating value - for Singapore to come up with new products, new services, and new business models that meet the world’s needs. Singapore has invested heavily in R&D and productivity improvements, and it is time to commercialise our innovations.
The government also needs to build new capabilities to respond to our changing environment. As technology advances, the government should take a more agile and forward-looking regulatory approach, to facilitate innovation even as we manage risk. MAS’ regulatory sandboxes for experimental fintech solutions is an example.
Work Together in New Ways
Finally, everyone in the future economy must work together to succeed. Singapore has the advantage of a system with a high level of trust and cooperation, where the government, the private sector, and the unions can work together to get things done quickly.
Implementation is key. One way to do it is through the Industry Transformation Map (ITM) strategy. The ITMs are the platform by which we will roll out strategies in an integrated, comprehensive and intensive way. We announced the ITMs in last year’s Budget. The CFE saw, early on in our discussion, the potential for ITMs to be an integrative platform to bring everything together. As a result, we decided to start it, and learn and improve it as we go.
This is a new way of working together, recognising that change will affect different industries in different ways. Each industry has specific opportunities and challenges that require tailored responses. By bringing together the insights and experience of all stakeholders, we can address this more effectively.
The partnership strategy goes further to look at a new culture of collaboration. The seven strategies are mutually reinforcing. By bringing trade associations and chambers, industry players, unions and workers, as well as government together, we believe that we can achieve more.
The CFE’s recommendations put us in a good position to respond to a rapidly changing global environment, at a time when many others are grappling with uncertain futures. By keeping Singapore open and connected, by preparing our businesses and people to create and seize opportunities, and by working together in new ways, we can keep Singapore relevant to the world, and keep creating good opportunities for our people and companies.