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IN the lead-up to Budget 2015, several commentators have weighed in on Singapore's productivity growth - or the lack thereof - with prescriptions for improvement centred on restructuring carrots and sticks.
They have, for example, called for tweaks to the Productivity and Innovation Credit (PIC) scheme, or for foreign worker levies and dependency ratios to be removed.
Few, if any, have referenced the government's new SkillsFuture initiative - the national effort to develop a high-quality system of education and training that is responsive to evolving industry needs. By promoting employer recognition and career development based on the mastery of skills by all Singaporeans - regardless of their job, academic qualifications or grades - the long-term drive seeks to create a productive, competitive and skills-based workforce and economy.
The commentators The Business Times spoke to suggested that the SkillsFuture drive has remained absent from discussions on productivity because of the lack of details given thus far. UOB economist Francis Tan said: "It's not clear yet how SkillsFuture is different from previous government efforts to foster life-long learning, so I think people are still waiting for more information."
That information will come on Feb 23, when Budget 2015 is delivered in parliament by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam.
Mr Tharman, who also chairs a 25-member council tasked with spearheading the SkillsFuture movement, had said in November: "The only way in which we can stay competitive, as well as help Singaporeans develop themselves to the fullest and achieve their aspirations, is by developing mastery in every field. That's not just the way companies can stay competitive globally, but how we enable individuals to flower. So SkillsFuture is about that combination of economic and social objectives. And it's ultimately about becoming an advanced society."
Some observers have told BT that the SkillsFuture drive sounds "fluffy".
Nominated Member of Parliament and UniSIM labour economics professor Randolph Tan, strongly disagrees with this assessment, saying: "While the primary concern at this point in time is how to make up our productivity shortfall, the SkillsFuture drive is more important for the long term. It looks at capacity-building, without which not just productivity, but the essential viability of our local workforce, may be called into question ...
"The SkillsFuture drive provides the overarching framework within which there should be greater potential for productivity improvements."
Indeed, several private-sector economists say early initiatives under the SkillsFuture journey will make a perceptible difference, if done well. These include:
Mizuho economist Vishnu Varathan said that such efforts will have a tangible impact with time: "In the medium term, it raises growth of labour productivity to complement the capital productivity boost undertaken. What's more, by closely matching skills-training to employer requirements and cutting the textbook-real world distance, the gains in productivity are more realisable.
"And for the employee, career scalability is a more viable prospect. This mitigates the issue of overly specialised skill sets being less transferable between firms."
Mr Tharman has noted that Singaporeans' heavy emphasis on credentials "has pluses and minuses". "We've got to keep the pluses, which is this desire to advance, but also ensure that people are getting credentials for skills that really hold value in the market, and not just a paper for paper's sake."
CIMB economist Song Seng Wun said the need for a shift in mindsets could prove to be the toughest challenge yet: "It's not just the infrastructure that has to change - the mindset change is crucial to this long-run effort . . . Will parents be less fixated with the university paper chase? Unfortunately, Singaporeans still tend to look down on technical skills."
Even as Prof Tan acknowledged that the SkillsFuture movement will take years to bear fruit, he painted a dire picture of the consequences of doing nothing: "How critical is the SkillsFuture drive? If we do not make the necessary improvements on that score, we may end up facing not just productivity issues but also shortfalls in our future productive capacity.
"The latter could lead to a litany of problems such as a lack of competitiveness, unemployment and under-employment, which some other economies are painfully familiar with."
Indeed, even with the relative lack of details so far, economists agree that the government's broad plan is a step in the right direction. Mr Varathan said: "At the end of the day, the most important driving force in the SkillsFuture initiative is aligning the interests of individual employees with those of the firm and, naturally, the broader economy. The government's role in oiling the gears and checking for slippages in alignment will go a long way."
INFOGRAPHIC: A generous budget