SINGAPORE will need to deepen its comparative advantages in three areas so as to compete globally, and these are key issues for the Committee on the Future Economy to look into.
This will in turn help Singapore move towards value-creation to mould the future of its economy, said Minister for Trade and Industry (Industry) S Iswaran on Thursday.
The three areas are the ability to coordinate internally, the collaboration between the public and private sectors, and the nurturing of new capabilities to compete globally.
In his opening speech at the Economic Society of Singapore Economic Policy Forum, Mr Iswaran said that these areas are important sources of comparative advantage for Singapore, and "the Government is committed to building on them for the future".
"These are some of the issues that the Committee on the Future Economy will need to address," he said.
Mr Iswaran is also deputy chair of the committee, which is chaired by Finance Minister Heng Swee Keat.
Mr Heng previously stressed that the task of the committee is to help Singapore "move up the innovation ladder" from a "value-adding" economy to a "value-creating" one.
A crucial part of this will be the opportunities and jobs it creates for Singaporeans, he said.
In his speech on Thursday, Mr Iswaran prescribed some approaches in which Singapore can look at value-creation.
He believed that Singapore's small size meant that the country is nimble enough to have "coordinated response to complex, multi-dimensional issues". SkillsFuture is one example, which aims to achieve multiple objectives, such as addressing the future of jobs, meeting individual aspirations, maximising human capital, and developing a culture of lifelong learning.
Next would be strengthening public-private cooperation. This would allow companies to stretch their investments in research and development, helping them find new revenue streams to improve their topline, and improve operational efficiency.
The third area is in nurturing new capabilities so that Singapore can break out of its constraints to compete globally. Mr Iswaran highlighted Singapore's success in finding innovative solutions in areas such as urban planning and clean technology.
In agreeing that value-creation is "more than just a buzzword", Ho Kwon Ping, executive chairman of Banyan Tree Holdings, said that it would help Singapore retain its competitiveness.
In his speech as a panellist at the forum, he proposed that Singapore should now focus on sharpening its "proprietary advantage" to create value.
"A proprietary advantage is something that you own ... it's owning a patented technology, or a brand," he said.
Mr Ho highlighted Singapore's advances in the aviation industry that were led by the stellar growth of Changi Airport and Singapore Airlines.
Today, Singapore is seen as an all-round aviation hub. Even though the above-mentioned entities have had their competitiveness chipped away by the likes of Seoul's Incheon Airport or Emirates, Singapore is known as a hub for avionics and aircraft leasing.
But obstacles to harnessing the potential of proprietary advantages remain, chief of all the costs resulting from low productivity.
Singapore can consider restructuring wages at the lower end of the workforce, and be more welcoming to foreign talent at the top. This will help raise labour productivity.
In addition, the government can consider investing heavily in individual sectors that is easier to raise productivity.
"At the macro level, it may just be a 0.1 per cent increase in productivity, but at the individual sectoral level it is considerable, and that gives us a sense of achievement," he said.