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Missing piece in the CFE recommendations
THE release of recommendations by the Committee on the Future Economy (CFE) last month and the debate on Budget 2017 in Parliament provided much food for thought. With technology disruption and an increasingly uncertain global economy, exacerbated by a rise in populism and protectionist sentiment in many developed countries, it is no surprise that business and the economy were among the major issues on the minds of Singaporeans.
When the CFE report was released, some members of the business community commented that the CFE did not detail a roadmap for our future economic and business landscape. Instead, what the CFE presented was a framework by which future opportunities could be created. The recommendations were broad-based and insightful, in consideration of the uncertain and evolving global operating environment.
Given that this is the new normal, it is crucial that businesses ride on the opportunities that will be created as a result of the CFE recommendations to plot their future. Specifically, businesses big and small must increasingly come together for our common good, as we ourselves are responsible for our future. This is the missing piece that will be vital for the successful implementation of the CFE's recommendations and Budget 2017 measures.
I feel assured that businesses recognise that the circumstances under which the CFE came up with its recommendations are very different from that of the previous economic committees. While Singapore was in a more nascent stage of development in the 1990s, and the 1997 Committee on Singapore's Competitiveness and the 2009 Economic Strategies Committee were responding to the economic crises of the day, the CFE has now to deal with a more developed Singapore with its own unique challenges for which there are no well-proven models to emulate.
More importantly, it is responding to a general change of slow growth, low productivity and rapid and intense technological change affecting all countries in a world that is increasingly volatile, uncertain, complex and ambiguous. No detailed roadmap, no matter how well laid out, will enable us to respond well to such an environment. As businesses, we must realise that we are, and need to be, the pioneers of the next generation. It is vital that we take charge of our own growth and future.
In the run-up to Budget 2017, many businesses voiced concern about the challenges they face in the immediate term. These challenges include wages, liquidity, rental and other business costs. The government, in this year's Budget, announced the deferment of foreign worker levy increases for the marine and process sectors for one more year, enhancements to the Corporate Income Tax Rebate, and extensions to the Special Employment Credit and SME Working Capital Loan among other things to help ease immediate-term pressures.
While we may be beginning to see some improvement to the overall business climate based on the latest economic statistics, the improved outlook has yet to trickle down to all segments. In fact, most businesses expect Singapore's overall business climate to remain the same over the next 12 months.
Amid a period of prolonged slow global growth, we have also received feedback that more measures are required to help relieve business costs so that enterprises have the capacity to innovate and restructure. Therefore, it is heartening to note that the government will continue to provide short-term relief where necessary through the system of broad-based support built up over the years. As the government continues to closely monitor business costs, we hope that it will stand ready to step in to provide more support to our businesses, especially SMEs, should the economic climate take a turn for the worse.
As seen in the current and previous Budgets, the government has been comprehensive in its approach to helping businesses, especially SMEs, by putting in place measures that range from assistance for worker training and PMET conversion to SME upgrading. Such measures include SkillsFuture, the Professional Conversion Programme, the Capability Development schemes and their predecessor programmes. We expect the government to be more targeted in its assistance going forward.
While the government acknowledges that it cannot know which industries will succeed in the future, it has stated clearly that companies that are prepared to go further and faster will receive more support. It is here that I call on all companies to also play their part in ensuring that they can succeed in the future economy.
Based on the latest SBF National Business Survey 2016/2017, about six in 10 SMEs have not made any significant adjustments yet in response to either the slowing economic growth or technological change or disruptions. While the proportion is smaller for the large companies (i.e. about four in 10), it is still sizeable. Notwithstanding, it is heartening to note that at our March 8 seminar on Budget 2017 for our member companies, the majority (75 per cent) of businesses agreed that the business community should step up and collaborate more with one another as well as with trade associations and chambers (TACs) to create a more promising future.
Businesses must step up and even rally together to take charge and be responsible for their own fates, to work together and with stakeholders to develop and deepen their capabilities. This is particularly so for SMEs that, by virtue of their size, have less economies of scale and tend to have less access to market resources and expertise compared to the large companies.
The government has made the framework and schemes available. It is up to companies to seize the opportunities. The coming together of businesses - to collaborate among themselves, and with the government and unions - is the missing piece for the implementation of the CFE's recommendations and Budget 2017 measures.
While the government has introduced SkillsFuture for Singaporeans at large, now is the time for businesses to define and shape the future and competitiveness of our respective industries. Like-minded businesses, SMEs and associations can come together to define their own Enterprise Future that will underpin each Industry Transformation Map.
The Industry Transformation Maps have been identified as key initiatives under the CFE. The government has also called for partnerships among enterprises, and to step up initiatives that facilitate such partnerships such as the Partnerships for Capability Transformation programme. TACs, such as the Singapore Business Federation (SBF), can facilitate the coming together of businesses.
The government intends to increase its partnership with various stakeholders, including the business community, going forward. Now is the time to act. I call on business leaders to come forward to help not only your own company but also the broader business community so that we can move from strength to strength. SBF stands ready to help. Together, we can build a robust Singapore economy. SBF stands ready to work with the business community to transit into the future economy.
- The writer is managing director of Pacific International Lines Pte Ltd, and chairman of the Singapore Business Federation, the apex business chamber here.