As growth gets harder to achieve, Singapore must transform, innovate and be a global-Asia node: DPM Heng

WITH growth getting harder to achieve, Singapore must restructure its economy to sustain transformation, encourage innovation and boost its standing as a global-Asia node, Deputy Prime Minister Heng Swee Keat said in Parliament on Tuesday (Feb 27).

Economic competitiveness – for both companies and workers – was a major theme of the second day of debate on Budget 2024, with 28 Members of Parliament and political officeholders discussing issues such as artificial intelligence (AI) and reskilling.

In his speech, Heng warned that the external environment has grown tougher amid protectionism and political unrest, while Singapore’s economy is maturing and its labour force is shrinking.

“The days of ‘catch-up’ growth are over, and our resource constraints – labour, land, carbon – are becoming biting,” said Heng, who is also coordinating minister for economic policies.

“To continue growing the economy, we need structural policies to drive productivity-driven growth and take Singapore forward,” he said, laying out three prongs of this restructuring.

The first is continued transformation, with “shared ownership” of this journey being critical, because it “affords greater agility in our responses”, he said. While government plans remain important, enterprises and workers can be at the forefront of seizing opportunities.

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Noting the progress of the industry-driven Industry Transformation Maps, Heng said that a fuller report on these efforts will be released in a few months.

This sustained transformation has been enabled by Singapore’s tripartite approach, he added, giving examples of partnerships between the public and private sector, unions and companies as well as large and small businesses.

Workers are also taking ownership of their career development, and can continue to do so with Budget 2024’s new SkillsFuture Level-Up programme for mid-career Singaporeans, he added.

The programme was one of several manpower-related topics that dominated Tuesday’s debate, with MPs suggesting tweaks to the scheme and flagging the low usage rate of SkillsFuture Credits. Other topics included workplace ageism, helping lower-income workers and the long-discussed unemployment support scheme.

Heng’s second focus for restructuring was innovation. This, he said, requires a research, innovation and enterprise (RIE) ecosystem of researchers, companies and startups, as well as training for workers.

Budget 2024’s additional S$3 billion injection for the 2025 RIE plan is thus timely, he added, as the Republic seeks to deepen capabilities in new growth areas such as AI, sustainability and advanced manufacturing.

Bishan-Toa Payoh GRC MP Chong Kee Hiong suggested ring-fencing part of this funding – as well as part of a S$1 billion-odd investment in AI – for small and medium-sized enterprises (SMEs) or collaborations involving them.

Heng noted that Singapore has done well on “innovation input” or research, and must now strengthen its ability to commercialise and translate this research for the market, that is, to produce more “output”.

One move to keep Singapore attractive as an investment destination amid global tax changes is a new Refundable Investment Credit scheme. Chua Chu Kang MP Don Wee asked if this could be extended to businesses that are less expenditure-heavy but still economically beneficial, such as tech solution providers.

Besides attracting companies and stakeholders, Singapore can do more to deepen the innovation capacity of its students, researchers and enterprises, added Heng.

Finally, in a contested and uncertain world, Singapore must deepen its standing as a global-Asia node for technology, innovation and enterprise, said the deputy prime minister.

Singapore has a reputation “as a trusted connector and node”, he noted. “Thus, even as the rhetoric grows and cooperation slows, businesses and countries know that Singapore continues to be a constructive and neutral location for business, innovation and talent.”

The country must thus foster “greater connection and collaboration at all levels”. This includes encouraging co-ownership of transformation, as well as deepening linkages within its innovation ecosystem and with other ecosystems.

“And beyond that, it is about leveraging our trusted reputation and extensive networks to encourage like-minded partners to grow in Singapore, through Singapore, and with Singapore,” he concluded.

Apart from growth and the economy, social welfare was another theme of Tuesday’s debate.

Workers’ Party MP Faisal Manap renewed his call for an annual social protection report to track the effectiveness and efficacy of social policies with clear key performance indicators. People’s Action Party MP Wee suggested that social support schemes could be reviewed annually, to account for inflation.

For housing, Chua Chu Kang GRC MP Zhulkarnain Abdul Rahim suggested that the Parenthood Provisional Housing Scheme (Open Market) Vouchers – announced in Budget 2024, with details to come – could be provided for a two-year period, rather than for one year.

This would give young couples greater stability, given the three to four-year waiting time for new flats, he said. Senior Parliamentary Secretary for Social and Family Development Eric Chua advocated better care planning and provision for people with disabilities.

For instance, better capturing and sharing of disability data across sectors – including social services, healthcare and transport – will enable healthcare professionals to better serve persons with disabilities. Closer cross-sector professional collaboration will do the same, he added.

“When persons of disabilities move across different service sectors in the course of their lives, there will be inevitable resolution loss in terms of what each successive organisation knows about the person with disabilities,” he said. “This has to be minimised.”