Economic transformation must speed up for Singapore's survival beyond Covid-19 crisis

Singapore

DESPITE Singapore's best efforts to mitigate the impact of the Covid-19 pandemic, the number of unemployed residents here could rise from about 73,000 in 2019 to more than 100,000 in 2020, Deputy Prime Minister and Finance Minister Heng Swee Keat said on Friday.

Mr Heng noted that 91,000 residents were unemployed during the 2003 Sars epidemic, the highest annual average number on record, and the impact of Covid-19 is widely expected to be more severe.

For this reason, the government's top priority in its fiscal response has been to save jobs and create opportunities for about 100,000 Singaporeans through the SGUnited Jobs and Skills package, he said.

The package is also in line with efforts to promote transformation in businesses and industries, which will need to be accelerated if Singapore is to survive in the post Covid-19 world.

"Before Covid-19 struck, structural changes such as the fragmentation of global supply chains and technological changes, were already in motion," Mr Heng said. "Covid-19 has triggered both a deep cyclical shock and accelerating structural changes in the global economy. To thrive, or even to survive, companies all around the world must adjust to these forces with speed and agility."

Speaking in Parliament to wrap up the Fortitude Budget debate, Mr Heng outlined the three thrusts of the Jobs and Skills package, the first of which is to save jobs in viable businesses and preserve workforce capabilities in temporarily hard-hit sectors.

The Jobs Support Scheme has already paid out more than S$11 billion in wage subsidies to help employers retain staff, and will eventually provide S$23.5 billion to support 1.9 million jobs over 10 months.

The second thrust aims to open pathways to new jobs, with a National Jobs Council set up to oversee efforts to create about 100,000 job opportunities in emerging and growth areas like infocomm technologies, financial services and healthcare.

The focus of the third thrust is on harder-hit groups such as graduating students, mid-career workers and self-employed persons.

Fresh graduates will get access to jobs and traineeship opportunities in growth areas, through programmes like the TechSkills Accelerator programme for the information and communications technology sector.

Mature workers will benefit from the SkillsFuture Mid-Career Support Package and enhancements to the Adapt and Grow programme, as well as incentives for employers to redesign jobs and hire more mature workers.

However, Mr Heng acknowledged that it will not be possible to save every job, as many sectors were already facing disruption before Covid-19.

In order to survive, Singapore will need to accelerate economic transformation and establish itself as a key player in the Asian and global realms of technology, innovation and enterprise, he said.

Formulating an idea of how the world will be changed after Covid-19 will be crucial, and the Emerging Stronger Task Force is studying key shifts and developing recommendations in technology, innovation, digitalisation and disruption to global supply chains.

Mr Heng said Singapore is fortunate to have started its transformation efforts early, and companies that made the effort are adapting better to changes, as they have been able to pivot to new areas of opportunity that emerge even during the pandemic.

To further encourage such efforts, the Fortitude Budget provides support for companies to accelerate their digital transformation and build up capabilities to emerge stronger from this crisis.

Companies can also build up their resilience by creating a strong Singaporean core. This will create opportunities for local workers and help businesses operate sustainably if the external labour supply shrinks or is disrupted.

Singapore will need to forge new partnerships and bring new value through innovation and deep capabilities, to ensure it remains relevant in the the post Covid-19 world. Mr Heng said he will bring together the work of the Future Economy Council and Research, Innovation and Enterprise Council to help industry clusters harness opportunities that arise from innovation networks and the creation of new scientific knowledge.

"In our next phase of growth, we must anchor Singapore as a Global-Asia node of technology, innovation and enterprise," Mr Heng said.

"Like a pearl that is part of a strand of vital global nodes across the world, we must play a valued and inextricable role in the new global configuration."