The Business Times

Linking leases to productivity not practical

Published Wed, Nov 6, 2013 · 10:00 PM
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THERE remains a lot more work to do, Finance Minister Tharman Shanmugaratnam said last week about Singapore's drive to raise the productivity of its companies and industries.

Four years after Singapore set a big national target to sustain 2-3 per cent annual productivity growth over a decade, the goal is no less challenging - and the need to plug away at it has only started to grow. Beyond various schemes and incentives to spur firms and workers to upgrade, what are needed are "systemic improvements" across entire sectors to achieve breakthroughs in productivity, Mr Tharman said as he singled out three industries in particular that the government is working on: construction, logistics and retail. To that end, "we will be as aggressive as it takes, to support upgrading, on the job, outside the job and every form of upgrading by firms", he added.

In that spirit perhaps, JTC tenants seeking to renew their leases on the government-owned factories will now have to pass some sort of productivity test. In an interview with BT, Minister of State for Trade and Industry Teo Ser Luck said firms will have to submit for consideration a proposal on how they plan to raise efficiency levels and "set milestones" - presumably a schedule of planned investments in plant and machinery, number and "quality" of jobs that will be created, etc. This will also apply to developers bidding for industrial land. All this is not good news for many SMEs, which, already faced with rising rents, will have to raise their efficiency game in short order, or be prepared to go to a commercial landlord - or relocate out of Singapore - if they are to stay in business.

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