Singapore must prepare for ‘more churn’, as company failures are part of ecosystem renewal: PM Wong
The process will be ‘uncomfortable, even unsettling’, but necessary to create value
[SINGAPORE] The Republic must prepare for “more churn”, as economic dynamism requires that companies be allowed to fail, said Prime Minister Lawrence Wong in Parliament on Wednesday (Sep 24).
While multinational corporations (MNCs) remain key economic anchors, Singapore must work harder to energise its enterprise ecosystem, he said in the debate on the President’s Address.
The country aims to become more attractive to startups and emerging companies, whether these are home-grown or overseas ones seeking a base in Asia. “These are the companies that will shape our future success.”
A different approach is needed here, he said. Some enterprises will fail, and inevitably spark calls for government support.
“But if we try too hard to shield every company, we risk ending up with more ‘zombie firms’ – propped up artificially, stifling renewal and enterprise dynamism. And that’s not the path we want to take.”
The renewal process will be “uncomfortable, even unsettling”, he added. “But it is necessary to create new value, and ultimately to create new and better jobs for Singaporeans.”
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The focus must “always be on the worker, not the job”, said PM Wong. “Companies may fail, jobs may disappear. But every worker matters, every citizen matters, and no one will be left behind.”
In a fast-changing world with greater churn, the government will offer Singaporeans “sufficient assurances so they can deal with the disruptions with a greater sense of confidence and security”.
Lower inequality
This includes keeping essential needs – quality education, healthcare and housing – accessible and affordable, said PM Wong.
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He gave a recap of moves to improve housing supply and affordability, as well as strengthen safety nets and retirement adequacy.
These measures are helping to lower income inequality, he said, with Singapore’s Gini coefficient at its lowest in more than two decades.
However, this inequality measure will soon show a higher reading, due to a change in the way it is measured.
Previously, the Gini was measured only on income from work. The Singapore Department of Statistics has since updated it to include income from all other sources, like rental and investments.
This will cause a slight rise in Singapore’s reading to 0.38 from 0.36, which is expected, he said.
“What matters more is the trend. Even with the revised measure, the Gini continues to move downwards. Inequality in Singapore is narrowing.”
Noting existing ways to mitigate wealth inequality, such as property taxes, he added: “We will press on, and continue to innovate in our social policies.”
Reassuring the youth
Enhancing social mobility is part of the government’s commitment to the next generation, said PM Wong.
With competition having intensified, young people may feel “trapped in a relentless rat race” and worry that society is becoming more stratified, he said. “Social media amplifies these anxieties, triggering constant comparisons and envy.”
Across the world, young people are reporting higher anxiety levels and responding in different ways, from “lying flat” in China to “quiet quitting” in Europe and the US.
“Here in Singapore, we must do everything we can to defy this global trend,” he said. “The young are our future. We cannot let them down. My colleagues and I will not.”
He pledged that the government will build Singapore with future generations in mind.
This includes efforts to enhance social mobility, such as greater investment in early childhood support and continued education reforms, reducing the stakes of single exams and broadening definitions of success.
But he warned: “If employers still cling to narrow academic criteria to judge ability, then the arms race will simply shift from schools to workplaces.”
Employers must thus change how they hire and promote, by recognising different gifts and strengths.
“If we use only general academic results to sort out talent, we will undervalue many capable Singaporeans. We will miss out on the many other competencies and intelligences that exist among us, and that are just as important.”
For example, the public service is using more skills-based assessments, and has stopped looking at grades for some roles.
“Valuing every job also means narrowing the gaps in how different professions are recognised and rewarded,” he said, adding that this is not just about pay, but mindsets.
In the past, parents resisted when children wanted to pursue careers in fields like sports and the culinary arts, he noted. But more parents embrace such choices now because society celebrates these roles, taking pride when their achievements put Singapore on the world map.
“Yet we all know that there remain vocations where pay is not the main issue – rather, it is societal recognition and respect that continue to lag behind.”
The government will do its part, but deeper change must come from society, he added. “We must move from a narrow meritocracy based solely on grades, to a broader and more inclusive one.”
Apart from ensuring mobility, Singapore must strengthen solidarity, which requires constructive politics, he added.
Welcoming the opposition presence in Parliament, PM Wong said he expects the Workers’ Party to raise questions, scrutinise policies and hold the government accountable.
Besides welcoming diverse views in Parliament, the government will also work to engage Singaporeans outside the House, including in policymaking, he added.
Social policies were the focus on Wednesday, with MPs calling for measures to support better mental health, particularly for youth facing pressures from social media, and lonely seniors.
They also called for more help for parents and caregivers, with MPs from both the ruling and opposition parties saying they should not have to choose between work and family. Suggestions included restructuring childcare leave and enhancing flexible work arrangements.
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