TO REDUCE the marine and offshore engineering sector’s dependency on foreign workers and spur productivity, the sector’s dependency ratio ceiling (DRC) will be lowered, and its foreign worker levies increased from 2026.

The DRC specifies the maximum share of S Pass and Work Permit holders in a company. It will be lowered to 75 per cent – three Work Permit holders for every one local workers – from the current 77.8 per cent, or 3.5 for every one local worker.* (see amendment note)

Minister for Trade and Industry Gan Kim Yong, announcing the move at his ministry’s Committee of Supply debate on Friday (Mar 1), said: “We will monitor developments in the sector before making further adjustments.”

Foreign worker levy hikes for the sector, announced in 2013 but deferred in view of a sectoral downturn and Covid-19, will now proceed as planned. Details will be given during the Manpower Ministry’s Committee of Supply debate, he informed.

These moves aim to push the sector to “rethink its operating model, pivot to higher-skilled, higher-value activities, and reduce its reliance on foreign manpower”, noted Gan. This is to keep it productive, globally competitive and well-positioned to leverage new growth opportunities.

But “transformation, while necessary, is never easy”, he said. The marine and offshore engineering sector will thus receive a new support package of S$100 million over the next five years.

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One growth opportunity is in offshore wind, explained Gan, with the global market projected to grow rapidly at an average rate of 22 per cent a year until 2030. The government will identify and capture opportunities along the value chain and anchor them in Singapore. The S$100 million in support includes funding for the existing Enterprise Development Grant – for innovation and building offshore wind capabilities – and the Productivity Solutions Grant, for mechanisation tools to improve productivity.

Minister of State for Trade and Industry Low Yen Ling gave more details of the package in a separate speech. The Marine and Offshore Engineering Industry Digital Plan will be refreshed to encourage adoption of sector-specific productivity-boosting digital solutions.

For workforce transformation, a Jobs Transformation Map will be developed for the sector. This will identify the jobs that can be redesigned, and the skills needed for roles in growth areas such as offshore renewables and decarbonisation.

A new Marine Digitalisation Champion Programme, to be launched later this year, will train employees to lead digital transformation and related job-redesign initiatives in their companies.

There will also be efforts to improve the sector’s branding and get more marine and offshore engineering companies to sponsor industry scholarships.

A new track for offshore wind will be added to Workforce Singapore’s Career Conversion Programme for the sector, to develop local mid-career talent for offshore wind-farm development and operations.

Separately, a Marine and Offshore Engineering Industry Plan is being developed by Enterprise Singapore and the Association of Singapore Marine & Offshore Energy Industries, with details to come in the next few months. This will set out strategies for businesses to seize green-growth opportunities and be equipped for longer-term transformation, said Low.

Promoting investment, developing talent

The marine and offshore engineering sector is among those in which Singapore is promoting investment and technology adoption – one of three thrusts in the country’s economic growth strategy, along with leveraging trade networks and developing talent, said Gan.

Another area for this is artificial intelligence (AI). At the company level, the government will partner 100 companies to build AI capabilities, as well as develop and adopt AI solutions.

Sectoral AI Centres of Excellence will also be set up to “address sectorwide use cases and build domain-specific capabilities”, said Gan.

For a start, the Agency for Science, Technology and Research (A*Star) will launch a manufacturing AI Centre of Excellence by the end of 2024. This will bring together players across industry, research and the startup scene to develop AI-enabled solutions for manufacturing.

These include using AI to optimise manufacturing processes and enhance quality assurance, product and component design, said the Ministry of Trade and Industry and A*Star in a separate statement.

The three-year pilot initiative will inform the approach for establishing such Centres of Excellence in other sectors, such as biomedical sciences, transport and logistics, and financial services.

Separately, the Partnerships for Capability Transformation (Pact) scheme – which supports collaborations between larger companies and small and medium-sized enterprises (SMEs) – will be expanded to more industries and modalities, including capability training, internationalisation and corporate venturing.

The aim is for 100 new Pact partnerships over the next five years, said Gan. “This will provide more opportunities for SMEs to level up their capabilities, enhance their competitiveness and plug into global and regional value chains.”

In a clarificatory question after Gan’s speech, West Coast GRC Member of Parliament Foo Mee Har asked if collaborations with SMEs could be added as a criterion for large corporations to access government grants. Gan replied that some schemes are for technology or strategic investments in areas where local SMEs may not have capabilities. “We will need to assess each project’s features and background to see whether it is appropriate to incorporate local SMEs.” He added: “Sometimes it may be counterproductive. Instead of being able to attract this technology and experts and network opportunities here, you may lose them because we don’t have the local capability.”

As for the strategic thrust of developing talent, Singapore must ensure that its companies have access to a pipeline of local corporate leaders, noted Gan. A new Global Business Leaders Programme (GBLP) will support “key companies” in sending Singaporean middle to senior managers for overseas postings and other development opportunities.

The programme will also “support companies in their regionalisation efforts and in growing a pipeline of Singaporean corporate leaders who can take their businesses to new heights”, added Gan.

Participants will also undergo a nine-month Singapore Leaders Network Fellowship programme, where they will receive mentoring and grow their professional networks. The programme will be run by the Human Capital Leadership Institute, with support from the Economic Development Board.

The GBLP will be launched by the first half of 2024, with more details to be released at a later date.

* Amendment note: A previous version of the article gave an incorrect explanation of the DRC.