Productivity drive a marathon without finish line, says PM Lee Hsien Loong at Opening of National Productivity Month 2014

Resource constraints and developed economy make push more pressing
By Janice Heng, The Straits Times, 8 Oct 2014

SINGAPORE'S productivity push is for the long haul and faces many challenges, but there are reasons to be optimistic, Prime Minister Lee Hsien Loong said yesterday.

Singapore started promoting productivity more than 30 years ago, but this drive is even more pressing today given Singapore's developed economy and resource constraints, Mr Lee said at the launch of the National Productivity Month.

He laid out a three-pronged approach to the productivity drive.

First, there are incentives and schemes to help firms upgrade.

Second, foreign worker inflows are controlled to put pressure on employers to upgrade workers.

But firms still get enough access to manpower so that they can survive and Singaporean jobs are not lost. "As I said last week, I don't expect any further major measures to tighten our foreign worker numbers. But we will give companies time to adjust to the measures and to retool themselves," he said.

The third prong is making the productivity drive a national effort. Mr Lee set out the different roles which players should take.

For instance, firms must have a "productivity mindset" and dare to change, while workers must hone and improve their skills. Customers also need to embrace new models such as self-service.

The National Productivity Month is organised by the Singapore Business Federation (SBF) and Singapore National Employers' Federation and includes conferences, exhibitions and study trips.

At the event yesterday, Mr Lee also told the audience of 800 businessmen that the economy is reaching a mature stage of development, and is growing at a slower pace of about 3 per cent a year.

There is less free land and the manpower situation is tighter, making the productivity push all the more important. Productivity is important not only for growth, but is also crucial for raising incomes, he added. A tight labour market may make wages rise in the short term, but longer-term rises can be sustained only by higher productivity.

Still, there are challenges, said Mr Lee. Social attitudes that over-value qualifications must change, and some sectors such as construction have been slow to improve. But there are also encouraging signs, he added. Sectors such as precision engineering are making steady progress. Even in slower sectors such as food and beverage, firms are changing.

"Productivity is a long haul, a marathon without a finish line, but so long as we have confidence and keep working at it together, we will stay in the race and (stay) ahead in the race," he concluded.

Mr Lee was given a brief demonstration of a flying robot waiter, which can deliver food and drinks to patrons automatically.

News of no further major foreign labour curbs is a relief, but "that shouldn't stop us from improving our productivity", said SBF chairman Teo Siong Seng.

A RACE WITH UPS AND DOWNS

All world-class marathons are designed to test the athlete's endurance and will to win. Flat courses are inevitably followed by 'heartbreak hills' and any good athlete knows that you cannot maintain the same pace throughout the marathon if you expect to win.

- From a 1986 letter by the former chairman of the Japan Productivity Centre, Mr Kohei Goshi, to then Prime Minister Lee Kuan Yew


PLANTING MEN

When planning for one year, there's nothing better than planting grains. When planning for 10 years, there's nothing better than planting trees. When planning for a lifetime, there's nothing better than planting men.

- A saying by Chinese philosopher Guanzi, which Mr Goshi quoted in the same letter

Prime Minister Lee Hsien Loong shared both these quotes yesterday for what he noted was "the third time". As Minister for Trade and Industry, he had quoted Mr Goshi at the opening of the 1987 Productivity Month. Mr Lee Kuan Yew repeated the quotes at the following year's Productivity Month, "because the press hadn't paid attention" the first time.

Productivity push must continue: PM Lee
By Wong Wei Han, TODAY, 8 Oct 2014

The Government is aware of the difficulties companies here are facing as Singapore pushes for economic restructuring, but improving productivity is now more important than ever given the Republic’s current economic and manpower constraints.

Prime Minister Lee Hsien Loong said this yesterday as he launched the National Productivity Month (NPM), adding that Singapore will succeed in this current push following decades of similar efforts.

“I know that many businesses and workers are trying hard to cope with change — and indeed it’s hard,” Mr Lee said in his opening address to about 800 business leaders attending the event. “We do have some challenges in changing social attitudes that overvalue paper qualifications … In several sectors, progress in upgrading productivity has been slow, such as construction and some services industries.”

Mr Lee’s comments come as productivity growth remains mixed in recent years despite the slew of Government support policies. In the second quarter this year, overall productivity shrank by 1.3 per cent year-on-year as the retail, construction and food services sectors recorded declines.

Still, he was upbeat. Saying that the productivity push is a nation-wide effort, Mr Lee added: “Looking at our productivity journey over the last half a century, we can be optimistic that our restructuring journey will be successful.”

He was referring to Singapore’s efforts to raise productivity levels since the 1970s when the National Productivity Board was set up. In 1981, then-Prime Minister Lee Kuan Yew had also launched a National Productivity Movement in an effort to boost Singapore’s labour skills and productivity levels to those of the advanced economies.

And now, as Singapore transforms into a developed economy with a slower growth rate and tighter manpower supply, productivity has become “more important, not less”, Mr Lee noted. “Not only is productivity important to grow our economy, but it’s also crucial for raising the income of workers,” he said.

To this end, the Government will continue with its three-pronged approach — by treating productivity as a national effort where everyone has to play a part; as well as supporting companies in their productivity investments and encouraging mindset change among employees and consumers. Urging Singaporeans to be open to change, Mr Lee said: “Customers must be ready to embrace new business models, such as self-service formats.”

The other prong is controlling foreign worker inflows. But as foreign employment growth in the second quarter fell to the slowest pace since 2009, Mr Lee sought to reassure businesses, saying, “As I said last week, I do not expect any further major measures to tighten our foreign worker numbers. We will give companies time to adjust to the measures and to re-tool themselves.”

The Singapore Business Federation — which co-organises the NPM with the Singapore National Employers’ Federation — welcomes that decision, its chief operating officer Victor Tay told TODAY. “The next two years will be essential for businesses to deliver more sustained productivity improvement, following years of mixed progress. So the Government’s pledge to cease further curbs is important, because it gives business clarity and certainty,” he said on the sidelines of the NPM launch.

Also combining the efforts of several Government agencies, the NPM will go on until Oct 30, offering exhibitions, workshops, seminars and overseas study trips to highlight innovative productivity solutions, especially for less productive sectors such as retail, food and beverage, and construction.

And investments in these solutions are quite affordable now, even for small and medium enterprises (SMEs), SBF chairman Teo Siong Seng said. “There is no lack of technologies, and there are a lot of Government schemes — such as the Productivity and Innovation Credit scheme — that SMEs can tap. The challenge of improving productivity is not so much about costs. It is really more about companies’ willingness to try to adopt changes to their processes and mindset,” he said.

Harnessing technology to boost productivity in F&B
By Robin Choo and Wong Wei Han, TODAY, 8 Oct 2014

This time next year, restaurant goers here can expect service to be taken to a whole new level with the latest innovation in food delivery — flying drones.

Infinium Robotics has been working with a local restaurant group to look at how its drones, an autonomous robotic waiter system, could be used to deliver food, by air, to each table.

The drone was showcased at the launch of the inaugural National Productivity Month (NPM) as an example of innovations that could be used by businesses to improve productivity.

Infinium Robotics CEO Woon Jun Yang said his firm was working with the restaurant group to figure out how the drones could be deployed along with service staff who would be trained on how to operate the airborne food delivery system.

Added Mr Woon: “The existing waiters can (then) concentrate on higher-value tasks such as, for example, asking feedback from customers (and) how they are doing.”

Also at the NPM exhibition was Aptsys Technology, a new start-up that showcased its latest self-service payment kiosk. The kiosk combines a touch screen for placing orders together with a cash-and-card payment terminal — not unlike an MRT ticketing machine. With it, customers can place their orders, pay and proceed to collect their items, all on their own.

“This will help fast-moving F&B outlets, such as small fast-food joints, reduce the manpower otherwise necessary for serving and manning counters. We have about 40 to 50 customers looking to install this kiosk within the next six months,” said the company’s executive director, Mr Deepak Kingsley.

“A kiosk costs around S$26,000, but with Infocomm Development Authority’s iSPRINT scheme, companies need pay only 30 per cent of that. Adding schemes by other agencies, such as the PIC (Productivity and Innovation Credit) scheme, the cost is pretty much negligible.”

* Flying robots to start serving in restaurants by end-2015
By Robin Choo, TODAY, 27 Nov 2014

Restaurant-goers in Singapore can expect to be served by autonomous flying robots – the world’s first commercial attempt – by the end of next year.

Infinium-Serve, the autonomous flying robotic waiters, will be first launched at one of Timbre Group’s five outlets in Singapore. Infinium Robotics CEO Woon Junyang estimated the project to cost a “low seven-figure sum” for the five outlets, subject to final negotiations and certain variables of the actual deployment of the robots.

Infinium Robotics signed a Memorandum of Understanding with Timbre Group on Oct 31. Both companies are seeking productivity-related government grants to help offset deployment costs.

Mr Woon said he is confident that such robotic solutions will help alleviate the Singapore’s labour crunch. Introducing this technology into restaurants would take away mundane tasks of serving food and drinks, and allow human waiters to focus on higher-value tasks such as getting feedback from customers, he said.

“This will result in an enhanced dining experience which will eventually lead to increased sales and revenue for the restaurants,” he added.

A prototype of Infinium-Serve was showcased to Prime Minister Lee Hsien Loong at the inaugural launch of the National Productivity Month in early October.

News on foreign worker quotas welcome
Bosses relieved at PM's remark that a further squeeze is unlikely
By Marissa Lee, The Straits Times, 11 Oct 2014

RELIEVED bosses say Prime Minister Lee Hsien Loong's comments that foreign worker quotas are unlikely to be squeezed further means they can plan with far more certainty.

Mr Lee said at the launch of the National Productivity Month on Tuesday that the growth in foreign worker arrivals has slowed to a five-year low and that he expects "(no) further major measures to tighten our foreign worker numbers".

Employers can now look ahead and invest in manpower without worrying about a further squeeze on quotas.

"It's good that there will be no more tightening because it provides businesses with a lot of certainty going forward, and allows us to plan and better recruit employees," said Mr Kurt Wee, president of the Association of Small and Medium Enterprises.

Mr Victor Tay, chief operating officer of the Singapore Business Federation, agreed: "It's definitely welcome news.

"Paring down has been painful especially since Asia is growing, and the inability to deliver due to shortage of manpower has forced some of us to turn away contracts."

There were 1.32 million foreign workers in Singapore last year - 1,107,100 if foreign domestic workers are excluded - a growth of 4.57 per cent from 2012. This is nearly half the pace of growth between 2010 and 2011, when the number of foreign workers grew by 8.75 per cent.

The Government's bid to wean firms off the foreign workforce began as part of a productivity drive in 2010, with measures ramped up after the 2011 General Election.

Having weathered stricter foreign worker quotas and a series of hikes in levies for less-skilled staff, businesses welcome a breather.

"We are very happy because it means our companies can grow," said Mr Raymond Wong, co-owner of Nonya dumpling shop Rumah Kim Choo. "As a small business, if we cannot hire local people, we rely heavily on family members to go through tough times, and we've got ourselves drained out."

Mr Wong's family let go of two restaurants over the last two years when they could not find enough locals to take up the jobs vacated by foreigners.

The highly regulated construction sector is also glad to get more time to adjust to existing measures. "The cuts have been quite unbearable," said Singapore Contractors Association president Ho Nyok Yong. "Now many contractors are already on the productivity journey and that just takes time to realise."

Bank of America Merrill Lynch economist Chua Hak Bin agreed that the time is right to "pause and assess" the impact of the quotas since productivity has fallen in some domestic sectors, including construction and food services.

Dr Chua also flagged the scheduled hike in foreign worker levies next July. Contractors will be levied a new high of $1,050 a month for each unskilled worker hired beyond the quota.

But complaints aside, more companies have been warming to the idea of less foreign labour, said Minister of State for Trade and Industry Teo Ser Luck.

"In some ways, it has already sunk in that we have to do something about it. I see more and more awareness and understanding of this, and to me that is a positive sign," said Mr Teo.