Friday, 20 April 2018

Singapore's 23 key industries to be grouped into 6 clusters as economy begins next phase of transformation: Heng Swee Keat

Six industry clusters to drive economic transformation
Heng outlines plan to position Singapore as key node for technology, innovation and enterprise
By Chia Yan Min, Economics Correspondent, The Straits Times, 19 Apr 2018

The next phase of Singapore's economic transformation will involve deepening linkages between complementary industries by grouping them into clusters, said Finance Minister Heng Swee Keat.

The aim is to position Singapore as a key node for technology, innovation and enterprise in Asia and around the world.

The latest move comes after the Government rolled out 23 sector-specific road maps for transforming key industries, called Industry Transformation Maps (ITMs). A total of 23 road maps covering 80 per cent of the Singapore economy have been launched.

These sectors will now be grouped into six clusters to maximise opportunities for collaboration, Mr Heng said at a media briefing yesterday.

The six clusters - each helmed by a minister and at least one private-sector or union representative - will be unveiling plans in the coming months to promote innovation and encourage partnerships within these sectors.

The clusters are: manufacturing, built environment, trade and connectivity, essential domestic services, modern services and lifestyle.

Such an approach will help bring diverse capabilities together, said Mr Heng. For example, in the lifestyle cluster, there is scope to explore how firms in hotel services and food services can work together to bring major events and conferences to Singapore, as well as improve experiences for tourists.

Citing hawker centres as an example, he added: "In a hawker centre, stalls sell different food and are competing but at the same time they are cooperating - people know that hawker centres will always have a great variety of good food.

"This is what I hope Singapore companies can also do. Everyone is good at something, and together we can build a reputation as the best 'hawker centre' in town."

The aim is to cement the Republic's position as a "global Asia node of technology, innovation and enterprise", said the minister.

This means making innovation pervasive, building deep capabilities in companies and among workers, as well as developing strong partnerships locally and around the world.

Mr Heng said the pace of transformation has been uneven across sectors, but more companies now understand the urgent need to become more productive.

Some of the factors spurring firms to change include restructuring efforts in the economies of Singapore's major trading partners, the rise of disruptive technologies, as well as the challenges accompanying Singapore's ageing population.

The global economy is also in better shape compared with when the ITMs were first launched, Mr Heng noted. Singapore's economy has picked up over the past two years and productivity is also up.

"(Some of this growth) shows that some of our efforts are paying off... We must make full use of this upswing to make all the changes that are necessary," he added.

CIMB Private Bank economist Song Seng Wun said it is still early days for the ITMs and it remains to be seen how much of an impact they will have.

"The economy experienced a cyclical upturn over the last two years, so it is harder to tell whether restructuring efforts have borne fruit," he noted.

"The real test will come when the economic cycle matures - that is when the effectiveness of these policies will be more apparent."

Tight foreign manpower policies to stay for now: Heng Swee Keat
He says stance signals importance of raising productivity, but bears relooking in future
By Chia Yan Min, Economics Correspondent, The Straits Times, 19 Apr 2018

Singapore's tight foreign manpower policies will stay in place for now to encourage companies to transform, but there is room for review in the longer term, said Finance Minister Heng Swee Keat.

The Government is sticking to its stance in the short term to signal the importance of raising productivity, Mr Heng said at a media briefing yesterday. Relaxing the policy too soon may tempt employers to go back to their old ways, he indicated.

"Our priority in the coming years must be to continue to develop Singaporeans. At the same time, a well-calibrated inflow of foreign manpower can complement our people," he noted.

"We should not make changes too hastily because this needs to be sustained. If we don't sustain this effort and don't continue to invest, the substitution between machines and man will not happen. If I can get workers cheaply, why should I invest in machines?"

Mr Heng was responding to concerns raised by companies about Singapore's talent shortage, especially in fast-growing tech sectors such as cyber security, artificial intelligence and data analytics.

Companies have said that this manpower shortage is holding back growth, especially amid efforts to go digital and transform.

To help companies with this in the short term, the Government has launched the Capability Transfer Programme, which will support companies in bringing in foreign specialists to transfer skills to the local workforce.

Still, Mr Heng acknowledged that Singapore's approach to foreign manpower bears relooking in the longer term.

"Do we need to review this? Yes we do, in the coming years.

"But I don't want to send the wrong signal that changes are coming any time soon - then the pressure (to transform) will be lost."

Separately, Mr Heng encouraged companies venturing abroad to tap talent across the region.

He cited the example of an entrepreneur he met, whose company hired an employee from an ASEAN country who studied at a Singapore university.

"This young lady was so capable that after a year with the company, he sent her back to her home country and she headed a 100-person outfit there," said the minister.

"The more our companies can do this, the more they can make full use of the talent in the region - and our region is full of talent."

'Happy to continue' as Finance Minister after Cabinet reshuffle: Heng Swee Keat
Still much work to do at Finance Ministry, says Heng
By Chia Yan Min, Economics Correspondent, The Straits Times, 19 Apr 2018

Mr Heng Swee Keat would be "happy to continue" as Finance Minister following the upcoming Cabinet reshuffle, he said at a media briefing yesterday.

He added that there is still much work to be done at his ministry given the fiscal challenges Singapore is facing.

The minister was responding to queries on whether he is likely to hold on to his portfolio after the upcoming Cabinet reshuffle.

"I'll be very happy to continue my job as Finance Minister. There are many things that we need to do as I announced in the Budget," he said.

Mr Heng is among the three fourth-generation ministers touted to be in the running to become Singapore's next prime minister. The other two are Minister in the Prime Minister's Office Chan Chun Sing; and Minister for Education (Higher Education and Skills) Ong Ye Kung.

Before his appointment as Finance Minister in October 2015, Mr Heng was the education minister from May 2011 to September 2015.

He said the Finance Ministry will be kept busy in the coming years dealing with the challenges of allocating Singapore's limited fiscal resources.

"There are important expenditure needs that we need to provide for," he noted.

"We want to be able to make the best use of our resources to achieve economic and social impact, while maintaining a high level of security. Allocating the Budget across these different areas is a major challenge."

He "would like to give more thought" to these issues, the minister said.

Singapore as well as other countries around the world are also devoting more attention to international tax revenue collection, Mr Heng added.

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