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3 ways to look at Singapore’s labour productivity situation



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At the Singapore Productivity Awards Gala Dinner 2017 on 24 November, Lim Swee Say, Singapore’s Minister for Manpower made some key points on national productivity, summarised below.

  1. “Productivity growth is critical to our future progress,” Minister Lim said, making the point that: “Without productivity gains, we will eventually lose our competitiveness. Wages will stagnate too.”
  2. Progress on transforming Singapore’s economy to be more innovative, and the workforce to be better skilled and more productive:
    • Manpower growth has slowed from 4% a year in 2012–2014, to 2% in 2015, and 1% last year.
    • Productivity growth, having stayed flat in 2012 – 2015, went up to 1% last year.
    • This year, likely to see no net increase or even a decline in total employment.
    • Most, if not all of the projected GDP growth of >3%, will come from productivity gains.
  3. Does no growth in total employment this year mean Singapore is heading for ‘jobless’ growth? And if productivity keeps improving, will there not be enough jobs for locals? Minister Lim responded to questions such as there by making these points:
    • In Q1-Q3 2017, the total employment (excluding FDW) dropped by 20,000 – however, local employment did not drop because the loss of 43,000 jobs in the marine and construction sectors affected mainly foreign workers. For the whole of this year, net gain in total employment is likely to be zero or negative, much less than the 8,600 recorded last year.
    • Second, productivity growth needs to be sustained to improve the quality of local employment, citing the example of manufacturing, which has overall become more manpower-lean. Other examples are finance, professional services and wholesale trade.
    • Yet there are sectors that continue to see a decline in local share of employment: F&B services, admin and support, accommodation, retail, and community, social and personal services. “These sectors will need to do more to embrace change, redesign jobs, upgrade skills, improve productivity and wages,” pointed out Minister Lim.
    • Productivity growth must be pervasive: With 23 sectors that account for 80% of the economy undergoing the Industry Transformation Maps, Minister Lim noted that the response from SMEs has been encouraging, with the Lean Enterprise Development Scheme participants having more than doubled this year, totalling more than 5,000 companies in two years.

“At the end of the day, we should never forget that productivity growth is more than making our economy more innovative and competitive,” said Minister Lim in conclusion.

He added: “It is also about making our workplace more caring and inclusive for everyone: young and old (age), high and low (wage), local and foreign.”

Photo / 123RF

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