SINGAPORE – Singapore will spare no time and effort to help its people and businesses build the capabilities that ensure they remain competitive in a more globalised and yet uncertain world, said Trade and Industry Minister Chan Chun Sing.
With a small domestic market, scarce land and labour resources, Singapore will always have to compete in global markets for trade and investment opportunities and for that, it needs its workers and companies to have the right expertise and capabilities, Mr Chan said at a business summit organised by AmChams of Asia Pacific – an umbrella organisation of 28 American Chambers of Commerce in the region.
“Unlike many other countries, we never believed that we can survive on the basis of a local market or domestic market. We’ll always have to compete on the basis of the global market and our people will need the kind of skill sets necessary to operate in the global environment,” he said.
International trade accounts for about 300 per cent of Singapore’s gross domestic product and drives its export-focused manufacturing and services sectors which boost economic growth.
Thus, the Republic does not consider global trade and competition as something its workers and businesses need protection from.
“We don’t think that we can keep out the competition. And we don’t think that it is the correct strategy to try to protect our people from the competition. The correct way for us to approach this challenge is to make sure that our businesses and our people are up to scratch with the relevant skills and networks, so that they can compete at a global level,” Mr Chan said.
Geopolitical tensions – including the United States-China trade war – worries about technological disruptions and the turmoil caused by the Covid-19 pandemic have further aggravated such protectionist tendencies.
“Of course, in politics, if we choose the easy way out, then it is easy for someone to jump up on the stage and say that, well, I will up the drawbridge, shut out the barbarians and we will live happily ever after. Now that can work for a while, but that is definitely not a sustainable strategy for the long term,” said Mr Chan.
He said that every country will need to seriously invest in the continuing education of its people, in order for them not to be displaced and become irrelevant or have their skills become obsolete.
“The competitiveness of a country depends on the competitiveness of its people, its enterprises, its research and development, its investment in infrastructure,” he said.
Mr Chan said all countries would like their workers to have a higher quality of living, higher purchasing power, earn the best wages and have the most competitive prices for the products that they consume.
But that cannot be achieved by imposing artificial barriers to avoid the competition in an unrealistic and unsustainable way.
“The best way for us to protect ourselves from the competition is not by shutting out the competition, but by taking the bull by its horns and building up real capabilities for us to create new niche areas for ourselves.”
To remain globally competitive as an economy, Singapore also plans to entrench its role as a high-quality business hub, connected with the global value chain by having niche capabilities to add value to the relationship that it brings to bear with companies worldwide.
Mr Chan said the role of business hubs will evolve, as the traditional roles that hubs played in just congregating people together will be less relevant in a world where people can work from home or work from anywhere.
“But going forward, there will still be a role for global business hubs. My sense is that they will be fewer, but of higher quality. And this business hub will be really places where companies and businesses can mobilise capital, aggregate talent and protect intellectual property,” he said.
The minister said that many of the lower value-add functions of the previous business hubs will be outsourced and off-shored to other places in a much more decentralised fashion.
“The real important work in generating intellectual capital, aggregating talent and mobilising capital will belong to a few of the select and high-quality business hubs. And for Singapore, we intend to be one of these global business hubs that offer such propositions to the business community.”
Singapore also needs to ensure that it continues to entrench itself in critical parts of the global value chain to deal with the disruption in the production and supply chains patterns.
“We are not like bigger countries where we can compete on the basis of price, labour or land, we will need to compete on the basis of the quality of our ideas, the intellectual property that we can generate. And we need to be quite selective in the areas that we compete in, in the different value chains.”
Mr Chan mentioned the specific policies aimed at achieving those goals including the Advanced Manufacturing 2030, Singapore Green Plan 2030 and the Healthy Living Master Plan.