Productivity growth needed for Singapore to remain relevant in next 50 years

L-R: Moderator Tan Su Shan, EDB chairman Dr Beh Swan Gin, executive chairman of Banyan Tree Holdings Ho Kwon Ping and former civil service veteran Ngiam Tong Dow. Photo from DBS Asian Insights Twitter.

Singapore’s Jubilee has been feted as a year of celebration and pride in the city-state’s achievements, but the outlook for the next 50 years remains more uncertain.

The opening plenary of the fifth DBS Asian Insights Conference sought to explore the possibilities and challenges of another half-century in Singapore, flitting from issues like productivity to civil servant pay to freedom of expression in the space of an hour.

“Survival is a foregone conclusion, although all of us know that in Singapore we like to be paranoid,” said Executive Chairman of Banyan Tree Holdings Ho Kwon Ping. “The bigger danger for Singapore economically and globally is whether we’ll lose our relevance, whether we become a second-tier city-state as opposed to first-tier.”

Ngiam Tong Dow, a former high-ranking civil servant, said that the People’s Action Party had inherited a “stagnant economy and crumbling city”, requiring plenty of work in growing industries and development. While Singapore had achieved some success, “we knew there are hungrier people chasing us.”

Singapore’s new challenge, then would be to maintain its dominance as a “knowledge-based economy in a globalised world”, said Ngiam, adding that he was disappointed in the way that the country’s productivity level has been stagnating.

Dr Beh Swan Gin (image – Economic Development Board)

Dr Beh Swan Gin, chairman of the Economic Development Board, said that the although attracting foreign investment is still important, the government is also focused on getting employers to improve productivity within their companies as well as creating new business services and products.

Dr Beh said that movement towards robotics in industries would have “immense impact on sectors like manufacturing as well as the delivery of services… we will see a sea change whereby there will be a complete blurring of blue collar/white collar jobs.”

“The CEO should become the Chief Productivity Officer,” said Ngiam, encouraging high-ranking executives to “lead from the front” in their companies instead of simply issuing orders from the comfort of their offices.

“Actually for Singapore we have seen dismal productivity numbers partly because we have increased the labour participation rate from women who have been staying at home and the elderly. And many of them prefer to work part-time. But as a result we’re having, at a national level, very paltry productivity growth numbers. But if you look at specific sectors, manufacturing: 2.9 per cent annual productivity rate increase over the last 10, 15 years. So sectors are doing well,” Dr Beh said.

Questions flooded in from the floor through digital platforms, with people up-voting their favourites. One dealt with the issue of pay for civil servants, asking if high salaries in public service was causing a shortage of talent in the private sector.

“I think if you look at Singapore compared to our neighbours I would clearly say, if we have to err, I would rather err on the side of overpaying our civil servants,” Ho said. “Is it better to underpay or overpay? I would err on the side of overpay, because then you get the best talent… how do we get to be where we are today with our ranking in the world as one of the least corruptible societies in the world? Because of the leadership setting, by Lee Kuan Yew before in terms of paying civil servants and politicians very high.”

Dr Beh felt that changes had to be made to the way Singapore chooses its civil service leaders. “In Singapore we need to re-think the concept of meritocracy because what we have today is one-dimensional. You get good grades, you progress, you go to university, you get a good white-collar job and you’re set for success,” he said. “And in reality there are multiple paths of success today, and certainly going forward, life will not be so straightforward… We should recognise talent in different ways.”

He also added that Singapore had previously selected civil servants based on their intellectual skills, but that this would no longer be enough. Civil servants should also be able to connect to the ground and “rally the people around them.”

“Going forward this needs to shape how we conceive of meritocracy,” he said.

When asked about the young “silver spoon” generation and their participation in Singapore’s future, Ho remained optimistic.

“Every generation is the ‘pioneer generation’ and the next one is ‘spoiled’. And I think when you do that you become somewhat condescending to the younger generation,” he said. “I think every generation – and I see it in today’s generation – is passionate about the future, they have a greater sense of self-agency than we have, they don’t wait for the government to do things for them.”