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Minister of Manpower Lim Swee Say warned that Singapore’s competitive superiority in offering products and services that are cheaper or better, is at risk.
The Minister said that cheaper competitors are getting better with higher educational levels, and competitors using better technology are producing cheaper products.
He warned, “If productivity gains continue to lag behind wage growth, Singapore’s competitiveness will slide down.”
Minister Lim delivered this warning on Tuesday (1 Nov) at the first day of the two-day 2nd Singapore Productivity Conference and Exhibition organised by the Singapore Business Federation at Suntec Convention and Exhibition Center.
He reminded that Singapore’s productivity growth were flat in 2015 and 2016, and combined with flat local workforce growth, it has caused Singapore’s sharp drop in GDP growth.
Between 2011 and 2014, workforce growth at 4 percent caused also 4 percent in GDP growth, despite no gains in productivity.
And in 2015 and the first half of 2016, also with flat productivity growth and 2 percent workforce growth, GDP growth was only around 2 percent, said Mr Lim.
He then warned again, we will face the same problem next year.
He noted, “We cannot hope to go back to high growth simply by taking in more foreign workers.”
More than that, Mr Lim pointed that there was a recent structural transition in the local workforce.
He explained, “With better education and skills, those entering the workforce are looking for jobs different from the jobs vacated by those who have left. What this means is that economic transformation is important, not just because they will bring about higher productivity for the economy.. but because they will bring about better jobs and better wages.”