Photo: Ministry of Communication

Cheap labour is a barrier to digital competitiveness

It is interesting to read that one of the reasons why Singapore has lost its top spot in digital competitiveness to the United States was due to Singapore’s  lackluster attitude towards the adoption of technologies and the agility of local businesses to transform digitally. It was also noteworthy that this lackluster attitude towards digital reform persisted despite a digital friendly environment and high levels of training. Is this incongruence due in part to a lack of incentive to reform?

Is Singapore’s access to cheap foreign labour and a pliant workforce a barrier to businesses updating their technology?  Businesses are after all profit driven. With many big businesses being publicly listed, their priorities are more often than not, to pay a short term gain to their investors rather than to focus on long term growth and development. If it is cheaper to just hire a cheap worker to do the job, why invest in better and more expensive software?

If there really is political will to boost Singapore’s digital competitiveness, there has to be systemic change. Simply providing digitally friendly environments and training will not be enough. The problem is not that we do not know how to use the technology but that it is simply not profitable to use it if cheap foreign labour is so easily accessible.

From the recent Trump-Kim summit, it is clear that Singapore wants to step proudly onto the world stage and take its place among the power brokers of the world. Now that we have stepped into the limelight, there are many other things that will have to change. Namely, we need to move from an economy that is padded by cheap labour fueled productivity to more high end and creative productivity. This is where digital competitiveness comes in.

Building infrastructure is only part of the battle. Moves have to be made to entice businesses to update their technology. I am not saying that Singapore no longer needs foreign labour. It is just that we cannot rely on cheap foreign labour as a crutch to prop up profits and GDP.

Like it or not, we are a first world country in the digital age. In order to maintain its global stature, we have to engineer a systemic change. If you want businesses to invest more in their digital capabilities, you have to provide some incentives. Otherwise, why would businesses change if they can still make more profit using cheap labour? It’s common sense isn’t it?