Road to Recovery: Singapore's Journey through the Global Crisis

APPENDIX III: Summary of the Economic Stategies Committee (ESC) Key Recommendations 1 February 2010

APPENDIX III Summary of the Economic Strategies Committee (ESC) Key Recommendations 1 February 2010 High-skilled People, Innovative Economy, Distinctive Global City We must make skills, innovation and productivity the basis for sustaining Singaporeʼs economic growth. This will also provide for inclusive growth, with a broadbased increase in the incomes of our citizens. We must also be a vibrant and distinctive global city — open and diverse, the best place to grow and reach out to a rising Asia, and a home that provides an outstanding quality of life for our people. ESC Key Recommendations We must achieve higher productivity growth of 2 to 3 per cent per year, enabling our GDP to grow on average by 3 to 5 per cent per year over the next decade. 09฀RtR.indd฀฀฀181 7/12/10฀฀฀5:28:56฀PM 182 Road to Recovery Increased productivity is not achieved merely through increased efficiency, but restructuring our economy to provide more room for rapidly growing and innovative enterprises. 7 Key Strategies 1. Growing through skills and innovation a. High-level national council to oversee and drive efforts to boost productivity and expand CET (Continuing Education and Training) to ensure national level coordination of government agencies and close collaboration between public and private sectors. b. Encourage enterprise innovation and investments in technology and training, both through broadbased and targeted sectoral approaches. • Introduce strong economy-wide fiscal incentives for companies to invest in productivity enhancement and innovation. • Set up a National Productivity Fund to provide grants to support industry-focused and enterprise-level productivity initiatives at the sectoral level. c. Upskill workers at all levels through enhanced CET system. • Multiple skills-based progression pathways to complement academic route. • Reach out to more PMETs. 09฀RtR.indd฀฀฀182 7/12/10฀฀฀5:28:57฀PM Appendix III 183 d. Strengthen support for low-wage workers through enhanced Workfare Income Supplement (WIS) scheme, and additional support for training. e. Manage our dependence on the foreign workforce by raising foreign worker levies in a gradual and phased manner. • Also raise the quality of the foreign workforce and encourage employers to retain skilled foreign workers by increasing the skilled levy differential 2. Anchor Singapore as a Global-Asia Hub a. A key Global-Asia hub for global players seeking to tap on opportunities offered by a rising Asia, and for Asian enterprises looking to expand beyond their home markets. b. A globally competitive manufacturing sector at 20–25 per cent of the economy, with emphasis on knowledge-intensive manufacturing (e.g. bio-electronics), and taking advantage of the convergence of manufacturing and services (e.g. headquarter operations, clinical trials for new drugs and IP management services). c. A trusted financial and modern services hub — through deepening existing capabilities in sectors such as ICT, financial, logistics services, and new areas such as consumer-centric intelligence. d. A leading consumer business centre — where businesses gather consumer insights and test-bed 09฀RtR.indd฀฀฀183 7/12/10฀฀฀5:28:57฀PM 184 Road to Recovery products and services meant for a range of markets across Asia. e. Location of choice to test-bed “future ready” urban solutions that can be exported to Asia and the world. 3. Build a Vibrant and Diverse Corporate Ecosystem a. Develop a deeper base of globally competitive Singapore enterprises (to grow 1,000 Singapore enterprises with revenues over SG$100 million by 2020). • Catalysing cross-border financing capacity: Plug gaps in financing capabilities through marketbased solutions and institutions — aimed at providing risk and credit insurance for trade finance; guarantees for loans by commercial banks and guarantees and possible co-financing for project finance. This could involve establishing an EXIM bank-like specialist financial institution. • Growth capital for growth-oriented enterprises: Seeding public-private investment fund to supply up to SG$1.5bn of new capital for growth-oriented SMEs based in Singapore in the next 10 years. • Empowering Trade Associations and Chambers: Strengthen institutional capabilities to serve as industry champions and market facilitators for our companies to expand overseas. 09฀RtR.indd฀฀฀184 7/12/10฀฀฀5:28:57฀PM Appendix III 185 b. Establish Singapore as [the] premier location in Asia for MNCs, global mid-sized companies, and Asian enterprises seeking to internationalise, through developing deeper market knowledge and expertise with a pan-Asian focus and facilitating their quick...