TL;DR – Much wow.
The net gain in Singapore’s total employment for 2017 is likely to be “zero or negative”, much lower than the 8,600 recorded last year.
If you are one of those who just read the headlines and don’t read the full article, you might start bashing the government, blaming it for failing Singapore and Singaporeans. But if you finish reading this article, you will know that that’s not the case.
1. Local employment is likely to grow faster
While the data for the full year isn’t available yet, local employment this year is likely to grow faster, higher than last year’s figure of 11,200. In the first three quarters of this year, Singapore’s total employment (excluding foreign domestic workers) fell by 20,000. However, local employment grew by about 9,000.
How’s that possible? Simple. 43,000 jobs were lost in the marine and construction sectors. But that affected mainly the foreign workers, not Singaporeans.
That’s why Minister Lim Swee Say, Minister for Manpower, said:
“As we become more manpower lean, lower growth or no increase in total employment need not mean jobless growth for our local workforce, as long as local employment growth remains positive.”
If we continue at the pace of the last three quarters, then Minister Lim’s statement would be true. And that bodes well for Singaporeans.
2. Productivity is growing (finally)
Minister Lim was speaking at the Singapore Productivity Awards Gala Dinner. And he had reasons to be happy. For years, Singapore’s productivity growth was low, even zero. But this year, this year is different. Singapore’s productivity is expected to grow by at least 3% this year, hitting a seven-year high.
The last time we had productivity growth that’s higher than 3% was way back in 2010. That year, productivity jumped by a whooping 12%. But that was because of a cyclical rebound following the global financial crisis. Since then we have struggled to find a way to get our productivity growing.
And it’s important for us to get our productivity to grow. As the global economy changes, productivity growth is vital for Singapore’s continued progress. Minister Lim emphasised:
“Without productivity gains, we will eventually lose our competitiveness. Wages will stagnate too.”
That’s why we have been trying so hard to so hard to transform our economy and industries. This year’s productivity growth shows that our efforts are showing some modest results.
Minister Lim said that he transformation of 23 sectors which account for 80 per cent of the economy has seen “encouraging” response from small and medium enterprises. Yes, the same 23 sectors identified in those Industry Transformation Maps (ITMs).
In two years, more than 5,000 companies have joined the Lean Enterprise Development Scheme. The scheme helps SMEs “transform and grow in the new manpower-lean landscape”.
An example of a sector that has benefitted from is the manufacturing sector. Productivity gains have made the sector less reliant on manpower.
3. Economic growth based on productivity growth
GDP growth comprises manpower growth and productivity growth. As Minister Lim explained before, we are transiting from a “3+1 = 4” economy to a “1+2=3” economy.
In “3+1=4” economy, we have 3% growth in our workforce, plus 1% improvement in productivity to give us a 4% total growth potential in our GDP.
However, in “1+2 = 3”, we need to shift from manpower-driven growth to productivity-driven growth.
And this year, it seems like we might actually be able to do it. The fact that there is likely to be no net increase or even a decline in total employment means that most, if not all of the projected GDP growth for 2017 will come from productivity gains.
Good news for Singapore and Singaporeans?
If we can keep this up, it would mean that we have been successful in transforming our economy and industries. That would bode well for Singapore’s continued progress and prosperity.