TL;DR – There are four main job categories for the 32,814 new jobs, and almost half are “digital jobs”.
Who tunes in to SPH’s business and personal finance radio station, Money FM89.3? I have to confess that I don’t usually. In fact, I haven’t touched or turned on the radio or TV in probably over a decade…
But a friend sent me an audio file of a FM89.3 interview where the Managing Director of our Economic Development Board (EDB) was doing a review of Singapore for the year 2019. I got curious and also cos I wanted a “shortcut” to better understand how our economy performed last year, I “invested” 15 minutes of my life to listen to it.
And whoa, not bad! Hehe, since sharing is caring, I’ve decided to be nice and give you the download link and also a transcript of the interview. If you think your friends and workmates will benefit from this information, share it around!
In The Economic Development Board’s latest year in review, Singapore exceeded its forecast for investment commitments last year, attracting $10.9 billion and are looking to sustain similar investment levels this year. Chng Kai Fong, Managing Director, Economic Development Board shares more on what EDB is doing right to ensure that Singapore is still attracting investors despite external issues. (17th January 2020)
Manisha: Let’s talk about Singapore. We’ve been talking so much about global trade and big, macro matters, but Singapore’s Economic Development Board (EDB), the government agency under the Ministry of Trade and Industry (MTI), which is responsible for strategies that enhance the country’s position as the global centre for business, innovation and talent, have been in the news this week.
Elliott: Yea, they’ve got a mission to create sustainable economic growth with vibrant business and good job opportunities for Singapore and Singaporeans. Well, in EDB’s latest Year-in-Review, Singapore exceeded its forecast for investment commitments last year, attracting $10.9b and they’re looking to sustain similar investment levels this year.
Manisha: And just like a slowing economy amid trade tensions between US and China which we keep talking about, Singapore again expects to draw between $8b to 10b in fixed asset investments this year, the same forecast it made last year, and surpassed.
Elliott: So what is EDB doing right to ensure that Singapore is still attracting investors despite external issues? Well, in the studio with us this morning is Chng Kai Fong, Managing Director, Economic Development Board (EDB). Kai, good morning and welcome!
Kai: Good morning, Elliott! Hi Manisha!
Elliott: Thanks for taking the time. I just wanna clarify. You’re calling this EDB’s Year in Review?
Kai: Yea, Year in Review is just our annual report, or annual results.
Elliott: And it was released yesterday?
Kai: It was released yesterday, ya.
Elliott: Tell us more about it.
Kai: It was a good year for us. You know, we entered this year full of uncertainty – US trade tensions, volatile markets and all that. So it was actually a very good and surprising year for us to be able to exceed both in terms of fixed asset investments, our forecast was between 8 to 10, we hit 15, we’re supposed to created 16,000 to 18,000 jobs, we created close to 33,000 jobs.
So all in all, it demonstrates the strong confidence investors have in Singapore.
Manisha: So why were these results better than expected? I mean, just drilling down the numbers, EDB attracted investment commitments of $15.2b in fixed asset investments, $9b in total business expenditure per annum, better than expected. And when these projects are fully implemented, how would they benefit Singapore?
Kai: Well, it ultimately leads to jobs, leads to more opportunities, not just for the workers, but also for the linkages and the SMEs and the companies all around. So all round, it just demonstrates confidence in our potential and our growth. And it all lead to more growth in the future.
Can I just say that many people think that “Oh, it’s because of hard work and all that…” Actually at the end of it, it’s about the product that we sell. And the product that we sell, you know, there’s this saying, right? You can’t put lipstick on a pig.
But the product that we sell is Singapore. And Singapore’s value proposition is very strong.
For a couple of reasons.
One, Asia is growing. You know, the middle class in Asia is particularly growing at a fast rate. And if you’re a company from US and EU, you’re looking to diversify, you’re worried about markets in the development markets, look to Asia! And you’ll see thriving cities, vibrant cities. You look at people, in the past they used to just buy, maybe, 20-cents or 50-cents coffee, the other option was way off to the other extreme, like Starbucks $8, $9. Now you have hipster coffee, cappuccinos, $4, delivered to your doorstep on an app. So actually the region is on the move and Singapore is right at the hub of it and we benefit. That’s one.
Secondly, in this uncertain environment, people like trust, stability. You know, you can be sure that if you sign a 30-year lease, Singapore’s gonna honour that 3-year lease. So that gives people confidence.
And finally, we just have many useful capabilities in our economy that are complementary to the opportunities in the region. So for example, we talk about digital transformation, we talk about how manufacturing is becoming more Industry 4.0, you need a good, skilled workforce that is dedicated , that is responsible, but also that can learn new things. And Singapore checks all the boxes.
Elliott: Nice… Well, this story is front page of the Straits Times this morning, close to 33,000 jobs to be created this year as a result of these opportunities. Focusing on the jobs, what kind of job roles are we expecting? What kinds of industries are we expecting these jobs to come from?
Kai: Let’s look at it from two perspectives. One perspective is industries, and they come from a variety of industries. It shows that there are opportunities. Even as industries change and restructure, there are opportunities there.
The other dimension we look at is the kind of jobs. We broadly classify them as four kinds of jobs.
One of them is digital, that makes up 49% of the jobs we created. I hope people don’t takeaway jobs as “Oh, digital jobs, that’s not for me cos I don’t know computer science, I don’t know programming…”
It just reflects how jobs are changing, how data is becoming important, so even if you’re not a programmer, the Accenture CEO just said recently, “Every company is a digital company.”
And in future, probably every job is going to be a data job, so that’s why the SkillsFuture thing is quite important.
So that’s one, there’s Asia. There’s digital. There’s innovation jobs. So it points to the fact that now, you have this region on the rise, you have technology coming in, so you need to create new products, new services. So innovation is about “Am I a product designer?”, “Am I a product manager”, “Do I understand the region well, the region’s consumers well?” Then there’s jobs covering Asia, because Asia is growing.
And finally, production jobs, things to do with supply chain, things to do with making sure that the goods get from the factory floor all the way to the consumers.
Manisha: Despite all of the economic uncertainty, we’ve been talking about the US-China trade war a lot on the show, the investment commitment number are still pretty strong in Singapore. I’m really intrigued to understand how you managed to do that. I mean, did you all get together last year and say, “OK, here are all the possible challenges on the horizon, and we’ve got to mitigate against them.”
Kai: Oh, we do that every year, year on year, no matter what the environment is. But as I said, you can’t put lipstick on a pig. And you know, if our product is bad, frankly no matter how eloquent our salesmen are, it’s gonna be very difficult to sell. And I think we have every confidence that Singapore IS attractive to investors.
I mean, to be fair, we’re not a low cost location.
And there’re also many people out there who are also trying to attract investments and all that. So we do have to have some strategy in terms of the kinds of investments we can attract. That’s one. We also have to remember, or we have to take into account that it’s actually easier for us let’s go for the highest paying jobs, let’s go for the highest value-add jobs. But then you may end up with a one-track economy, whether it’s in finance or we will have a whole host of programmers and all that. And that something that we really want? Is that something that Singaporeans can actually aspire to?
So we have to think about OK, what are the kinds of Singaporeans do we want to create good jobs and opportunities for? So it’s that diversity of jobs spanning multiple industries that we’re pushing for.
Elliott: So time for me to get a little controversial, Kai!
Kai: Go for it, Elliott!
Elliott: So you know Manisha is what I like to call “foreign talent”. But I’m OK with it. She’s a friend…
Manisha: I’m sinking behind the mic right now…
Kai: Why are you OK with it?
Elliott: Because I see the word “talent” before “foreign”. Talent is talent, right? But there is a split, there’s a lot of buzz of the split between jobs, between what Singaporeans get, what PRs get, what foreigners get.What is your take on this?
Kai: Well, ultimately we all exist to grow the economy for Singaporeans. So that’s a given, and that’s non-negotiable. The question is HOW. So one of the reasons why we want talents like Manisha is because they make us better. OK, imagine if you have this show without her.
Elliott: Oh, it will not be as good for sure.
Kai: Exactly! They will switch it off, right?
Elliott: No no, they won’t. Maybe half lah, half will go…
Manisha: I’m staying silent…
Kai: But seriously, what we want is to have that complementary talent. Ultimately, that must lead to more opportunities and better jobs for Singaporeans.
So if you think about it, take for example the digital sector, that’s really growing really fast. And if you just spend your time in Singapore alone, working in companies here, you may not get the same kind of exposure as you would if you went to China or even the Silicon Valley.
Take for example, Facebook. Billions of users on its app. Imagine you’re an engineer there and you’re dealing with billion-user scale systems. Or in China, suddenly you have to serve videos, TikTok, hundreds of millions a day, or by the minute. And how do you get experience in building that kind of architecture if you’re just in Singapore? So we need to get a fair amount of good talent to come in.
And more importantly, it’s like the Star Wars, right, you get the Jedi Masters to come in, they train the Padawans, and then the Padawans will become Jedi Masters in future. It’s not just that companies are setting up more products here or doing fun stuff here, that’s how you attract talents in. It’s also creating those pathways for Singaporeans. But more importantly, you learn these skills, you then go out, you then create your own products and then you have the ability to sell to billions of users around the world. That’s the strategy.
So it’s all centred on Singaporeans.
We just gotta make sure we bring in the right foreigners to really complement us, to train us up, but also to work alongside us, work with us and for us as we build global products and services.
Manisha: I mean I have to say I’ve been in Singapore now for more than four years. I see Singapore having its own Jedi Masters going out there, showing the world. But I guess it’s about getting that split right, isn’t it? And I wonder how you figure out that split? How do you figure out the percentage that works?
Kai: There’s no exact science to this. I’d just say it’s a broad rule of thumb. If you’re trying to grow an industry or an industry on the move, you’ll probably need a little bit more of the Jedi Masters to come. And again, the tech industry is a classic example cos it’s a rising industry.
Yesterday we held our annual results at Shopee, a Singapore company. They started in Singapore, let me sidetrack and do a plug, right… I was surprised that last year, 2019, worldwide app, the most downloaded app for games came from Shopee, a Singapore company – Free Fire.
How did that happen? I don’t think that could have happened if it wasn’t a diverse company that had complementary talents going around.
Elliott: Are you a fan of Star Wars? Cos you keep referencing Jedi Masters.
Kai: I’m not a fanatical fan. I just watch Star Wars, that’s all.
Elliott: Let’s talk about EDB’s commitment goals. What’s the aim for this year?
Kai: So everyone asked me, what’s next year’s forecast gonna look like, right. We decided not to predict year on year, but as a commitment year on year in the medium to long term, say, five years, to keep it simple, $8b to $10b in terms of fixed asset investments. That’s really putting stuff on the ground, buying equipment, that sort of things. And $5b to 7b in terms of total business spending, that’s spending on wages, spending on services. Then 16,000 to 18,000 jobs. That’s our commitment.
If you actually observed us over the last few years, we’ve just been giving the same guidance every year. And I think that’s reasonable cos a lot of these projects… you know, people don’t investment decisions like they wake up one morning and say, “Oh, let’s put a $2b investment in Singapore!”
Nobody does that.
You go through many different stages. You have to have a beauty contest because everyone wants your investment. You think through what the macro trends are, is this country going to grow, is this market suitable for my products, do I need some time to innovate? So we figured a medium to long term projection reflects how investors think about it. But next year, we’re cautiously optimistic that we can exceed those forecasts, particularly in fixed asset investments. Again, because decisions are not made overnight, so we have a sense of what companies are thinking about. We’ve been talking to them. Hopefully we can close some of these deals and we’ll come in over that mark.
Manisha: I’ve a bit of a question I’ve been asking and sometimes people won’t be drawn on it. But I’m curious to get your take.
Kai: Go for it.
Manisha: The question is actually about Hong Kong. Nobody wants to profit from someone else’s problems, but are you seeing the Hong Kong effect in Singapore? Are we seeing business move from Hong Kong to Singapore?
Kai: Fair question. Maybe we should say what happened in Hong Kong actually is worrying and sad for us. So maybe even if we have a slice of cake from them, the overall cake becomes smaller. Singapore actually benefits from stability in the region.
And to be honest, Singapore does not profit or benefit from being Singapore alone. We benefit only because of the region. If the region is unstable and things are not looking good, investors will sorta say, “Hey, let’s not go out to Asia, let’s just stay where we are, and maybe just expand our brown field investments a bit” and then we will be worse off.
So first of all, my heart goes out to Hong Kong for that.
Secondly, I’d say the trend happened sort of 5 to 10 years ago, we have different value propositions. Often when I meet investors, and they say they want to grow in the China market, and Hong Kong is such a strong competitor, and it’s really really difficult to win them over. Because they’re a great gateway, and China is an amazing market. Singapore’s access in that sense is not as strong as what Hong Kong can offer.
But we have some things to our advantage. We’re in ASEAN right now and that’s riding high on potential. We are also pan-Asia, if you’re looking for your first stop, maybe you want a bit of China, a bit of India, you want Southeast Asia, Singapore is not a bad place. We speak English. Very business-friendly. Highly connected. Logistics is great. We do have some things going for us.
Elliott: We’ve been speaking to Chng Kai Fong, Managing Director, Economic Development Board. Kai, thank you for taking the time this morning. Have a good weekend in advance.
Kai: Thank you!
(Featured image via)