Productivity push must continue: PM

SINGAPORE — The Government is aware of the difficulties companies here are facing as Singapore pushes for economic restructuring, but improving productivity is now more important than ever given the Republic’s current economic and manpower constraints.

Prime Minister Lee Hsien Loong said this yesterday as he launched the National Productivity Month (NPM), adding that Singapore will succeed in this current push following decades of similar efforts.

“I know that many businesses and workers are trying hard to cope with change — and indeed it’s hard,” Mr Lee said in his opening address to about 800 business leaders attending the event. “We do have some challenges in changing social attitudes that overvalue paper qualifications … In several sectors, progress in upgrading productivity has been slow, such as construction and some services industries.”

Mr Lee’s comments come as productivity growth remains mixed in recent years despite the slew of Government support policies. In the second quarter this year, overall productivity shrank by 1.3 per cent year-on-year as the retail, construction and food services sectors recorded declines.

Still, he was upbeat. Saying that the productivity push is a nation-wide effort, Mr Lee added: “Looking at our productivity journey over the last half a century, we can be optimistic that our restructuring journey will be successful.”

He was referring to Singapore’s efforts to raise productivity levels since the 1970s when the National Productivity Board was set up. In 1981, then-Prime Minister Lee Kuan Yew had also launched a National Productivity Movement in an effort to boost Singapore’s labour skills and productivity levels to those of the advanced economies.

And now, as Singapore transforms into a developed economy with a slower growth rate and tighter manpower supply, productivity has become “more important, not less”, Mr Lee noted. “Not only is productivity important to grow our economy, but it’s also crucial for raising the income of workers,” he said.

To this end, the Government will continue with its three-pronged approach — by treating productivity as a national effort where everyone has to play a part; as well as supporting companies in their productivity investments and encouraging mindset change among employees and consumers. Urging Singaporeans to be open to change, Mr Lee said: “Customers must be ready to embrace new business models, such as self-service formats.”

The other prong is controlling foreign worker inflows. But as foreign employment growth in the second quarter fell to the slowest pace since 2009, Mr Lee sought to reassure businesses, saying, “As I said last week, I do not expect any further major measures to tighten our foreign worker numbers. We will give companies time to adjust to the measures and to re-tool themselves.”

The Singapore Business Federation — which co-organises the NPM with the Singapore National Employers’ Federation — welcomes that decision, its chief operating officer Victor Tay told TODAY. “The next two years will be essential for businesses to deliver more sustained productivity improvement, following years of mixed progress. So the Government’s pledge to cease further curbs is important, because it gives business clarity and certainty,” he said on the sidelines of the NPM launch.

Also combining the efforts of several Government agencies, the NPM will go on until Oct 30, offering exhibitions, workshops, seminars and overseas study trips to highlight innovative productivity solutions, especially for less productive sectors such as retail, food and beverage, and construction.

And investments in these solutions are quite affordable now, even for small and medium enterprises (SMEs), SBF chairman Teo Siong Seng said. “There is no lack of technologies, and there are a lot of Government schemes — such as the Productivity and Innovation Credit scheme — that SMEs can tap. The challenge of improving productivity is not so much about costs. It is really more about companies’ willingness to try to adopt changes to their processes and mindset,” he said.