06 March 18 The Business Times by CHIA YAN MIN
SINGAPORE companies have only a narrow window of opportunity to ramp up their digital transformation efforts and raise productivity over the next few years, Finance Minister Heng Swee Keat has said.
This is because challenges surrounding the country's ageing population and shrinking citizen labour force will become increasingly acute in the next five years, he said at a post-Budget forum organised by Chinese daily Lianhe Zaobao.
Companies therefore have to use this short window to restructure and transform digitally, he told the audience of 200 at Novotel Singapore on Stevens.
The minister was responding to comments from business leaders on a panel, who said Singapore's manpower shortage is a key concern for companies, especially as they ramp up their digital transformation efforts.
Singapore Business Federation chairman Teo Siong Seng said this challenge is affecting companies' competitiveness and asked whether the government is relooking its manpower policy, especially in view of the country's ageing population.
In his response delivered in Mandarin, Mr Heng acknowledged that Singapore's demographic challenges will put "growing pressure" on the economy in the coming years.
"This means companies have a very small window within the next few years to ramp up transformation and raise productivity."
He added that there will be no major tweaks to Singapore's foreign manpower policy in the coming years, to encourage companies to stay the course with restructuring.
This will stand Singapore in better stead to cope with its demographic challenges in the years ahead, he said.
Keeping older workers and seniors active is also becoming increasingly important as the population ages, Mr Heng said.
Ultimately, Singapore will remain open to top talent, he added, even as the government takes a more targeted, sector-specific approach to restructuring to help businesses accelerate their transformation.
Two other business leaders on the panel - Singapore Chinese Chamber of Commerce & Industry (SCCCI) president Roland Ng and Singapore Manufacturing Federation (SMF) president Douglas Foo - highlighted the importance of encouraging companies to collaborate in sharing resources or investing abroad.
Trade associations can play a key role to facilitate these partnerships, they noted.
Mr Heng agreed, adding that there is significant scope for Singapore companies to work together - even if they are competitors.
"Each company can have its own market or niche while collaborating on certain common areas, like sourcing for materials or training workers," he noted.