Speech at Aeroprofessional: Human Capital

Mr Gan Kim Yong, Minister for Manpower, Grand Mercure Roxy Hotel

Distinguished guests

Ladies and gentlemen

Good morning. 

Introduction

1. It is my pleasure to join you for the inaugural “AeroProfessional: Human Capital session”. I want to thank the Association of Aerospace Industries Singapore (AAIS) for inviting me.

   Global Aviation Outlook

2. The world airline industry has been through a tumultuous time over the past two years. The global downturn added great uncertainty to air travel as the world weathered the effects of a major financial crisis. Just as the industry was coming out of the woods after a year of gloom, it faced another setback with the volcanic ash crisis in Europe earlier this year. Hence, I am glad to note that the recovery of global airline traffic is finally gathering pace.
3. The International Air Transport Association (IATA) recently announced its June forecast of a profit of US$2.5 billion in 2010, a major turnaround from its previous forecast in March of a US$2.8 billion loss. IATA also expects industry revenue to reach US$545 billion this year, with Asia-Pacific carriers leading the recovery. Here in Singapore, almost 946,000 visitors landed on our shores in May – registering a sixth consecutive month of record visitor arrivals1. These positive signs reflect increased optimism and greater opportunities for the aerospace industry.

   Overview of Singapore’s Aerospace Industry

4. Since 1990, Singapore’s aerospace industry has grown at an exceptional average rate of 12% per annum. Today, we are Number 1 in Asia for the aerospace maintenance, repair and overhaul (MRO) market and command 7 to 8% of the global market share. Our industry output was $7 billion in 2009, employing an estimated 18,000 staff.
5. Outsourcing and internationalisation of the industry has greatly benefited Singapore. Who would have thought that Rolls-Royce would decide to assemble and test Trent aero engines in Singapore - a nation-state with only one commercial airport? Indeed, Rolls-Royce and other leading aerospace players’ investments in the Seletar Aerospace Park demonstrate that Singapore, despite our size, is well-equipped to capture the global demand for aviation-related services. Besides our strong technology orientation and global connectivity, a major reason that sets us apart is the presence of a highly-skilled workforce.

   Growing the Aerospace Industry’s Talent Pool

6. The Ministry of Manpower (MOM) has been working together with the Singapore Workforce Development Agency (WDA) to support the growing manpower needs of the industry, which is expected to create 10,000 new jobs with the completion of the Seletar Aerospace Park in 2015.
7. In 2008, WDA developed the Aerospace Workforce Skills Qualifications (WSQ) framework to train MRO technicians. Since then, more than 80% of companies in the MRO sector recognise the Aerospace WSQ, and over 35% have trained their workers in this framework. More than 1,000 workers have also undergone training, and with over 2,000 Statements of Attainment (SOA) issued.
8. The industry also plays a key role in raising the skills of the workforce.
9. I am pleased to note that Rolls-Royce and SIA Engineering Company have been working closely with WDA to establish a common view of training needs and broaden the existing Aerospace WSQ structures. More details on this will be announced soon. Such close collaboration and development of high value-added skills by industry players for the industry is the way to go. This will boost the quality of the talent pool, help Singapore move up the aerospace manufacturing value chain and contribute to our goal of becoming a prime destination for aerospace-related training services for the region. This will also enable Singapore to maintain our foothold as the leading regional aerospace hub.
10. Besides industry partners, WDA has also partnered several renowned training institutions, such as the Lufthansa Technical Training and Air Transport Training College (ATTC), to align the Aerospace WSQ modules with the industry’s aerospace training programmes. One individual who benefited from these efforts is 25-year-old Muhammad Rizal who found employment with SDV Logistics after completing his Specialist Diploma course in Aircraft Maintenance & Engineering course at ATTC. He currently manages the inspection of incoming aircraft parts.
11. WDA and NTUC’s Employment and Employability Institute (e2i) are developing a “Place and Train” programme for aerospace technician positions. When launched, this programme aims to train 300 technicians under the WSQ framework over 2 years.
12. A scholarship programme has also been developed to groom promising executives, engineers and managers for key leadership positions in aerospace companies. The scholarships are tied to two new bachelor degree programmes with SIM University and Embry-Riddle Aeronautical University to offer further education and training opportunities for aerospace engineers and managers.
13. While progress has been made to expand the talent pipeline, it is worthwhile for the aerospace industry to adopt a strategy that is productivity driven to achieve sustainable and inclusive growth.

    Productivity in the Aerospace Industry

14. Overall, Singapore aims to achieve 2 to 3% annual productivity growth over the next decade. At the heart of the matter is a slowdown in productivity, which was only 1% over the past ten years. The Government has embarked on a multi-sector national productivity movement, coordinated by the National Productivity and Continuing Education Council (NPCEC).
15. While there is room for productivity improvement in every sector of our economy, I am heartened to note that the aerospace industry has proactively taken steps to align itself with the national productivity agenda. A case in point is ST Aerospace Engines which adopted the Japanese improvement or “kaizen” methodology in 11 different work processes. One of the projects involves the optimisation of the CFM56 Engine. New tools were designed and cumbersome Original Equipment Manufacturer (OEM) tools were modified to reduce set-up time and manpower requirement. These solutions have improved the company’s process lead-time by 25% and reduced the maintenance man-hours by 17%.
16. We cannot afford to be complacent. We all know how the fable of the tortoise and the hare ended, and the drive to improve productivity is not a hundred-metre sprint but a marathon. It requires sustained investment and innovation along the entire value chain, as well as a fundamental change in the operations and mindset of businesses. I would urge the aerospace industry to make improving productivity its immediate priority, and tap on the strong support that the Government is giving to enterprises, such as the Productivity and Innovation Credit, as well as the National Productivity Fund. WDA will also be working with the industry to develop WSQ-aligned training programmes tailored to deal with the specific productivity challenges of the aerospace industry.

    Conclusion

17. The aerospace industry provides good jobs and enjoys strong long term prospects but it needs to continuously strive for sustainable productivity-led growth to reap the profits and create better jobs for our people.
18. As Asian economies recover and global flights resume their growth, the demand for aircraft fleets will also increase, presenting significant expansion opportunities for aerospace players in this region. In this light, the organisation of the AeroProfessional Series is timely as the hiring of skilled individuals will continue to take centrestage.
19. In closing, I would like to congratulate members of the Aerospace Human Capital Steering Committee on their appointments today. And I wish all AAIS members a fruitful discussion ahead.
20. Thank you.