Speech at Singapore Productivity Awards Gala Dinner 2017

Mr Lim Swee Say, Minister for Manpower, Shangri-La Hotel Tower Ballroom

Mr S S Teo, Chairman, Singapore Business Federation,

Distinguished guests,

Ladies and gentlemen,

Introduction

1. I congratulate the winners of the Singapore Productivity Awards tonight.
2. Your achievements will inspire many more businesses to transform for higher productivity and better growth.
3. Productivity growth is critical to our future progress.
4. Without productivity gains, we will eventually lose our competitiveness.
5. Wages will stagnate too.

From 4+0=4 to 1+2=3

6. This is why we are transforming our economy to be more innovative, and our workforce to be better skilled and more productive.
7. Progress has been steady and good.
8. We are becoming more manpower-lean. Our manpower growth has slowed from 4% a year in 2012 – 2014, to 2% in 2015, and 1% last year.
9. We are also becoming more productive. Our productivity growth, having stayed flat in 2012 – 2015, went up to 1% last year.
10. This year, we continue to make progress.
11. We are likely to see no net increase or even a decline in total employment. Most, if not all of the projected GDP growth of more than 3%, will come from productivity gains.
12. So, instead of manpower-driven growth of the past, we are transiting to productivity-driven growth of the future.
13. Some may then wonder, does no growth in total employment this year mean we are heading for “jobless” growth?
14. And if we keep improving our productivity, will we end up with not having enough jobs for our people one day?
15. I would like to make three points tonight.
16. First, we are not going through jobless growth.
17. Yes, in the first three quarters of this year, total employment (excluding FDW) did drop by 20,000.
18. However, local employment did not drop but continue to grow, by around 9,000.
19. This is because the loss of 43,000 jobs in the Marine and Construction sectors affected mainly the foreign workers, not our local workers.
20. For the whole of this year, net gain in total employment is likely to be zero or negative, much less than the 8,600 recorded last year.
21. However, local employment this year is likely to grow faster, higher than the 11,200 recorded last year.
22. Hence, there is a difference between total and local employment growth.
23. 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.
24. Second, we need to sustain productivity growth if we want to keep improving the quality of local employment.
25. One good example is manufacturing.
26. Productivity gains have made the sector more manpower-lean.
27. Along the way, more foreign workers on the production floor are being released progressively, while locals are being re-trained to operate in the smart factories of the future.
28. Local employment share and local wages in manufacturing have been improving, in sync with productivity improvement, not the other way round.
29. Other examples are finance, professional services and wholesale trade.
30. Productivity levels in these sectors are good and improving.
31. With technology and innovation, they will offer more jobs and better careers that are attractive to more locals.
32. Yet there are sectors that continue to see a decline in local share of employment.
33. These include F&B services, Admin & Support, Accommodation, Retail, and Community, Social & Personal Services.
34. These sectors will need to do more to embrace change, redesign jobs, upgrade skills, improve productivity and wages, just like what our award winners tonight have achieved.
35. We should not fear that productivity growth will take away jobs and slow down total employment growth.
36. Instead, we should embrace productivity growth because it will help enhance the quality and attractiveness of jobs, thereby helping our local employment to grow faster and better.
37. Last but not least, we must make productivity growth pervasive, not just across all sectors of the economy, but also across all levels of our workforce and all sizes of enterprise.
38. We are transforming 23 sectors that account for 80% of our economy.
39. The response from SMEs is encouraging. Many more SMEs are now transforming their business to be more innovative, productive and manpower-lean.
40. For example, the number of companies, mostly SMEs, joining the Lean Enterprise Development Scheme has more than doubled this year, bringing the total to more than 5,000 companies in just two years.
41. We are also seeing many more enterprises of all sizes improving productivity and redesigning jobs to make our workplaces more age- and family-friendly for mature workers and those with family care responsibility.
42. Lower wage workers are not neglected too. Initiatives such as Progressive Wage Model (PWM) and Inclusive Growth Programme (IGP) have made their jobs Easier, Safer and Smarter, and enabled them to be more productive and earn better wages.
43. The enhancement under the Progressive Wage Model for the security industry announced yesterday is a good example.
44. There is still much to be done.
45. At the end of the day, we should never forget that productivity growth is more than making our economy more innovative and competitive.
46. It is also about making our workplace more caring and inclusive for everyone: young and old (age), high and low (wage), local and foreign.
47. In conclusion, our economy has become more manpower-lean and our workforce more productive in 2017. This is good.
48. But with keener competition and faster pace of innovation, the transition is never complete, and the job is never done.
49. To sustain economic growth and improve local employment, we will have to keep breaking the productivity bottleneck, again and again.
50. Today’s event organised by SBF will help raise greater awareness of the importance of sustaining productivity growth.
51. Let us transform, adapt and grow together, and break the productivity bottleneck year after year, as one innovative economy and one inclusive workforce.
52. I wish you a great evening, and a great future ahead. Thank you.