Transcription
The ESR was set up in August, uh, this year. Our mission is to develop or review our economic strategies for the next, uh, 5 to 10 years. This is timely because the global economic environment has become a lot more challenging. Political rivalries have intensified. The competition for investments has sharpened. The pace of technological change has also, uh, increased significantly, particularly with the advent of AI.
Uh, MTI has, uh, spoken earlier in the year about how we expect our long-term, uh, growth trend to be about 2 to 3% per annum for the next decade. And actually, by the standards of advanced economies, that's already very good, uh, especially if the global economic environment continues to be challenging. Of course, the ESR's, uh, mission is to look for ideas, strategies to try to push up the growth to the higher end of this 2 to 3% range. And we are going to do so by looking at how to make bolder moves, to take, uh, calibrated risks, and also to strengthen our foundational capabilities, to build new and foundational capabilities for the future. And if we are successful, I think we, some years, hopefully, we'll be able to grow faster and higher than trend, maybe 4% in good years, and then overall over the decade, we'll be able to be on the higher end of the range.
So, the ESR committees have been hard at work. You know, we have five committees. Uh, there's one that I chair, which is on global competitiveness, together with Senior Minister of State, Lee Yi Shyan. There are four other committees on artificial intelligence, on entrepreneurial entrepreneurship and startups, on, uh, human capital, and on, uh, supporting the restructuring of companies and the workforce. And, uh, we have been in consultation with, uh, businesses, and not just businesses and industries, but also workers and the union to seek feedback, validation of some of our ideas. We hope to be able to put up a midterm report, roughly around the COS and budget period. We'll have a chance to discuss these, uh, ideas, uh, with, uh, key stakeholders and with the public, hopefully get some funding support, and then we'll consolidate these ideas. And by the middle of next year, we will put up a full report with the, the recommendations. But between now and, of course, uh, middle of next year, it doesn't mean that we're waiting for the report before we implement these ideas. We will, uh, as we go along, uh, when the ideas make sense, we will roll them out and start to execute them.
>> So, I have, reaching from Business Times, I have two questions. Uh, one, you, you mentioned that, you know, you guys have been doing, you know, several consultations. Could you give a flavor of, you know, what have you heard so far and, you know, what is likely to be implemented in the report?
>> Uh, and second, you know, uh, there have been several economic reviews in the past. So, uh, how would this be different from from those?
I personally have been meeting quite a few business leaders, both locally as well as, uh, overseas, and they've shared with, uh, very good ideas on how we can, uh, strengthen Singapore's value proposition as an investment destination. Singapore has, uh, uh, many MNCs, as you know, here. Many of them have been with us for, for 20, 30 years. They are strong partners for us. And what we want to do is to work with, uh, these MNCs to do more in Singapore, more in terms of value activities, but also more interesting, innovative, uh, things that are, uh, on the frontier of their businesses. And we can do that because in Singapore, we are a trusted destination. They know us well. They know how the government works. They know that they have a stable investment, uh, uh, environment here. And, uh, I've been meeting quite a few of these companies, for instance, uh, uh, Applied Materials, GSK. They showed me some of the interesting things that they are doing. And I think if those projects, uh, are realized with support from the government, it will create good jobs and sustain, uh, high wages for the workers that, uh, work with them. So that's one delta, really looking at working with our MNC partners to do more higher value projects and more interesting projects.
A second delta is looking at how we can bring in more high-growth companies to Singapore. These are not necessarily MNCs, but companies that are in either existing industries that are doing well, or in new industries, such as in robotics, AI, precision medicine, advanced manufacturing. And, uh, companies like these are growing fast. They are looking for places where they can grow fast. Um, and some of the things that they're looking at are, for instance, access to, uh, quality workforce, access to growth capital, and a place where it is easy to do business. And Singapore ticks a lot of these boxes. We want to bring in a higher share of these high-growth, uh, companies here. Some of them may become eventually future global champions. And if we are able to root them here, get more of them here to do the things they want to do here, we can create a second delta and hopefully generate more economic growth. So this is an example of the first workstream, which is really to enhance Singapore's value proposition as an investment destination.
The second, uh, broad bucket of ideas is to try to encourage more of our Singapore-based companies to go overseas. We have traditionally encouraged the Singaporean and Singapore-based companies to do more internationally because Singapore is a small market. Up to a point, uh, there's only this much you can grow. There's only this much business to do here. For you to really, uh, continue to grow, you have to go overseas. And many of our Singaporean companies, including the business leaders who are here today, understand this. Um, hitherto, the government has been quite measured in how we support our companies to go overseas. A lot of it is encouraging them to enter new markets. But we are looking at how, uh, best to support them in doing other things, for example, doing new products in overseas markets. And this is an area we are consulting our businesses very closely to understand what are the things they need when they are involved in overseas projects. The more of these companies that are, uh, Singaporean-based but, uh, global, the more Singapore can have an outsized influence in the global economy. You have companies like PSA, 60% or rather PSA International, 60% of their revenues are overseas. They operate 60 ports all over the world. They have outsized influence in the industry. We have companies like Wilmar, similarly, huge global operations in many parts of the world, outsized influence in the industry, but with a rootedness in Singapore. And we want more such companies, uh, here.
Uh, the last sort of bucket, really quickly, is to talk about how Singapore, or to rather do more to make Singapore a hub of flows. Let me explain. Singapore is traditionally a hub for goods, talent, capital, and these are the traditional flows that anchor, uh, the modern economy, and it has benefited Singapore to be at the node for these flows. Increasingly, there are new flows. Data, energy are such examples. But the way these new flows are configured are quite different from the traditional supply chains for goods and services, for example. It's not so easy for Singapore to be at the center of these flows because we are physically constrained. Data centers need energy and, uh, uh, the new forms of renewable energy. We are, we are disadvantaged. But we are studying how to turn some of these constraints into our strengths. We have, uh, done this before with water, and we're looking at how we can do the same with, for example, uh, low-carbon energy. And if we are able to succeed here in Singapore, we will be able to set an example for other countries or cities to follow. So this, I hope, gives you just a flavor of what Committee One is, uh, working on. There are many ideas in the other ESR committees as well. I will leave them at the appropriate juncture to share them with you.
>> Thank you.
>> And the second question, uh, about how this ESR will be different from the other economic reviews.
>> Yeah. Um, well, I think it's timely for the ESR to do this review right now. I think the global, uh, economic environment is, is very challenging. In fact, you, one can make the argument that the conditions for Singapore's success for the last 10, 20 years, maybe even going back 30 years, they have fundamentally changed. There is, uh, less free trade. Now, free trade is no longer the, the assumed condition. Rule of law, less important. The intensification of competition between cities and economies, uh, is real. And so it is necessary for us to look back at all our economic strategies, those that have served us well in the past, um, and look at which ones of these we should continue to do. In fact, maybe even double down on. Also, which ones of these actually don't work anymore, and maybe we have to adjust or, or recalibrate. So this is the process that the ESR is going through. We have to work on this to prepare our economy for the next five to 10 years and to make sure that, uh, our companies, our workers are all well positioned for the future.
>> So Minister, I just wanted to clarify, I mean, the midterm update, what happened during the budget? And secondly, um, employment has surfaced as a concern for some companies and workers. How has this informed the work of the ESR?
>> Yeah, um, that's a good question. So the first question on the midterm update, we, as I said, we will, uh, hope to be able to put out a midterm update, uh, during the budget, uh, period. I think this will enable us to give a good airing to those ideas that have, uh, come up, um, and for us to see whether there is, uh, a robust debate and, uh, good sense of what we can potentially do. Then we will consolidate those ideas after the budget and COS period with the view of putting out the recommendations more formally in the middle of the year. Can you repeat your second question, please?
>> I mean, employment has been a concern, uh, for some businesses and workers. How has that informed the work of the ESR?
>> It, it has absolutely informed the work of ESR. The objective of economic growth is to create good jobs for Singaporeans. That's the bottom line. And what we are doing is to make sure that for the future, we are continuing to be able to do that by looking at our strategies that have served us well, looking at what we can do more of, and looking at what we will need to adjust. There will be, uh, jobs that we will create for young Singaporeans, future jobs in future industries that we want to be able to do. There will also be new jobs that will create for existing industries because technology is changing, things are moving. There will be job and skills adjustments that need to be made, and we're very conscious of that. That's why one of the five committees of the ESR is specifically on how to help businesses and workers make a transition, and we will be supporting them, uh, to do so.
One of the key things we are looking at, uh, is to look at the nexus between, uh, the job itself and the skills that we are training our workers, uh, in. Whether there's a strong enough connection, and whether we need to do more. And may well be, we need to reorganize ourselves a little bit to enhance that, that connection. Um, but this is something we're looking at. And I will, the, the two committees that are specifically looking at this is, uh, Peter Ong's committee on restructuring, as I mentioned, as well as, uh, David's committee on, uh, uh, human capital. And, uh, I will leave them to, to talk a bit more. I understand they did a consultation, or rather an engagement session, a couple of days ago, and they shared some of their thoughts, uh, then.
>> Hi Minister. Hi.
>> Given the geo, um, political tensions and other headwinds, uh, have you seen any impact on, uh, Singapore's foreign investment commitment this year?
>> Um, I think when companies invest, they don't invest for the short term.
>> They invest, uh, for the long term. Their time horizons are long, particularly those companies that are here in Singapore. They value Singapore for its stability, its business-friendly environment, and they are prepared to do new things with us for the long haul. That's the message I've been getting when I meet, uh, the CEOs of, uh, MNCs when they come here, and when I go overseas to meet some of these companies, they send me the same message. Of course, the, the competition for investment is also stiffer. These companies have alternatives, but I think some of the basic fundamentals that have stood us well, um, in terms of, uh, uh, attracting these investments here, continue to, to be the case. In fact, you can argue that it is even more important in this, uh, age where there is so much uncertainty, and Singapore stands at an oasis, uh, uh, of calm.
I think AI will be a fundamental driving force for the economy for the next, uh, 5 to 10 years. I think that is very clear. Now, in Singapore, we have an opportunity to be one of the, uh, we have the opportunity to be at the frontier of global AI innovation. In fact, we have been making good progress. We have a national AI strategy. We have refreshed the strategy very recently, and we're now on version two. And you see some of the, the benefits of having a, a national AI plan that we started some time back, because there are companies that are already here setting up centers of excellence, uh, in AI, and we are happy for that to have happened. But I think we can do more, uh, in order to, to be one of the maybe three to four, uh, global hubs for artificial intelligence. In particular, I think we need to coordinate our efforts a little bit more. We, there are many parts of the value chain: research and development, talent attraction, having good industry problem statements to work on, and of course, having funding. And in Singapore, we have to maybe open up more sandboxes in key industries for us that are important for us, for instance, in healthcare, in logistics, where there's air and sea port, uh, transportation, in finance, where AI have useful, interesting problem statements to solve. And people will want to come here to work on these problem statements. Uh, as I mentioned, we also need to attract talent, not just top-tier talent, but also the engineering talent that, uh, drive a lot of these industry adaptations. Um, and I think finally, there is an, uh, area where we can play to our strengths. And one area is in, uh, the trust-related industries for AI, whether it's good governance, whether it is in, uh, assurance, quality assurance, whether it is in, uh, anti-fraud, uh, uh, applications. These are all areas where Singapore's reputation and our capabilities on trust gives us a premium and can encourage more of the such, uh, uh, industries to, to come here. The competition to be a global AI hub is very, very stiff. But we have to play to our strengths, make sure that we are able to do the things that we are good at. And in so doing, if we are able to be one of the three to four, uh, global AI hubs in the world, it will strengthen our economy and create good jobs for the future.
My question is pertaining to the progress and the timeline, basically. So this, uh, committees has been formed for about three months now. Can I get an idea, a sense, how many percent of the corporates, of corporations, [clears throat] that you guys have engaged so far, and also internationally and locally? And what are the prioritizing, uh, considerations for industries? Are they, I mean, the, uh, sectors that you prioritize during this period, because we are looking at some form of report in COS, right?
>> Yeah, I don't have the detailed numbers, but I don't think we are looking at just trying to hit numbers. More important is the type of ideas that we get and the range of, uh, people that we are consulting. And I think all the five, uh, ESR committees have been, uh, engaging their stakeholders in their various fields and, uh, getting a good feel of some of the things that, uh, businesses feel that we need to do. We need to consult the business leaders, particularly the generation of new business leaders, well, like Andrew, who are at the forefront of what, uh, uh, we are doing on the economy,
>> facing the challenges of the global economy every day, and having a good, strong feel of how, uh, they, the things that they need to do in order to do well and to prosper. And so that's our objective, to hear from the business leaders and to get their suggestions on what to do, and then we will consolidate them and see what sort of government support we can give to them and, uh, uh, help to build a, uh, stronger, uh, uh, package of support for them in the for the next 5 to 10 years.
Sorry, Minister, just to follow up on your answer just now on the global AI hub. You were saying that to be the number one is very stiff, of course. But then you say, if we can be top three or four, is that what we?
>> No, I said we will be one of the, the four to five global hubs for, three to four global. I don't actually know what the number will be, but we want to be one of them. And in order to do that, there are things that we need to do to be more coordinated, to be more comprehensive in our support. And I think we have a good idea on what to do, and, uh, we are working on, uh, developing that. And it will support both our businesses who will need to transform, and also our workers who will need to adapt to using AI.
>> Right.
>> Thank you.
>> There were some recently announced strong export growth in October, but like what you're sharing, there's a lot of major shifts that are happening at the same time. So do you feel like you're on the right track when it comes to the economic blueprint for Singapore moving forward?
>> Um, I think there's a lot of uncertainty at the moment. Our, uh, uh, view of the economic, uh, situation is that in the short term, we are cautious, cautiously optimistic, more cautious than optimistic, perhaps. Um, but in the long term, I think, uh, if we are able to get our strategy right, if we are able to make the adaptations we need, we can set ourselves on a good footing and be better prepared for the future and to generate, uh, better growth that is above trend, that will be, uh, overperforming that of an advanced economy. We will try our best.