Transcription
My task in the next 10 minutes is to share with you the recommendations from the ESR report. But before I begin, let me first thank the Singapore Business Federation (SBF) for the opportunity to share the Economic Strategy Review (ESR) report with all of you this morning.
SBF started this Future Economy Conference in 2017, when the Committee on the Future Economy published its final report. It has been some time. I went back to read the report in 2017. Back in 2017, the world was a very different place. But the report had already warned about protectionism and technological disruption as risks on the horizon. Nine years on, these risks are no longer on the horizon – they’re the weather that we are facing now.
We launched the ESR in August last year, on the back of the Singapore Economic Resilience Taskforce that DPM Gan chairs. The ESR’s mandate was to review Singapore’s economic strategies comprehensively and to develop a strategic roadmap for the next five to 10 years. Because the conditions that delivered the last few decades of growth in Singapore have fundamentally shifted, and our economic playbook needed updating.
We set up five ESR Committees: On Global Competitiveness; Technology and Innovation; Entrepreneurship; Human Capital; and Managing the Impact of Restructuring. The committee members were not just Government representatives sitting in a room by themselves. There were business leaders, unions, and workers involved too. This was a whole-of-economy effort. That’s why we have people like Brian, Jenny, and Kerry, who will join me after this for the panel discussion. And I see many of my committee members here as well, Vincent, Kim Pong, Su Shan, Sandeep, amongst others. They are the members of my Committee on Global Competitiveness. But more importantly, they are members of the new generation of Singaporean business leaders, who know firsthand how the world is evolving, and who are the ones making important decisions on the economic frontline.
You will also notice that I have drawn the five committees as overlapping circles, not because they look like Olympic rings, but to illustrate that these committees had deliberately overlapping missions. The most important, but most difficult problems are the ones that sit at the intersections.
Five committees working over nine months. They produced many ideas. So, before we go into the panel discussion, I thought I should walk the audience through the recommendations in the ESR report. I have only 10 minutes, so I won’t go into detail. I will give a quick overview of the eight thrusts that comprise the recommendations of the report. We will issue an executive summary today that will provide more exposition, and over the next two days of this conference, various panels will dig into the ideas in the report more deeply. Let me begin.
The first thrust is to sharpen our existing strengths into areas of global leadership. Singapore is already a trusted base for high-value manufacturing and modern services. For example, we are a key node in the global semiconductor value chain because of companies like Applied Materials and Micron which are located here. My Global Competitiveness committee recommended sharpening our investment promotion approach to attract more of such cutting-edge activities, and entrenching them through deeper supplier ecosystems, research partnerships, and stronger talent pipelines. We also need to make bold bets in new areas such as quantum technologies and space, building on what we already do well in adjacent sectors like semiconductors, advanced manufacturing, and aerospace. The aim is simple. We don’t want to just be in the supply chain. We want to be the part of the supply chain that nobody can afford to take out.
The second thrust is to position Singapore as a trusted hub where AI solutions are developed, tested, and deployed to solve real-world problems at scale. Other countries will have bigger labs and more chips. But our edge in Singapore is different. It is our ability to organise ourselves, for example, to get a bank, a hospital, a regulator, and a researcher all in the same room, agree on what is worth solving, and work together to do so. Our advantage in AI is not the biggest model. Our advantage is to find the best problems in the world to solve. The committees made three recommendations: First, work with industry to co-develop ambitious sector-specific problem statements for AI deployment. Second, we will develop leading firms as Champions of AI. Companies like DBS, SIA, PSA can use AI to transform their operations end-to-end and serve as reference models for their industries. Third, to accelerate economy-wide adoption on AI. We know that most SMEs do not have the resources or capabilities to build their own AI solutions and many also lack access to large, high-quality datasets. This is where we will work closely with Trade Associations and Chambers, like the SBF, because they can play a key role to aggregate demand, pool data, and work with AI developers on shared sector-level solutions.
The third thrust is to strengthen Singapore’s role as a connected and trusted hub. Now, you might expect the transport minister to stand here and tell you we need bigger ports and bigger airports, as I will at some point. But physical infrastructure alone is no longer a good enough differentiator. The movement of goods, people, capital, and data is increasingly shaped by security, resilience, and trust. So, we need to build next-generation sea and air hubs that integrate physical infrastructure with digital and AI-enabled systems. We need to invest in specialised handling and logistics capabilities, and deepen air-sea-land connectivity. And even when the cargo no longer passes through Singapore physically, the decisions about that cargo can still be made here. That means growing activities like supply chain management, global procurement, demand planning, and standard-setting in Singapore – so we stay relevant even as physical trade patterns change and evolve. There are also new flows like data and energy, which we can do more to capture in Singapore, as we have done with goods, capital, and talent.
The fourth thrust is to foster a more dynamic enterprise ecosystem that supports renewal and transformation. The recommendations include expanding access to growth capital, anchoring younger high-potential firms here early, supporting our companies in ambitious overseas ventures, and helping firms restructure through M&A and offshoring. An economy is healthy not because firms never fail, but because new ones keep rising. Our work here is to make sure that capital, talent, and second chances all keep flowing. We aim for Singapore to move from being a landing pad for investment to a launchpad for business.
The fifth thrust is about creating more good jobs. Last week, we had a busy week in Parliament. We passed a motion affirming that Singapore should not have jobless growth, amid the AI transition. We should advance AI strategies that complement workers. This includes investing in areas where AI can open up new roles and career opportunities, and linking Government support for AI adoption to clear workforce outcomes such as job redesign, skills upgrading, and career progression. We can also raise the quality and attractiveness of jobs in sectors that are more resilient to AI disruption – such as healthcare, social services, and early childhood education. This way, we make sure that as our economy grows, our workers’ prospects improve with it.
As technology and industry cycles shorten, workers are likely to experience more frequent career transitions. And therefore, the sixth thrust is to establish a stronger support system for such career transitions. The principle, as DPM mentioned earlier, is to protect the worker, not the job. The workers of the future may experience either voluntary or involuntary career transitions. For voluntary career transitions, we should make it simpler for workers to reskill and secure better jobs. For involuntary career transitions, we should provide support to the workers early, ideally before job losses occur. The ESR recommended building career bridges for workers in at-risk roles, and strengthening transition support for PMEs by studying ways to smoothen income loss. We should closely monitor the impact of the AI transition on workers. If indeed AI leads to more severe or broad-based disruption than we expect, the Government should consider further measures to support workers to ensure that gains from AI are shared fairly across society.
The seventh thrust is about empowering workers to take charge of their careers, with lifelong learning. A diploma used to be a destination. Today, it’s a waystation – an important waystation, but not the end of the line. SkillsFuture has given Singaporeans a headstart where skills have much shorter shelf lives. We should deepen SkillsFuture support for career transitions and lifelong learning – including more funding for post-graduate programmes and scaling up modular and stackable pathways. The ESR also recommended a more nimble ecosystem of career and employment services. The Government has already taken this on board by forming the new Skills and Workforce Development Agency to deliver end-to-end support to our workers.
The eighth and final thrust is to strengthen our economic resilience. This includes energy resilience, climate resilience, and supply chain resilience. We have already been diversifying our risks, building buffers, and expanding our network of trusted partnerships. But the real competitive advantage is when we can combine resilience with efficiency. The goal for us is to be the best-insured economy at the lowest premium.
These are the eight thrusts. They work together as a coherent strategy, and every recommendation comes back to one vision: a Singapore that stays competitive and resilient in a changed world, and one that continues to create good jobs and opportunities for our people.
Over the last 60 years, Singapore has restructured its economy repeatedly – through recessions, financial crises, SARS, and the Global Financial Crisis. Each time, we studied the situation, made the changes, and came out stronger. I started this morning by saying the storms of 2017 are the weather of 2026. Singapore’s answer has never been to wish for better weather. It has always been to build a better ship, for us to sail. The ESR is our latest set of plans for that ship. To build it and to sail it will require a partnership across Government, businesses, unions, and workers. If we work together, Singapore can continue to grow, create good jobs, and remain competitive in a changed world.
This is the end of my sharing. Thank you very much, and I look forward to the discussion with the other committee members.