싱가포르 경제 국제화 및 연결성

5.45 pm

Growing Our Economy

Mr Liang Eng Hwa (Holland-Bukit Timah) : Mr Chairman, Sir, I beg to move, "That the total sum to be allocated for Head V of the Estimates be reduced by $100."

As a small and open economy, Singapore can only be a price-taker in the global marketplace realistically. Staying competitive is a given but that just puts you in the starting line. We need to develop both value-adding capabilities, which I will touch on later, and, equally important, our market connectivity capabilities, so that we can sell our products and services to the consumers of the world. Having both sets of capabilities and the intensity of them will determine how much of a livelihood we can make for ourselves.

In Singapore's context, staying open and connected to the world is key and our only pathway to continued economic growth and progress. Today, our international linkages and market connectivity enable us to transcend our limited domestic market and create for ourselves a bigger hinterland to operate in. We need to continually expand and upgrade our network of trade partnerships and investment agreements so that our companies can not only have a bigger economic space to do business in but are also able to ride on the growth and opportunities in the emerging markets.

Over the decades, we have done very well to strengthen our air, sea and land connectivity. In the new landscape, we need develop other new sets of connectivities, such as regulations, data, talent, finance and technology.

These efforts are primarily Government-driven but, importantly, we also need businesses to step up to seize these opportunities from the enhanced connectivity. It requires the companies to build up the required capabilities to internationalise both at the enterprise and the workforce levels. Capabilities, such as deep understanding of the target markets, ability to mobilise and deploy resources and talents across markets and jurisdictions, ability to obtain local funding and manage currency risks, among others.

Our economic agencies already provide both financial and non-financial support to help companies internationalise, such as in in-market landing pads, overseas centres and so on. Here, I would like to ask the Minister if the support has been adequate and has there been good traction.

Beyond the more familiar markets like China, India and the developed economies, do our economic agencies need to step up expertise and presence in newer and more frontier markets as we know that these markets tend to have less developed market data and more challenging regulatory and operating environment? How can the Trade Associations and Chambers (TACs) play an enabling role to help businesses seeking to internationalise, especially in less familiar markets?

On diversification of international markets, the COVID-19 outbreak reminded us on the urgency to seek more and newer markets, especially in emerging economies and to minimise concentration risk on any single market.

China's GDP has increased fourfold since 2003 and its share of the global GDP has more than doubled from 9% to 19%. Singapore's trade with China has also increased almost four times since 2003. Even in the area of tourism, the Chinese tourists account for about 20% of Singapore's total international visitor arrivals. So, I would like to ask the Minister as to how we can manage our economic exposure to China, balancing the opportunities versus the risks.

Even without the COVID-19 outbreak, global supply chains are already showing signs of disruptions and are likely to be re-organised. How can we help our companies diversify their markets and adjust to the shift in supply chains to increase business resilience?

Next, and still related to diversifying our economy, I would like to seek an update from the Minister on the progress of building new economic clusters. In particular, how have we leveraged on the technological advancements to open up possibilities in new sectors? Beyond agri-tech and sustainability solutions, are there more new growth sectors that we are developing?

Continued rapid advancements in technology are likely to add to further disruptions and even lead to the demise of some sectors. We need to open up new industries and growth sectors to keep generating the positive deltas to our economy. Fostering new economic growth sectors can also help create new and more exciting jobs and it can help boost the overall productivity and innovations.

We know that investing into new growth sectors carry significant investment risks. It requires sectoral expertise and talents, it requires products that meet the addressable markets, the necessary eco-system players and, importantly, the entrepreneurial acumen and aspirations.

How can the Government facilitate the development of new growth sectors and its necessary eco-systems? What are the resources and support to be provided? In Budget 2020, the Finance Minister also mentioned about improving support for deep-tech startups. Can the Minister also share on how the Government plans to nurture and help promising startups?

Next, on enterprise development. There are more than 200,000 enterprises in Singapore and they come in every size, different stages of growth, uneven productivity capabilities and resource adsorptions and varying value-add to the economy. Given this diverse enterprise landscape, a one-size-fits-all approach may not meet the specific needs and achieve the desired outcomes. How could our economic agencies work with the relevant stakeholders to provide differentiated support for different types of companies?

A pro-enterprise environment is also a necessary condition for a vibrant and entrepreneurial eco-system. The Pro-Enterprise Panel (PEP) was formed in 2000 as a platform for companies to provide feedback on regulations. Is there scope to adopt a light-touch approach in regulations so as to encourage more enterprises to innovate and venture?

Sir, In his Budget speech, the Finance Minister also spoke about the Next Bound of SkillsFuture, which includes enhancing the role of enterprises in developing their employees.

Having employers take ownership in developing their staff is the most ideal situation. The companies know best the skills needed for their businesses to grow and transform. The employers are in the best position to manage the resources, time and space to upgrade skills. They are also in the vantage position to plan out and execute job re-design, which can align the necessary training and re-skilling to the business need.

In that regard, can I ask how would the Government promote and support more of such involvement by companies to build their workforce capabilities?

I applaud the Government for introducing the SkillsFuture Mid-Career Support Package. It is the most tangible move to-date by the Government to help mid-career Singaporeans. It is another manifestation of the Government's commitment that economic growth must, ultimately, translate to good jobs and good outcomes for all Singaporeans. I hope that the hiring incentive to employers who hire local jobseekers aged 40 and above, through re-skilling programmes, would appeal to employers and also change their mindsets.

Employers should leverage on this re-skilling programme to help enhance their workforce and yet also enjoy the wage support. So, I call on employers to discard any age biases that they may have in their HR policy and re-pivot to the new environment of higher retirement age.

Finally, let me speak about our response to the COVID-19 situation.

The first wave impact to our affected businesses, such as tourism, aviation and retail, has been very sharp and severe. The Stabilisation and Support Package has rightly focused on tackling two critical situations: firstly, the weaker cash flow position of businesses and, secondly, to focus on saving jobs.

The announced measures of Jobs Support Scheme, rental waivers, rebates, temporary bridging loans, among others, are relevant and practical relief measures to help businesses, especially in managing the tighter cash flow situations. However, I am concerned that if this COVID-19 situation is prolonged, we may lose capabilities and capacities in the tourism sectors as operators may downsize or shut their operations. I hope that the Government would monitor this closely and be ready to extend and step up the assistance further.

Given the severity of the outbreak in China, its economy is likely to take a major hit. If the situation persists, its production capacity would be curtailed and we could see serious disruption to the supply chain and this has wider and deeper implication and impact to the world's trade flows.

On the demand side, slower growth in China is also expected to dampen consumption and investments. Singapore, like many economies, is unlikely to be spared from the further knock-on effects. How can we draw lessons from the impact of COVID-19 to build economic and national resilience?

[(proc text) Question proposed. (proc text)]

The Chairman : Mr Teo Ser Luck, you have three cuts. You can take them together.

Economy

Mr Teo Ser Luck (Pasir Ris-Punggol) : Our economic growth is getting more and more challenging. I think each year, as we forecast our economic growth, you will realise that we keep revising our forecast. From last year to this year, we are revising downwards on the forecast. It is challenging, no doubt, and, with COVID-19, it is getting more and more challenging to actually get a part of the pie because other cities and economies are also getting more competitive.

We are focusing on quite a few verticals and I know that we rely less on manufacturing now, which, in the past, was about 25% contribution to GDP. But right now, we are looking at it at 20% GDP. Although there is a lot of focus on precision engineering and some of the rest of the other sectors related to manufacturing, I think, for the long haul, it does not give as much stimulating growth to the economy as we need.

So, that is where we are investing in technology startups or we are investing in financial services and all. However, for some of this growth, we are competing very intensively with other economies as well and that will pose a challenge to our economic growth as a whole. I think on a year-to-year basis, growing at 1.5% to 2.5%, we are sort of plateauing, although we are in better shape to do better than other economies.

I would like to ask the Ministry whether there are immediate short-term to medium term strategies or any change to the current strategies that we have. With the 23 Industry Transformation Maps (ITMs) that we have focused on, I do not think we can focus on all 23. But what are the key focuses that we can have in order to boost the economy forward, maybe the next three to five years of economic growth that can be greater than 3%? Because we have not seen anything before with 5% to 8% anymore. What are the other measures that we can put in?

FTA Impact

With COVID-19, I was wondering whether the Free Trade Agreements (FTAs) can play a part? FTAs, in good times, actually help the SMEs, who understood FTAs and can launch their products overseas and get the full benefits out of them – tax incentives and other measures in regulations, in actually getting exceptions. But in not so good times, let us say, for example, right now, how do FTAs play a part? We have more than 25 FTAs signed so far – bilateral and multilateral. Where do they play a part? How can we use them more effectively? What can the SMEs do?

Market Readiness Assistance

I think one of the most practical methods for businesses in Singapore to actually overcome some of these challenges, for example, some of the crises that we faced today and some of the growth challenges, will actually be using some of the schemes that we have. One of the schemes that is also a beneficiary out of it is the Market Readiness Assistance (MRA). I am glad to know that the MRA will be enhanced.

The important thing about launching businesses overseas is, firstly, the regulations; secondly, the knowledge on the legal aspect, the framework; thirdly, it is finding a local partnership. Sometimes, it is not about funds, because MRA provides the funds. But it is the knowledge that is the most important. Where can we get this knowledge? Can MRA offer more than just funds, dollars and cents, but actually coming in with certain knowledge? Because we have Enterprise Singapore (ESG) officers all over internationally and they are very good officers. They can provide their facilitation of good help and networking. I think this is most valuable to the SMEs and businesses who want to venture overseas.

So, can I know from the Ministry what are the enhancements of the MRA, and are we able to move from funds to knowledge that can be imparted to facilitate the growth of SMEs overseas?

6.00 pm

The Chairman : Mr Douglas Foo, you have two cuts, take both together, please.

Opportunities in ASEAN

Mr Douglas Foo (Nominated Member) : Mr Chairman, ASEAN is widely seen to be on track to be the 4th largest economy in the world by 2030. This is driven by the continued economic growth and development efforts of our neighbours. In a study by the McKinsey Global Institute, especially for the manufacturing sector, disruptive technologies are projected to have huge economic impact, potentially creating US$25 billion to $45 billion of annual output value in ASEAN by 2030.

ASEAN is an incredibly dynamic economic block with 10 economies at different stages of development. As the world embarks on a new decade with uncertainty as the opening number, this is a turning point for ASEAN to realise our ambition to be the next "factory of the world".

There is definitely opportunity to attract foreign interest in ASEAN in the current uncertain global trade climate. Additionally, our member states need to encourage our companies to reinvest in the region to further spur on growth.

In our recent dialogues with members in the Manufacturing community, in view of the current supply chain challenges arising from the COVID-19 outbreak, more businesses are seeking to explore longer term solutions for their businesses in ASEAN countries. This provides the impetus for Singapore businesses to take a closer look at the opportunities in ASEAN.

As we continue ground efforts like leading mission trips and business meetings, are there any additional outreach or publicity efforts that will be undertaken by the Ministry to continue to highlight to businesses the importance and promise of our ASEAN neighbours? Because at the end of the day, by 2030, when we look back, we want our enterprises to have actually rode the journey of ASEAN having rose to being the 4th largest economy in the world.

Trade and Internationalisation

Mr Chairman, answering the call by the Government, Trade Association and Chambers (TACs) have stepped up to play a much larger role in outreach and capability building in the business community. Within TACs, there is also a higher level of collaboration to collectively address key business issues.

In July 2019, the Singapore Business Federation (SBF) organised the inaugural Strategic Planning Session for TACs which was attended by over 70 leaders from more than 40 TACs. The TAC leaders had the opportunity to engage in a dialogue with Mr Heng Swee Keat, Deputy Prime Minister and Minister of Finance. During this session, the TACs deep-dived into pertinent issues such as internationalisation, innovation and digitalisation, as well as how TACs need to transform to stay relevant for the future.

On the manufacturing front, the Singapore Manufacturing Federation (SMF), the Singapore Industrial Automation Association (SIAA), and SGTECH have come together to form a Manufacturing Alliance in October 2019 to specialise in business model and process re-engineering, software and digitalisation as well as robotics and automation matters.

The Manufacturing Alliance works with an ecosystem of partners, such as government agencies, Institutes of Higher Learning (IHLs), Centres of Innovation (COIs), and so on, to scope problem statements and curate standardised, modular implementation packages that are easy for SMEs to adopt to make progress on their journey towards Industry 4.0.

As noted by Mr Ho Meng Kit, the CEO of SBF, with more complex challenges faced by our members, TACs need to change, adapt and innovate to better serve the community. As we continue to take on bigger roles, TACs are also beginning to face a number of operational challenges.

In the circumstances, how does the Ministry intend to encourage TACs to pool knowledge and resources together both locally and in overseas markets to help businesses seeking to internationalise? Does the Ministry have any plans to assist TACs to upgrade their capabilities and human talent and make this a possible career choice for the workforce?

Enterprise Schemes

Mr Charles Chong (Punggol East) : Mr Chairman, there are many grants and schemes which are available to help companies. Now, these have been made available by the Government through various agencies to encourage a vibrant business community in Singapore. However, many companies, particularly Small and Medium Enterprises or SMEs, are often not aware of the grants available to them. Or if they know of these grants, the amount of red tape and the number of forms they need to fill in could also prove to be an impediment to applying for these schemes. Or there may be multiple overlapping and similar schemes, and it is hard for a business owner to decide which one to apply for. I am sure not many SMEs know of the existence of SME Centres, which have been specifically set up to help them.

While SME Centres will be able to help SMEs navigate the various grants and schemes which are available, they may not be visible enough for the SMEs, such that SMEs actually reach out to them to tap on their expertise.

My question to the Minister then is what we can do to make SME Centres more visible, such that we make it clear to SMEs that we have people ready and able to help them in their business journeys? More broadly, is the Minister satisfied that MTI is doing enough to ensure that SMEs are made aware of the grants, schemes and programmes available to them, and could more be done to ensure that SMEs do not lose out on these?

Free Trade Agreements

Mr Leon Perera (Non-Constituency Member) : Mr Chairman, Sir, Singapore has 23 implemented Free Trade Agreements or FTAs and may conclude other FTAs in future. Every FTA negotiation involves making a determination on how much improved market access to give foreign companies in exchange for market access for Singapore companies in that foreign country. Implemented well, FTAs can introduce a wider range of goods and services in Singapore at lower prices for the end consumer while also giving our local firms greater market access and a more level playing field abroad.

I would like to ask before an FTA is concluded, how does the Government obtain feedback from relevant local firms about what problems they face with market access within that country, as well as what enhanced competition from that country's firms might mean for themselves, their industry peers and the domestic economy?

Does the Government also review implemented FTAs to assess the net economic impact of the concessions given in respect of market access to foreign firms inter-corporate transferee rights and other concessions as well as whether market access for a Singapore firms has in fact materialised as envisaged under the FTA?

Lastly, is there a mechanism for local firms to easily give feedback on FTA related matters and can some feedback channel be indicated on the FDA section of MTI's website? What processes are used to assess the net economic impact of FTAs after they are enacted? Is feedback gathered from local firms as to the analysis of prices of goods and services before and after? Is that kind of analysis done, for example?

The Chairman : Mr Saktiandi, you have two cuts. Can you take both together?

Enhance Internationalisation and Trade

Mr Saktiandi Supaat (Bishan-Toa Payoh) : Thank you, Chairman. The COVID-19 situation is an unpleasant but timely reminder of the importance of diversification. It is dangerous to develop a reliance on one market. China has been an excellent trading partner with a vast market, offering generous business opportunities for Singaporeans across a wide variety of sectors. But with China taking a significant hit, many local businesses are also reeling from the impact. So, it is crucial set their sights on broader horizons and work towards them, or risk sinking.

Fortunately, there is already the Market Readiness Assistance grant that was first introduced in 2013 to help businesses enter new markets, and also the newly announced Enterprise Grow Package. I am glad to note that those will be now enhanced with greater funding support and coverage.

However, for companies entering a new market, and especially for those who are new to internationalisation efforts, they would feel quite lost and may not even know what they can do with the funding. I would like to ask how can support be enhanced, so that they can have a good and strong head start?

Trade Associations and Chambers (TACs) have been playing increasingly critical roles in driving transformation and growth. Being close to the ground, they have a firm grasp of their members’ needs and a greater understanding of the industry. They have in recent years helped their members to adopt new innovative solutions and technologies to transform their businesses. They have also worked closely with the Government to help members. It is evident that they will, and must continue, to take on integral positions in this next round of internationalisation.

What other roles can TACs play in pooling knowledge and resources, both locally and in-market, to help businesses seeking to internationalise?

Help Singaporean Workers Remain Relevant

Chairman, in the midst of this uncertain economy, our mature and mid-career workers, many in their 40s and 50s, are most vulnerable. With the recent economic challenges and rapid technological advancement, some of them are struggling to make their career transitions. I wish to acknowledge their efforts to make use of SkillsFuture and other excellent government initiatives to reskill themselves.

Nevertheless, the climb is an uphill one. For every successful story, another shares his failed attempts to secure a good job despite months of networking, attending courses, seeking career guidance and so on.

I hope the Minister will share with us further efforts to grow the economy and how this will translate to good jobs and outcomes for Singaporeans.

In recent years, aviation, F&B, retail and tourism were booming. They were among the major sectors offering PCP and other mid-career transition measures. Today, government support is needed to help these industries tide over difficult times. I have confidence that this is only temporary and they will bounce back in good time.

But for those who have made the transition or are in the midst of getting the relevant qualifications and training to enter these industries, I wonder if their employment prospects will be affected. Yet such global crises are impossible to predict. What else will be done to help workers remain employable and industry-relevant in the rapidly changing environment?

I am glad that the Deputy Prime Minister reinforced his resolution in the Budget to move away from reliance on foreign workforce. I would like to take this opportunity to revisit my proposal on the Capability Transfer Programme (CTP) which I brought up last year during my Adjournment Motion to TAFEP and MOM.

Second, there must also be greater effort and localisation efforts to support Singapore's competitiveness and workers' sustainability. May I suggest that the companies be encouraged to set localisation targets for their workforce? Localisation targets meaning proportion of workforce that is local or setting a target for overall local proportion. This can be targeted for a range of skills and may need to be company-specific or dependent. It could be, for example, incorporate elements of training for eventual local employment and with a specific localisation target, for example, in three to five years.

The existing CTP supports firms to bring in foreign specialists to transfer capabilities to the local workforce, and to send locals abroad for training. The Ministry should consider expanding CTP and providing more resources to support the transfer of capabilities from foreign employees, who are already employed in Singapore, to local workers, with the aim of localising jobs. The foreign specialists that they bring in should mentor Singaporeans to take over or share the role.

Funding support for CTP should be expanded to include salary and training support for local specialists, as well as Singaporean trainees on overseas attachments to acquire new capabilities. Can we also consider CTP to support transfer of capabilities from foreign employees already employed in Singapore to local workers, with the eventual aim of localising jobs, working in tandem with the localisation targets I had mentioned earlier?

Upskilling, Re-skilling, Job Redesign

Mr Kwek Hian Chuan Henry (Nee Soon) : Chairman, in the face of significant economic and technology shifts, upskilling and re-skilling is paramount to good employment outcomes for Singaporeans. One can argue that success in both of these areas are some of the hardest public policy that few governments have succeeded in. There are several reasons and it is a complex issue.

Successful upskilling is usually done by successful companies. Because successful companies are the ones who have a clear vision for the future, and therefore the skills needed to reach that future.

They are also usually operating within a certain national culture, such as those found in Germany and Japan, where companies have a firm sense of responsibility to the long-term employment of the staff. This culture is usually supported by manpower policy at the national level.

Upskilling also requires complementary educational institutes and capability for both full-time and part-time upskilling.

If upskilling is difficult, re-skilling could be even more challenging. In fact, one would be stretched to think about more than a handful of countries that had systematically re-skilled people who are structurally unemployed.

Re-skilling workers to do different jobs is somewhat easier for larger companies, because while they are learning these new skills, they are usually working within the same company, within the culture. For example, as DBS banks digitise, many of its front-line workers got a place to be re-trained within other parts of the bank.

However, it is not always so easy to re-skill these people across the broader economy, because not many companies have the scale like DBS. Because in the interconnected world, international companies have the option of re-locating jobs outside Singapore, rather than re-skilling our workers. Because in this age of technology disruption, not all industries have a strong awareness of what is coming ahead and, therefore, workers, who are currently within or are trying to enter that industry, may not know what skills to re-skill on.

Despite these major challenges, it is very heartening that our Government is taking this issue by the horns for many years now, not just within MTI but whole-of-Government, and also to do it in a tripartite manner. Therefore, can MTI share how the Government can help workers remain employable and industry-relevant in this rapidly changing environment, especially mature and mid-career workers, many in their 40s and 50s? For example, how can we upskill more workers in industry-relevant competencies, such as in the area of Design.

The mindset of our workers is also pivotal. They must understand that in this day and age, careers are non-linear, and they must up-skill and re-skill themselves multiple times through their career.

6.15 pm

Nevertheless, companies play the crucial role. Can MTI share how our Government encourage more firms to embrace a mindset shift, to see workforce transformation as a critical complement to enterprise transformation. Accordingly, how can the Government support and incentivise more firms, especially SMEs, to invest in training and redesigning jobs for worker? And how is the Government publicising such information in a systematic manner?

Skills and Jobs

Mr Desmond Choo (Tampines) : COVID-19 outbreak has caused economic weaknesses and companies might be putting off the transformation work. Which are the industries that the Ministry expect to experience a longer recovery time? How is the Ministry helping these industries to continue the transformation?

According to some SME bosses, during a downturn it is also the best time to transform. COVID-19 will eventually come to pass. But the realities of a rapidly changing economy are unchanging. Transformation is critical for a longer term survival. How is the Ministry helping these companies to accelerate workforce transformation?

What are the benchmarks of transformation? Transformation would inevitably cause some of our workers to be left behind. This is especially acute amongst those in the 40s and 50s. How is the Ministry helping to keep them employable and industry-relevant?

Many companies are reluctant to train because the workers might be poached. This mindset is perhaps the great obstacle to manpower transformation. I would like to suggest the training innovation from Amazon. Amazon's career choice programme helps workers to gain skills in areas outside of Amazon's needs by providing resources and work flexibility. Amazon pays 95% of education fees and work flexibility for workers to pick up skills in industries that are in demand and well-paid, regardless of whether those skills are relevant to Amazon or not. Amazon possibly gains because it is seen as a progressive company. It can possibly only retain the promising ones. The industry and broader economy gain from the more skilled workers and workers gain by better skills, better jobs and wages.

We have many large companies in Singapore that have accumulated vast resources over time. If enough of them follows Amazon's example, it need not be a zero sum game of one company producing better skilled workers for others to poach. We can, in fact, grow the pie so that we can grow and benefit our workers collectively.

Grooming Local Talent

Mr Leon Perera : Sir, I note the Government's announcement that 60% to 70% of the jobs created domestically in Singapore from Foreign Direct Investment (FDI) are PMET jobs. Going forward, it is important to support and develop Singaporean leaders in the private sector. To the extent that there are impediments to this, these should be understood and addressed.

A number of programmes have been launched to nurture local PMET and leadership talent, such as the Youth Future Leaders' Programme by EDB and NTUC, the SkillsFuture Leadership Development Initiative as well as the Enterprise Singapore-ASEAN Leadership programme.

I would like to ask for an update on the programmes used to support companies in Singapore, including MNCs to develop a pipeline of local talent in PMET and leadership roles. What has been the success associated with such programmes to-date?

Start-up

Mr Teo Ser Luck : Mr Chairman, Sir, every year we put a lot of emphasis on encouraging start-ups, either catalysing more start-ups in different areas in terms of tech or tech transformation but also in creating the hardware, for example, the Launchpad and several other places where it is clean tech start-up area. That is very encouraging and it is good to know that this year we are putting additional $300 million into deep-tech and with some focus on a couple of key areas, including agri-tech.

The question I have is that I do see many other related Ministries or relevant Ministries also putting in some of the investments into start-ups and also into technology. The question I have is whether there is synergy between them. And when we put in additional funds into it, what are the key performance indicators or indicators of success for such funds? I do not think we can compare a public fund for investments of this like the private funds where their ROIs is in terms of the immediate returns or short-term returns. But what exactly would be the indicator of success for our funds?

Secondly, it is that for the deep-tech start-ups, these have very long gestation period because it is long gestation period, it is very hard to forecast how far it goes. The question is the success is dependent on the commercialisation aspect of these start-ups because you do not want to invest in start-ups where it is just another science project. If it is another science project, then you come out of the lab but there is no commercial value, there is no demand.

We have to put in some of these funds, for example, the $300 million additional funds put it into agri-tech, would the agri-tech in future provide a more comparative and affordable pricing for some of what it produces or these technology startups would be able to scale overseas, globally, have a commercial aspect to that. I would like the Ministry to be able to elaborate further on what indicators are there for such an assessment.

Industry Development

Ms Foo Mee Har (West Coast) : Mr Chairman, Singapore’s investment in economic transformation seems to be moving in the right direction. Overall productivity rose to 2.6% per year over the last three years, up from 2.2% in the preceding three-year period.

The Industry Transformation Maps (ITMs) aimed at fostering innovation, boosting productivity and deepening skills of workers in the respective industries is central to our economic restructuring effort. Yet when I speak to business leaders, they continue to lament that potential synergies and capability development, which ITMs could provide, remain under-leveraged. Performance in industry transformation has been uneven across sectors.

[Deputy Speaker (Mr Charles Chong) in the Chair]

So, I would like to ask the Minister what lessons have been gleaned from the implementation of ITMs thus far? How can companies be better incentivised to band together and form alliances to develop industry-wide capabilities, build scale, go international and test sector-wide solutions? What progress has been made in the Government’s efforts to anchor key players in shared facilities and infrastructure to better support transformation and adoption of technology? And lastly, how can Government support the development of emerging sectors with good growth potential?

Sir, from the substantial Government investments made in the economic transformation journey that started four years ago, there must have be – there must be useful learnings from sectors that have gained good traction.

For example, what can we learn from manufacturers in the semiconductor and pharmaceutical industries who have widely been recognised as the forerunners in the adoption of Industry 4.0 initiatives? MAS’s success in developing the Fintech sector and in instituting the concept of "regulatory sandbox" to spur innovation of new technology is also something that other sectors can emulate, to support experimentation and trials of promising innovations, with all the necessary safeguards.

Sir, strong local capabilities and eco-systems for innovation is key to securing Singapore’s economic success and resilience. SMEs need a lot of handholding to engage in R&D. I would like to ask the Minister how SMEs can be supported in shortening their learning curve, embracing technnology and participating fully in R&D.

What impact has the 10 Centres of Innovation (COIs) had on industry development? What outcomes have there been so far, of COIs in assisting SMEs? And how can university research and other research agencies support industry development in more substantive ways?

Deputy Prime Minister Heng Swee Keat spoke about the vibrant startup eco-system in his Budget Speech. There are now 3,800 technology startups in Singapore. As Singapore now also a globally recognised leader of intellectual-property protection and scientific research centre, we should fully deploy our strengths to focus on supporting startups in deep-tech with research-based IP at its core.

Deep-tech start-ups in emerging technology areas such as agri-food tech can grow to become globally competitive. However, these same startups also require larger investments, longer gestation periods, and not every investor has the stomach for the higher risks that come with this. So, I would like to ask the Government how are we going to support these startups.

Mr Lee Yi Shyan (East Coast) : Sir, one of the key trends shaping Singapore's future is the rapid advancement of technology. Artificial intelligence, blockchain, 5G, robotics and so on are poised to shape future industries. The emergence of Industry 4.0 and Services 4.0, are fast becoming the new global landscape.

In fact, the on-going technology boom shows no sign of slowing. According to McKinsey Global Institute, up to 800 million global workers will lose their jobs to new technology by 2030. Earlier on, Deloitte and the University of Oxford predicted that 35% of the jobs in the UK in 2014 would go to robots in 30 years. Here in Singapore, many companies are trying to automate their operations without hiring more workers.

While Singapore is making all efforts to transform, we may still be too slow for competition. Against this backdrop, I would like to ask the Minister, how has MTI, been preparing our enterprises and workforce to adjust to the new economic landscape? In leading sectors such as AI and Blockchain where we are short of a critical mass of talents and companies to play in the global game, have MTI agencies made concerted efforts to bring in lead players and top talents to catalyse our local eco-system development?

Given that Chinese economy is now the second largest, and several of their IT and digital sectors are world-leading, has MTI been successful in attracting Chinese unicorns to be located in Singapore? How is MTI going to identify and attract would-be unicorns from China, India and ASEAN so that Singapore has a fair share of the future Asia unicorns, going forward?

The Chairman : Mr Leon Perera, you can take both your cuts.

Industry 4.0 Networking Platforms

Mr Leon Perera : Mr Chairman, Sir, the challenge of navigating Industry 4.0 is all about attracting investments in future-ready categories like AI, drones, IoT and so on. But that in turn can be unpacked into several distinct challenges that need to be met to attract that investment.

Firstly, creating a viable eco-system with financing and Government support.

Secondly, creating access to a critical mass of workers with the requisite skills and risk appetite and in this we have to balance foreigners with the Singaporean Core.

Thirdly, stimulating local demand for these products. While investments in Singapore would be to serve the region and the world, some local demand would help attract the attention of investors.

And fourthly, creating network effects where interactions among players and industry, academia, research centres, Government and top leaders can take place, thus catalysing new ideas.

To address the fourth challenge, why not catalyse the creation of networking platforms for distinct Industry 4.0 spaces like AI and IoT. One useful model could be the Product Executive Forum in Boston, an exclusive group for senior product leaders in that area. It brings together promising industry executives, academics and top leaders. It functions through breakfast seminars, round-tables and other events. Catalysing such a platform may be helpful. After all, in the Industry 4.0 race, it is not just about having the right people but also about those people interacting and cross-fertilising ideas and work streams.

Energy Security

Next cut on energy security. Mr Chairman, Sir, natural gas is the main way Singapore generates its electricity today. Indonesia accounts for 85% of imported natural gas in gaseous form with the remainder coming from Malaysia.

Pipeline natural gas has been supplemented by imports of liquified natural gas (LNG) for some years now from diverse source countries. However, Indonesia has announced that it is to stop natural gas exports to Singapore from Sumatra in 2023. It was not too clear if pipeline gas from Natunas would be similarly affected but the statement emanating from Indonesia's Energy and Mineral Resources Ministry on 8 February would seem to suggest so. If this takes place, it will place some pressure on our power-generation sources. Renewable energy sources, mainly solar power, as well as regional power grids, would take time to build up.

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Would the Government share its mitigation measures in light of this? Can LNG imports, for example, plug any gap that emerges after 2023? We should also take this opportunity to improve the renewable portion of our power generation mix. I am heartened to hear about the decarbonisation measures spoken about by the Government in Parliament last week. My colleague, Mr Dennis Tan, outlined various perspectives and suggestions from the Workers' Party on environmental policy in his Budget speech last week.

In conclusion, I would like to ask if the Government is studying two other energy possibilities.

Firstly, there have been media reports about private sector plans to build a solar farm in Australia and export the power to Singapore via a subsea cable. Secondly, I noted Senior Minister Teo's statement on nuclear power at the PMO COS that the potential for nuclear power is still being studied. Russia and China are exploring floating nuclear power plants based on seaborne platforms, with Russia in the process of deploying one. It may or may not be a practical possibility for Singapore to derive power by such means in the foreseeable future. But is the Government studying the risks that such projects by other countries may pose to Singapore?

Economic Transition to Decarbonisation

Ms Anthea Ong (Nominated Member) : Chairman, climate challenge is an economic structural challenge for Singapore, noted Minister Chan Chun Sing, who further added that, I quote, "If we cannot manage that, we cannot even attract the industries to create the jobs for the next generation."

IMF recently opined that price on carbon should rise to US$75 per tonne by 2030 in large emitting countries, placing constraints and pressures on fossil fuel-based industries, Yet, new energy technologies are currently available.

Would the Ministry consider (a) conducting and publishing stress test exercises specific to the petrochemical industry to understand growth risk under different scenarios of global carbon policy; (b) evaluating the potential for job creation, cost of living and environmental impact around carbon capture and storage, solar PV, nuclear, importing renewable energy, increasing industrial energy efficiency; and (c) developing a clear plan of economic transition to reduce our reliance on high carbon risk sectors, including actively involving our oil and gas industry before 2030.

Sustainability of Industries

Miss Cheryl Chan Wei Ling (Fengshan) : Chairman, let me begin by declaring that I am a senior executive with an industrial gas and engineering company.

The physical effects of climate change are increasingly visible on the environment, society and the global economy. Climate change is not a distant threat; it is happening now. Increasingly, people want to know if you are part of the problem or part of the solution.

To achieve the commitment in the 2015 Paris Accord of reducing Greenhouse Gases (GHG), it will require changes in societal behaviours, Government regulations, industrial engagement and technology development.

There has been much discussion on emission reductions focused primarily on high carbon footprint industries, specifically the petrochemical and manufacturing industries. Before we focus on any individual, we must first put in perspective and recognise there are many parts in the entire value chain before the GHG emissions.

Take, for example, hydrogen gas. Energy is required to produce hydrogen. But hydrogen is an essential ingredient to produce low-sulfur fuels to meet even stricter environmental standards, thereby reducing the sulfur emissions into our environment. Hydrogen technology can also be used as a transformative energy carrier or as clean fuel for mobility and transportation.

It is important to understand whether the products being produced, the manufacturing processes used and the industry value chain on the whole actually have a larger benefit to the society in terms of carbon productivity, support sustainability and how they help to avoid more GHG emissions on a net basis. Further, we have to ask if the industries invest in new technologies that drive operational efficiency, thereby reducing GHG, adopt usage of renewable energy sources in their production that shape the energy transformation, re-use the waste streams or capture the carbon emitted for alternate usage. Whether the industries are working towards decarbonisation that contributes towards managing climate change is key.

Planning and facilitating transitions towards "cleaner" modes of operation and to cleaner industries would result in significant economic impact in terms of jobs, cost and overall operations. No industry is spared from the effects of climate change and all sectors have to play their part in mitigating the effects of climate change. As such, our ITMs, which are the roadmaps for growth and competitiveness for our industries, should include sustainability as an essential component of their workplan and transformation.

I would like to ask how can we prepare our economy for the ramifications of climate change and reduce our carbon emissions in a sustainable manner? Will MTI consider including sustainability as a fifth pillar of the ITMs?

Relatedly, will MTI consider creating a platform to facilitate exchange of best practices for emission reduction across all major sectors of Singapore's economy, given the success of tripartite collaborations like the Singapore Packaging Agreement? Through this, companies can harness the best knowledge, balance their obligations to all stakeholders to continue driving their financial performance while being a good steward of our environment.

Marginal Return to Productivity Spending

Assoc Prof Walter Theseira (Nominated Member) : Mr Chairman, the Government has implemented many policies to boost productivity growth. Recent schemes include the Productivity Solutions Grant, Enterprise Development Grant and Automation Support Package. Budget 2020's Transformation and Growth strategies continue these efforts.

How effective are each of the recent productivity growth grant schemes, in terms of the marginal return to public spending and the impact on industry and jobs? To what extent can we attribute recent improvements in Total Factor Productivity growth to these policies?

MTI's Economist Service publishes excellent research on the effects of various industry policies. Could the Ministry develop a mandatory programme evaluation framework for all major productivity enhancement schemes? Each scheme should have a logic model that defines target outcomes prior to implementation. Evaluation results should be published at clear intervals, such as at the mid-term and shortly after the conclusion of the scheme. The most important schemes should have their evaluation results subjected to academic peer review to enhance credibility.

Technology-driven innovation can improve productivity, worker welfare and make jobs more desirable to Singaporeans. In a recent working paper, Prof Ivan Png from NUS studied a supermarket chain in Singapore that redesigned the cashier's job to focus only on scanning groceries. Payments were handled by automation. Switching to a scan-only job format improved worker welfare and boosted local recruitment. It also improved scanning-speed productivity by 9%. Prof Png's research highlights the importance of carefully scrutinising the effects of technology improvements.

We should not spend such significant sums on productivity transformation without an equally strong commitment to understanding whether such efforts are cost-effective and meaningful.

Enterprise Transform Package

Mr Douglas Foo : Mr Chairman, in Singapore, SMEs account for an estimated two-thirds of all employment and contribute almost S$200 billion to the economy. SMEs form an integral part of our economy and are seen as the future drivers of Singapore's growth. With the number of SMEs constantly hovering at above 200,000 companies, there is, understandably, a wide range of companies all at very different stages of growth.

While there is a host of support for start-ups and small SMEs, understandably which are more vulnerable, it is timely that we look into investing and supporting SMEs which have managed to show a good track record and are ready to embark on the next stage of growth.

With the announcement of the Enterprise Leadership for Transformation Programme as part of the Enterprise Transform Package, I believe this is a good extension of our current SME support framework.

The Singapore Manufacturing Federation (SMF) stands ready to assist to reach out to this community. I strongly believe that Trade Associations and Chambers (TACs) can be a useful platform to reach out to these business leaders and engage them with new initiatives such as this.

With its aim as providing training to business leaders, the Enterprise Leadership for Transformation Programme is one for the long-term – to enable and develop capabilities. The Budget Statement talks about grooming 900 business leaders over the next three years. May I humbly please ask the Minister: how will these leaders be identified? Are more details available on the plans for the training and mentorship framework? How can TACs continue to help on this journey.?

The Chairman : Mr Teo Ser Luck, you can do both your cuts.

Enterprise Development

Mr Teo Ser Luck : Mr Chairman, MTI was very clear in strengthening the local enterprises and I believe they have a pyramid where most of the enterprises at the bottom were actually lower in revenue numbers – micro-enterprises and then small, medium and large. This is a very good pyramid to show. Although we have over 200,000 SMEs in Singapore, every one is in its different places and most of them are actually micro enterprises. And I understand that MTI's strategy is quite clear. Those who move the needles, there is a lot focus on them. And some of those who move the needles, they are actually large companies. And we have a Scale-up Programme within MTI or EIG to help these companies to be strengthened. So, for example, what Mr Douglas Foo has mentioned about training the leaders, as well as after training the leaders, they make a transformation within a company and strengthen the company.

But you might realise that a lot of the medium sized companies, even to the smaller sized companies, not micro enterprises yet, but smaller ones to the medium sized ones, they have a lot of potential. The Scale-up Programme today, if I am not wrong, actually comprises most of the very large companies or companies that have above $100 million revenue. But the medium enterprises and the small enterprises might have the innovation, technology, concepts and plans or very passionate and enthusiastic entrepreneurs or founders that run them that could potentially make them global. Would the Scale-up Programme include these enterprises as well, from the small to the medium size and have a larger wastage for them?

Heartland Enterprises

And I would like to speak more about the micro enterprises as well. If those who have potential, we can grow them. But you know that some of them at the heartlands who are micro enterprises may not have the chance at all. They are just looking for survival. But these micro enterprises at the heartlands, we call them "heartland enterprises", they have both a commercial and also a social impact on our lives. Having lived in an HDB estate for more than 25 years, there are a lot of the shops that I still visit today and that personalised approach keeps them going. Several of us continue to patronise those shops and they continue to be there.

I know that MND and MTI are trying to spruce up these heartland enterprises. One of the major things they do in the past few years was upgrading the hardware facilities, the surroundings, hopefully, to capture the foot traffic. But you know, it is not just the hardware that we should upgrade. Maybe, it is the software as well. It is about helping these heartland enterprises maybe about a centralised inventory planning, financial planning, product innovation. And some of these things actually matter – bringing them online and become more e-commerce focused. And this may help them to draw in more customers instead of looking at just the foot traffic because, if it is just the foot traffic, they compete directly with the heartland malls and their prices. So, they may not have a chance to position themselves.

Would the Ministry consider looking at the heartland enterprises and look at the software aspect to actually put in the funding to help them?

Digitalisation

Ms Joan Pereira (Tanjong Pagar) : Chairman, during this period of the COVID-19 outbreak, people are taking precautions and minimising contact by avoiding crowds where possible. This crisis provides an opportunity and the motivation for our smaller, especially the simpler and more traditional, businesses and enterprises to adopt digitalisation for their operations.

However, many of these business owners would need help and I would like to request that the Ministry provide the additional support to our heartland enterprises to digitise and go online. Can the Ministry provide the expertise and guide them towards any support grants so that they can serve more customers through this relatively new sales channel? For example, there are many more people now who prefer to have their meals and groceries delivered to them. I hope the Ministry will take this opportunity to help more of our heartland enterprises move towards digitalisation.

Consumer Matters

Mr Lim Biow Chuan (Mountbatten) : Sir, I declare my interest in speaking on this topic as the President of the Consumers Association of Singapore (CASE).

I have three points for MTI's consideration regarding consumer matters.

Recently, there were several complaints recently regarding retailers selling face masks at substantially higher prices. This action of retailers taking advantage of consumers and profiteering during the COVID-19 outbreak is simply unacceptable. May I ask the Minister how many retailers have been queried by the price controller? What action would be taken against such recalcitrant retailers? What else can MTI do to warn businesses that they should not profiteer and should not take advantage of consumers during uncertain times? CASE will be happy to continue working with MTI to educate and empower consumers to know more about their rights and to protect themselves from unscrupulous businesses.

Next, it was recently reported in the media that some consumers were cheated when they tried to buy face masks online via Carousell. Last year, I asked MAS to work with the Association of Banks of Singapore (ABS) and credit card issuing banks to raise awareness of charge-back schemes. And this will enable consumers to seek refund from their credit card banks if they encounter a dishonest online vendor. After all, banks that provide banking facilities for their merchants have a better knowledge and control over their commercial partners. May I ask what is the status of this request to MAS and ABS?

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Finally, under the Consumer Protection Fair Trading Act, if a supplier engages in an unfair practice and refuses to sign a Voluntary Compliance Agreement not to continue its unfair practice, the Competition and Consumer Commission of Singapore (CCCS) may apply for an Injunction against the recalcitrant supplier. Before applying for an Injunction, CCCS needs to conduct an investigation and take statements from consumers. The process is quite tedious and not all consumers will want to spend their personal time giving statements to CCCS and appearing in court as witnesses. Sometimes, if the consumer needs to be publicly identified as someone who was taken advantage of, the consumer may rather not be embarrassed.

I am of the view that consumers will be more forthcoming if they do not have to worry about having to go to Court all the time. Will the Government consider amending the CPFTA to allow CCCS to have wider options of imposing administrative financial penalties instead the current option of only seeking an injunction against egregious businesses? The Competition Act has a financial penalty framework; perhaps a similar framework can be introduced for the CPFTA. Will MTI consider?

The Chairman : Leader of the House.