MARCH 7 — The real threat employees in Singapore face in the competition for jobs is not technology but global competition, said Minister for Manpower Lim Swee Say during the parliamentary debate on his ministry’s budget. He also explained why the net growth in Singapore’s total employment has slowed sharply.

Below is an excerpt from his speech.

National Trades Union Congress Deputy Secretary-General Heng Chee How and several members have shared that, on the ground, there is growing concern over job opportunities and job security.

I can understand. Retrenchment has gone up — (to the) highest level since the global financial crisis of 2009.

Unemployment, though low, has gone up too. The resident unemployment rate held steady at about 2.8 per cent for four years from 2012. It went up to 3 per cent last year.

As we transform to take our Singapore economy into the future, some may wonder: What will the future economy bring us? Will more workers be displaced by technology? Will more workers be made redundant? Will more jobs go to foreigners? Will the rise of the digital and gig economy change the employment landscape, resulting in less employment, more freelancing? In short, will we have enough jobs, enough good jobs? Or will more workers be hit by unemployment, under-employment or structural unemployment?

This cannot be the kind of future we want for our workers, our people, our children. The purpose of our transforming towards our future economy is to improve our jobs, our careers, our lives — not to make them worse.

Of course, there is no guarantee that all economic transformation will be successful, as seen in failures in some countries. But for Singapore, we have succeeded time and time again, so far. Working together — whole of Singapore — we must make sure we succeed again.

It will not be easy, because, to succeed, we must have not one, not two, but four keys in our hands to open the door to a future of good jobs and better careers for all our people.

The first key is the key of quality job creation. To create enough jobs of good quality for everyone — young and old, PMETs and the rank-and-file.

The net growth in our total employment (excluding foreign domestic workers) has slowed significantly — more than 200,000 before the financial crisis, more than 100,000 after the crisis, less than 25,000 in 2015 and less than 10,000 in 2016.

Why? There are two reasons for this. Externally, due to business uncertainty, companies are hiring less. The recruitment rate for companies with 25 employees and more has come down — from 2.8 new employees per 100 existing employees in 2012 to about 2.2 in 2016. But more importantly, internally, our local workforce growth has slowed down quite significantly with ageing and low birth rate, coupled with already high labour force participation rates.

Local workforce growth is heading for stagnation in about 10 years. Slowdown in hiring is cyclical. It will pick up again when business sentiment improves. But the slowdown in local workforce growth is structural. Our local workforce growth will never go back to the high growth of 2 per cent, 3 per cent, 4 per cent of the past. Hence, if we try to bring employment growth back to 100,000 a year, we will need to bring in many more foreign workers. If we take in 50,000 more a year, this will mean 500,000 more in 10 years. Higher economic gains will come with even higher social costs. This is not what we want.

We have little choice but to learn how to grow our economy with a workforce growth of about 1 per cent from now on. This means about 33,000 net increase in total employment a year. There will be fluctuations from year to year — some years less, maybe 25,000, some years more, maybe 40,000. This should be achievable.

But even so, we will still face the challenge of rising under-employment. This will happen when the improvement in job quality — not just new jobs, but existing jobs too — is not able to keep pace with improvement in education and skill profile of our local workforce. So far, the overall quality of our local employment has been improving. The proportion of PMET jobs has increased from 49 per cent in 2007 to 55 per cent last year.

Adopt technology for better productivity gains 

As we help every worker to upgrade to become a better worker, we need to make every job a better job, every career a better career. Will we succeed?

I believe we can, but only if we look at technology not as our competitor for jobs, but as our partner in the creation of jobs, quality jobs.

Technology is the main driving force of future growth, globally. We can either use it to our advantage or allow our competitors to use it to our disadvantage. The choice is clear. To be on the winning side, we need to keep crossing the technology gate — better and faster than the competition so that we will not end up in the black hole of global competition. However, with so many innovations out there, crossing the first gate of technology is essential, but it will not be enough. There is still the second gate to cross — the market gate — to compete successfully for customers and build market share. Those who fail, again, will end up in the black hole.

To cross the two gates, we have been building our bridge of innovation. Our next challenge is to make this bridge longer, stronger and wider so that many more can get through as individual companies, as clusters of industry, as one future economy. Not just the pioneers, not just the early adopters but the early majority and eventually, the late majority too.

Some may wonder: The more we strengthen the bridge of innovation, will technology not take away even more jobs from us? Craftmark is a distributor and retailer of over 20 brands of footwear and leather goods and accessories. With the use of RFID (radio-frequency identification), it has cut down man-hours for stock-taking by 90 per cent. Workers were redeployed to serve customers better. (The result is) not just better business for the owners, but also better jobs for the workers. Key words for the Ministry of Manpower: Better jobs.

The Soup Spoon is a popular restaurant chain with more than 20 outlets. To expand overseas, it moved from food retail to food manufacturing. With an automated packaging process, its operation is not only competitive, but also 25 per cent more manpower-lean. Key words again: Manpower-lean.

Tiong Seng is a market leader in construction. To maximise the impact of using a technology known as Building Information Modelling, it helps all its sub-contractors to adopt the same technology. As a result, they improved productivity across the entire value chain by 35 per cent.

The key words are productivity gains. These companies show us that the real threat we face in the competition for jobs is not technology but global competition. Instead of worrying about technology taking away our jobs, we should focus more on how to partner with technology to take away customers and jobs from our competitors before they do it to us. — TODAY

* This article was first published here.

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail Online.