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The Business Times

Singapore's productivity drive to target 4 more sectors

Roadmaps to be charted by Q2 or Q3, says Tharman

(SINGAPORE) Singapore's productivity drive will embrace four more sectors - financial services, accountancy, social services and process construction and maintenance - raising the annual GDP contribution of sectors on board the national movement from 40 per cent to 55 per cent.

Roadmaps for the four will be charted by the second or third quarter, said Deputy Prime Minister Tharman Shanmugaratnam at the launch of the National Productivity and Continuing Education Council's (NPCEC) marketing campaign.

Providing an update on the council's work thus far, Mr Tharman, who is also NPCEC chairman, said that roadmaps for 10 of the 12 priority sectors identified last year have been endorsed. Some $600 million of the $2 billion National Productivity Fund has been committed to these sector strategies as well as to three cross-sector programmes.

The inclusion of the latest four sectors, which employ about 220,000 people, also enlarges NPCEC's scope in employment terms, from 55 per cent to 60 per cent of total employment.

While the earlier identified sectors were ones with the most obvious potential for productivity gains, such as construction, the latest four sectors are named for their potential to yield spillover effects.

Financial services is a key component of GDP, a more productive accountancy sector benefits the many companies requiring its services, and the process construction and machinery sector provides engineering, building and maintenance services for the chemical industry's cracker plants. As for the social services sector, raising productivity is of strategic importance as care centres and nursing homes will play a crucial role in meeting Singapore's future social needs.

'At the end of the day, what the productivity movement is about, is quality,' Mr Tharman told reporters yesterday.

'It's about better products, better-quality jobs, better-quality wages. It's really (about) upgrading the quality of the entire economy so that we reach a level that will be able to justify higher wages, with companies continuing to survive and staying competitive internationally. And productivity is the only way you can do that.'

Otherwise, either companies or workers will have to lose in some way.

'If it's more profits, it's less wages; more wages, less profits. The only way to avoid the zero-sum game is to upgrade productivity,' he said.

Yesterday's launch took place on the premises of local printing firm Asiawide Print Holdings, one of the first 'real-life stories' featured in the campaign's print, online, broadcast and outdoor outreach efforts.

Other companies featured in the campaign include pest-control firm AardWolf PestKare, security firm Interlock Security & Investigation Services, and law firm Tan Lee & Partners.

Asiawide Print chief business officer Terrence Hong, 31, said that his aim had been to execute a productivity improvement plan of $5 million over eight years. He now expects to hit his own targets for investing in machinery, processes and software in five years with the help of various government grants.

For instance, Asiawide Print invested $155,000 in a computer-to-plate server that automates part of the mass printing process to slash time taken by 90 per cent, and $90,000 in a high-speed folding machine that folds paper at a rate of 45,000 pieces an hour, 25 times as fast as the manual rate of 1,800 folded pieces an hour.

It received subsidies for 30-40 per cent of both these investments under the Inclusive Growth Programme (IGP), which aims to raise the pay and skills of low-wage workers. Accordingly, Asiawide Print's 'Gains Sharing Scheme' has raised the pay of its low-wage workers by 5-15 per cent, Mr Hong said.

Ang Hin Kee, chief executive of e2i, which administers the IGP, said that 30 per cent of the 500 projects it has funded so far are SMEs.

Mr Tharman said that while it will take some time for Singapore's SMEs to move beyond competing with low-wage players towards competing with medium to high-wage ones, this can be done.

Company leadership is important, too.

'The management (of Asiawide Print) was willing to upgrade and think of themselves not in terms of what they'd do just to survive, but in terms of entering a new market niche a few years from now, competing with new players, more advanced players, trying to move away from competition with the very low-wage players in Asia,' he said.

Teh Shi Ning