My Thoughts on ESC Reports on Productivity and Innovation

With no hinterlands and a dwindling local population, it spells a certain doom for Singapore if those growth gaps are not immediately plugged. Economic regeneration must be preceded with an innovative culture and the “dare to dream and to deliver” mindset.



Rethinking on the unthinkable and untouchable topic of nuclear energy may open opportunities and possibly innovative options. Can Singapore anchor ourselves as an energy re-distributor and connector in Asia even though we do not have oil, coal or gas? With nuclear energy, can we have a regional buy-in and answers for energy-deficit developing neighbors of Singapore?



Rethinking on subterraneous under-city development is innovative and exciting. Singapore can create different livable city standard with a definitive quality of life. We can engineer different types of underground spaces and create vibrant underground cities with museums, shopping centres, restaurant belts or even more casinos. Will Singapore consider a city like Bikini Bottom set deep in Pacific Ocean where SpongeBob SquarePants lives – an underwater sea city altogether?



Productivity focus is not the end-all prescription for a dwindling local workforce which is now supplemented by cheap foreign labor. With a curb on the influx of migrant workers through the twin levers of control (dependency ratio and levy modulations), it is easy to dismiss that these foreign labor will become unnecessary. In fact, productivity gains and use of migrant labor at the same time can create better multiplier economic returns. Sometime, productivity gains may increase unemployment or underemployment rate since each unit of labor can do more work versus the concept of more labor being compartmentalized to do different work. We hope that we do not fall into the productivity trap and paradox.



The real reason for the productivity paradox may lie in the fact that the Singapore economy is emerging from a pure manufacturing play and migrating to one where service also plays a key role. The animating force in the old economy was the desire to mechanize low level manufacturing and productivity gains can be sharp in this area. Where high value, complex manufacturing activities are concerned and where it involved high cerebral activities like research and development, productivity gain can be low as it involves many trials and many errors.



With increasing jobs in the service sector, where productivity growth is low compared to manufacturing, mechanization will run its course as the predominant driver of productivity. It has proven difficult to introduce the kinds of productivity-enhancing technologies in many service industries that are used in manufacturing. Productivity statistics therefore can be elusive and hard to gain but nonetheless, a must pursued objective to ensure that our Singaporeans workers can form T-shape competencies in terms of breadth and depth of knowledge.