Singapore is in the midst of its latest economic restructuring. Since 2010, after the Global Financial Crisis (GFC), efforts have been made to transform the economy to accommodate future industries and move Singapore towards becoming a knowledge-based economy.
With increasing constraints on workforce growth, the emphasis has been on encouraging companies, including small and medium enterprises (SMEs), to increase their productivity levels through increasing the use of automation and better technology, such as more advanced machinery and software. A key challenge is in helping innovative SMEs become part of the value chains of transnational corporations.
Nurturing future industries also comes with the aim of creating quality employment for the growing number of graduates and skilled workers in Singapore. This is to avoid the “high skills trap”, where there is stagnation in the movement of high-skilled workers into in higher value-add, and better-paying employment.
Professors Phillip Brown, Hugh Lauder and David Ashton in their seminal book The Global Auction: The Broken Promises of Education, Jobs, and Incomes (2011), cautioned that among Western societies that have invested in human capital development, the global war for talent has not translated into value-added jobs for the educated middle class.
Professors Brown, Lauder and Ashton explained that although there has been an explosion in the supply of graduates in developed and emerging economies, digitisation has enabled the standardisation of many middle level jobs. Moreover, work, including “brain work” from mainly developed economies could also be outsourced to lower-cost, emerging economies. The remaining knowledge workers in the economy are then polarised between those above or below the ‘”talent radar”, resulting in greater income inequalities.
Simply investing in a tertiary education may not translate into well-paying jobs for Singaporeans. Prime Minister Lee Hsien Loong in his speech to polytechnic students in 2013 urged them to consider other pathways for a successful future. The SkillsFuture fund, set up this year, emphasises skills and life-long learning instead of degrees for future employment in Singapore.
As the Singapore economy evolves to remain competitive, what lessons could it learn from other Western developed economies that had taken similar growth trajectories? More importantly, in face of the reverse auctioning of jobs that will continue to happen as technology and global competition reshape the labour market, what further measures could be taken to avoid the “high skills trap”? How can Singapore ensure a growth of value-added employment, especially for its increasingly better-educated middle class in Singapore? Professors Philip Brown and Hugh Lauder will give their views in this closed-door discussion, chaired by Mr Manu Bhaskaran, Adjunct Senior Research Fellow at IPS.
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