Progress of Industry Transformation Maps

18 Mr Patrick Tay Teck Guan asked the Deputy Prime Minister and Minister for Finance (a) whether he can provide an update on the progress of the 23 Industry Transformation Maps (ITMs) since their announcement in 2016; (b) whether the objectives set out for each of the clusters/industries have been achieved; and (c) whether the Government is planning for ITM 2.0 and, if so, when will it be rolled out given the current economic downturn and disruption.

19 Mr Sharael Taha asked the Deputy Prime Minister and Minister for Finance (a) what is the progress of the Industry Transformation Maps (ITMs); (b) whether the Ministry plans to make changes to the ITMs in view of the impact of COVID-19 on the economy; (c) whether the impact of workplace transformation has been considered in each of the 23 ITMs; and (d) whether the ITMs can specifically address the upskilling, re-training and hiring of mature workers, workers with disabilities and other vulnerable groups of workers for an inclusive transformation of the industries.

The Deputy Prime Minister and Minister for Finance (Mr Heng Swee Keat): Mr Speaker, can I have your permission to take Question Nos 18 and 19 together?

Mr Speaker: Yes, please.

Mr Heng Swee Keat: We have seen encouraging progress since embarking on our Industry Transformation Map (ITM) journey in 2016. Singapore's overall labour productivity, as measured by real value-added per actual hours worked, rose by 2.7% per annum from 2016 to 2019, up from 2.2% in the preceding three years. Real median income from work of full-time Singaporeans, including employer CPF contributions, rose by 3.7% per annum from 2016 to 2019, higher than the 3.2% per annum growth in the preceding three years.

Up to 2019, our ITMs have been progressing well, with most of them on track to meet their targets.

Unfortunately, COVID-19 disrupted this progress. Some of our ITM sectors, such as Air Transport, Hotels and Retail were badly hit, and will take time to recover. That is why as part of the series of Budget measures, we provided special support for the harder hit sectors, to help them stay resilient.

Beyond the immediate impact, COVID-19 has also accelerated long-term structural trends such as digital transformation, a review of globalisation and a focus on sustainability.

We must therefore build on the head-start and progress that we have made in the last five years, and refresh our ITMs to meet the accelerated changes brought about by COVID-19.

For each of the 23 ITM sectors, we will update our sectoral strategies to create and seize opportunities through digitalisation, innovation, internationalisation, upskilling of workers and job redesign, with the aim of lifting the productivity and wages of our workers, and creating good jobs for Singaporeans. We target to complete this by next year.

Our ITM refresh is complemented by the work of the Emerging Stronger Taskforce and the Singapore Together Alliances for Action, which have served as pathfinders to help us seize immediate opportunities, even amidst COVID-19.

Ultimately, we transform our economy for the benefit of our people. Our ITMs chart the path forward for each sector to be competitive, so that our people can access good jobs and opportunities which improve their lives. Jobs and Skills are therefore key pillars of each ITM, supported through initiatives such as the next bound of SkillsFuture. We pay specific attention to mid-career workers, to help them stay employable and access good jobs.

Our tripartite partners have also been working closely together to ensure that business transformation is tied to workplace and workforce transformation. For example, Workforce Singapore has worked with Government agencies and industry to develop Jobs Transformation Maps to provide detailed insights on the impact of technology and innovation on the industry and workforce. The Labour Movement has also been working with businesses to establish Company Training Committees, to help our workers upgrade while supporting their companies' transformation. More immediately, the Labour Movement's Job Security Council is working hard to match and place workers, minimise retrenchments and shorten unemployment periods for our workers. This way, we achieve inclusive growth which uplifts our workers.

The Government is acutely aware of the plight of vulnerable workers who have been hardest hit by the pandemic. We have, therefore, been providing additional support for these workers who require more time and effort to reskill, upskill and re-join the workforce. One example is the Jobs Growth Incentive, to which we have allocated another $5.2 billion during the recent Budget to extend the hiring window by seven months. A higher level of support is provided to employers who hire mature local workers, persons with disabilities and ex-offenders.

To help our senior workers, the Senior Employment Credit provides wage offsets for businesses that employ Singaporean workers aged 55 and above. We have also introduced the Enabling Employment Credit, which provides employers with wage offsets for every Singaporean person with disabilities earning below $4,000 per month that they employ. We will continue to build on these schemes to ensure that no one is left behind as we work with our tripartite partners to emerge stronger from the pandemic.

Mr Speaker: Mr Patrick Tay.

Mr Patrick Tay Teck Guan (Pioneer): I thank the Deputy Prime Minister for the update on the ITMs. I just have two supplementary questions.

Firstly, in particular, the ITMs, I think two key focuses are on jobs growth as well as strengthening the Singaporean Core. I hope, as MTI and the respective sectoral ITMs flesh out their updates and do their revisions, to share where the jobs growth opportunities are as we overcome and emerge stronger together post-COVID-19.

The second supplementary question I have is with respect to the ITMs. I think different ITMs have varying successes. I hope to see more best sharing of good practices and the successes and the key success factors as well. But I also want to urge MTI as we look at the 23 ITMs and as we prepare for the next bound, to continue the good work of the sectoral tripartite committees because I felt, being personally involved in some of them, they are very useful in overcoming the sectoral challenges. So, I urge that, as we prepare for the next bound, to continue the good work of these sectoral tripartite committees.

Mr Heng Swee Keat: I thank Mr Patrick Tay for his supplementary questions.

To his first question on looking for new growth opportunities, I fully agree with him. In fact, as I have mentioned in my reply earlier, a post-COVID-19 world will be a very different world. We are already seeing many of these changes. Changes have been accelerated and, in particular, technological trends have also been accelerated, especially digitalisation. As I have said in my Budget speeches before, COVID-19 has accelerated digitalisation in a way which very few CTOs have been able to do. There have been significant changes in the nature of work and even in the nature of the way businesses conduct themselves. And I must say that our agencies are already responding to that quite well.

If you take, for example, the whole digitalisation trend, we are not waiting for the update of these ITMs before we act. We have increased the number of digital leaders and performers, especially among SMEs, from 9% to 12% from 2019 to 2020, and the share of digital starters also fell from 68% to 62%. Some of our MNCs and large local enterprises are on par with our global peers in this digitalisation.

What this digitalisation trend means is that the nature of the job and the nature of skills will be very different, which is why it is critical that we develop those skills of our workers in this respect. To meet this job growth, the answer is not just in the Government deciding which are the sectors that will grow and which are the sectors that will not.

And the significance of the Jobs Growth Incentive is exactly that when companies decide that they are going to grow, we incentivise them to draw in more workers and that is what the whole SGUnited Jobs and Skills package is all about. There are another part which is about the Attachments programme so that workers can get attached to get a sense of the nature of the job and companies can have a chance to evaluate the workers. For workers in newer areas, they can also go for training. These are the different ways in which we are preparing our workers and to grow our Singaporean Core, to move Singaporeans into areas with growth opportunities.

On Mr Patrick Tay's second question about the varying success of the ITMs. In fact, whether you do ITM or you do not do ITM, the nature of economic growth cannot be predicted in advance. You cannot say that in five years, these sectors will grow; in five years, these sectors will shrink. There are sectors which will face more challenging conditions for which we are helping them to stay resilient. I mentioned that air transport and tourism are the most obvious areas from this COVID-19 crisis. But at the same time, even in normal times, you will find that some sectors will grow faster than others. Therefore, the way that we are helping our workers is to ensure that we provide as much training as possible – and that is where I want to commend our Labour Movement for the very good work that they are doing – both in starting the company training committee so that when companies are looking at how they will change and transform, at the same time, the union is working together with them to look at how the workers can be retrained for that. And this is not something to be taken for granted. I think this tripartism where our Labour Movement is not there to just oppose change but, in fact, to facilitate change so that, at the end of the day, whatever changes that are made can be sustainable in that you have the full support of our workers and our workers can have a better life. So, this is really the crux of this. And I want to thank Mr Patrick Tay and his team for their very hard work in the Labour Movement in doing this.

Mr Patrick Tay asked whether there would be sharing of good practices. Indeed, in fact, I have just made some changes in the way we organise our ITM work to link it to our work on R&D so that as technology and innovation play a more critical role in our economic future, we can work on both simultaneously. How can we help companies to transform to be more technologically savvy? And, in turn, I mentioned about the jobs transformation programme. How do we design programmes to enable our workers to have better skills in order to access those better jobs so that not only do the companies have higher productivity but our workers can look forward to higher wages and better employment prospects?

On Mr Patrick Tay's point on the sectoral tripartite committee, I fully agree with him. These are important work in which we bring all our stakeholders together so that we put our efforts together to achieve a greater impact. So, I would like to thank Mr Patrick Tay and Mr Sharael Taha for their questions.

Mr Speaker: Mr Sharael Taha.

Mr Sharael Taha (Pasir Ris-Punggol): I would like to thank the Deputy Prime Minister for sharing the progress made by the ITMs and the improvements we have in productivity and I look forward the ITM refresh.

I would like to pose two supplementary questions on ITMs. Given that the ITMs began a few years ago, much has changed since then and we have learnt a lot in the past one year from the pandemic and changing macroeconomic situation. Are we incorporating these lessons learnt and revising the ITMs to better prepare ourselves for the future? For example, in the manufacturing ITM, should we be incorporating capability for vaccination production or preparing for PPE production in preparation for the next pandemic? And for the healthcare ITM, should we explore the use of technology or develop more skills to build latent capacity in our healthcare system that can be called upon and scaled up quickly when the next pandemic arises?

For the second question, coincidentally, today marks the first day, after close to a year, where working from home is no longer the default work arrangement. In an earlier Straits Times poll, three in four respondents do not wish to return to the workplace full-time. Work from home or work from anywhere has brought about many benefits for both businesses and employees, including for the vulnerable workers and workers with mobility challenges. Not only does it allow jobs to be more accessible to all, it could also be a competitive advantage for companies in Singapore to vie for jobs outside of Singapore. This could be a game-changer for our professional services ITM. Can we lock in the gains of remote and flexi-work arrangements before we revert back to the pre-COVID norms? Can we relook at the opportunities to incorporate this into our ITM, moving forward?

Mr Heng Swee Keat: I thank Mr Sharael Taha for his questions. Indeed, not only can we work from home, we can work from anywhere and you get calls any time as well.

Mr Sharael Taha mentioned about whether we should take into account the lessons learnt from the pandemic as well as the lessons from these few years of implementation. Indeed, we should do that. And to the Member's specific question, for example, on manufacturing, what are the new opportunities for production of vaccines, for example, or even some way in which we can play a role in the vaccine, the economic agencies have been working very hard on this and I would leave the economic agencies to provide the announcement. All I can say is that I have provided sufficient budgetary support for us to secure some of these projects.

On the Member's question about the skills, for example, healthcare and for us to move towards digitalisation, indeed, that should be the way. And as I have said, digitalisation has been accelerated and we must take this opportunity to look at how we can not only digitalise as much of our companies' processes as possible but also help our workers to build the new skills to be able to access those opportunities. And, in fact, beyond that, I have seen in many of our community centres, for example, that many seniors are being taught how to use digital tools – and I just did one over the weekend – as well as the projects to help our hawkers go digital, help our stallholders go digital and these are achieving good progress. So, I will say, certainly, we must take into account the changes.

As to the Member's second question about work from home and work from anywhere and that this is a game-changer, I fully agree with him that this is a game-changer. But let me add that this is a game-changer that cuts both ways. If you can work from home, anybody in the world can also work from home. And I have seen, for example, videos of how workers in very, very depressed areas being able to access jobs in very advanced economies because all they needed was a knowledge of English, a knowledge of basic skills in doing what they were good at doing, a laptop and an Internet connection. And I have seen companies that have actually chopped up a very complex project into different bits and different parts for which they put it online for bidding and then you have workers all over the world bidding for those projects. And in one of the reports I saw, the worker was extremely happy because he had never earned that amount in his whole life. The company was extremely happy because the the cost to him was a fraction of what he had to pay in an advanced economy with very strong laws regarding employment and so on.

So, it is a major, major opportunity but also a major challenge. That is why in all of last year's Budgets and this year's Budget, we have placed a very, very strong emphasis on upgrading the skills of our workers and I look forward to our Labour Movement working closely together with us on the Company Training Committee and a Job Security Council so that we can help our workers access good jobs, better jobs and to be able to ride on this digitalisation trend. And I hope that the work that we are going to embark on in a refreshed way, linking our R&D efforts with the economic sectors and pulling together these different strengths of efforts will enable us to make even better progress.

3.00 pm

Mr Speaker: Order. End of Question Time. Introduction of Government Bills. Deputy Prime Minister and Minister for Finance.

[Pursuant to Standing Order No 22(3), Written Answers to Question Nos 21-35, 37-51, 53, 55-64, 66-71, 73-79, 81, 83-90 and 92-103 on the Order Paper are reproduced in the Appendix. Question Nos 20, 36, 52, 54, 65, 72, 80, 82 and 91 have been postponed to the next available sitting of Parliament.]