SINGAPORE - Trade and Industry minister Lim Hng Kiang has described Singapore's target of 2 to 3 per cent productivity growth per annum over this decade as challenging, but not overly ambitious.
He gave this assessment in a written parliamentary response to Chua Chu Kang group representation constituency Member of Parliament Zaqy Mohamad on Monday.
Mr Zaqy had noted that the Singapore Business Federation (SBF) had recently expressed concern over the government's productivity target, and wondered whether there were gaps between the government's expectations and those of the SBF and the industry.
Last month, the SBF, Singapore's largest business group with more than 18,000 members, said the 2 to 3 per cent target could be difficult to achieve. It added that developed countries tend to achieve only 1 to 2 per cent productivity growth a year on average, and that it counted Singapore as a developed nation.
In his reply, Mr Lim said that as productivity measures were sensitive to economic cycles, Singapore would have to take a long-term view towards achieving its target.
He said: "If we are able to achieve 2 to 3 per cent per annum productivity growth by 2020, offsetting the weak performance of the last decade, our average productivity growth would be 1.5 to 2 per cent per annum. Seen over the long term, our productivity target is challenging but not overly ambitious."
He added that there was potential to transform practices and improve productivity in key sectors such as construction, food services and furniture manufacturing. The productivity in these sectors has lagged significantly behind that of advanced economies.
"If companies in these sectors are able to adopt the best practices and technologies used in developed countries, and move up the value chain, we can close the gap and achieve significant productivity gains," said Mr Lim.
He reiterated the government's full commitment to the national effort aimed at driving productivity improvements across the economy.