The future of Singapore is one where the economy must grow with fewer workers and a higher level of productivity, outgoing Manpower Minister Tan Chuan-Jin said on Tuesday.
It is a situation the country cannot run away from as a mature economy and society, he said, but added that the Republic's fate "need not be pre-determined" by this, so long as everyone pulled together in the same direction.
Writing in his final May Day message ahead of his move to the Ministry of Social and Family Development on Monday, he identified the two trends that will shape Singapore's future in the coming years:
One is that the labour market will remain tight, as the growth of the local labour force slows down towards the end of this decade.
The other is that the government will, at the same time, keep the foreign workforce growth sustainable and let it expand at the current pace.
He noted that it was "encouraging" that the economy grew by 2.9 per cent last year, and is expected to grow by between 2 per cent and 4 per cent this year, amid this tighter labour market and an uncertain global economic environment.
"We must press on with our efforts to become a manpower-lean economy that is driven by productivity, innovation and skills, and one that can create good jobs and sustain wage growth for our workers," said Mr Tan.
He added that the government, as the key enabler of the SkillsFuture national movement, would help workers upgrade their knowledge and skills to stay relevant and take advantage of career opportunities in this new-age economy.
The unions, on their part, should encourage their members to take ownership of their learning and careers, and persuade their management partners to embark on SkillsFuture initiatives.
As for companies, they have to proactively develop their workers, provide career pathways and recognise their contributions as they move up the ladder, he said.
And with more older Singaporeans in the workforce, the government will give them greater assurance in employment and retirement through initiatives such as the additional Special Employment Credit, which encourages employers to hire those aged 65 and up.
Meanwhile, in his first May Day message since becoming president of the Singapore National Employers Federation last September, Robert Yap stressed the need for employers to press on with productivity drives and to reduce their reliance on manpower.
He cited a Citigroup report in February, which said that American companies achieved a resurgence in productivity between 1996 and 2004 by re-designing themselves to accommodate investments in new technologies.
That report also noted that the more transformative a technology, the longer it could take for workers, organisations and economies to adapt to it.
Dr Yap, who is also the group chairman and chief executive of supply chain management firm YCH, said: "There is still much to be gained from the digital economy, but shifts in mindsets and organisation structures can take time. This means that we cannot be just investing in technology and expecting productivity to improve."
He urged employers and unions to co-operate at every level and leverage the strong tripartism that has been built up over the last 50 years.
This was a point Mr Tan also made earlier. The minister said that Singapore's economic and social progress over the years had not come by chance, but through the concerted efforts of workers, employers and the government.
He paid tribute to Singapore's late founding prime minister Lee Kuan Yew, who had championed a "constructive model" of tripartism.
"(This model is) one which takes care of workers' interest, builds a competitive economy and gives all Singaporeans hope for a better future. The model has served us well, and will stand us in good stead to tackle future challenges," he said.
This article was first published on April 29, 2015.
Get The Business Times for more stories.