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Skills shortages, labour curbs may hit Singapore manufacturing
SINGAPORE, May 5, 2019 (BSS/AFP) – Singapore has attracted high-tech
manufacturers with incentives and a well-educated workforce but growing
demands for highly skilled labour and government moves to curb numbers of
foreign workers may mean a tougher path ahead.
The city-state is a major producer of products ranging from aircraft
engines to medical equipment and oil rigs, and top firms such as Rolls-Royce
and German industrial conglomerate Siemens have operations there.
British appliance pioneer Dyson will open its first electric car plant in
the city-state, with vehicles set to roll off the production line from 2021,
and this year announced plans to move its global headquarters to Singapore.
But a potential shortage of more specialised skills as firms shift into
fields such as robotics and 3D printing, as well as moves to make it more
difficult to hire foreigners in the space-starved country, may make it less
attractive to set up shop in Singapore in future.
Authorities work closely with businesses to help them set up and find
workers, as well as giving them incentives such as tax breaks, but rapid
technological changes in many industries makes it tougher for a government
used to planning well ahead.
“Ten years ago, policymakers could plan with greater certainty,” Song Seng
Wun, a regional economist with CIMB Private Banking, told AFP.
“The age of disruptive technology is creating a lot more uncertainty,” he
added.
In a recent report, the ministry of manpower said that one in three job
openings in 2018 was left unfilled for at least six months and among the
reasons employers gave was “lack of candidates with the necessary specialised
skills”.
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– Foreign labour curbs –
Singapore has traditionally welcomed foreign workers in sectors ranging
from construction to investment banking to plug skills shortages and do jobs
that locals shun, and 40 percent of its 5.6 million inhabitants are from
overseas.
But in recent years unease has been growing at the large number of
foreigners in the city — which is just half the size of Los Angeles — with
local residents blaming them for overcrowding and pushing up living costs.
The government has responded by making it more difficult to hire in certain
sectors and making companies prioritise local recruitment. This includes
moves such as accepting applications for certain higher-skilled jobs only
from Singaporeans for a set period before opening them up to foreigners.
At a forum on Singapore’s labour challenges, participants raised concerns
that “certain policies such as increasing foreign worker levies and blanket
foreign worker quotas have seemingly constrained growth for many companies”,
wrote Mooris Tjioe, from Singapore think-tank the Institute of Policy
Studies.
“Participants agreed that, for now, Singaporeans appear to have accepted a
trade-off of lower economic growth for a restrictive foreign labour policy,
in favour of social considerations,” he wrote.
Still, a large number of high-tech manufacturers view Singapore as the best
place to set up their Asian headquarters and plants due to proximity to
booming regional markets, ease of doing business and political stability,
despite the relatively high costs.
The city-state makes half the world’s top 10 drugs, 70 percent of its oil
rigs and is the fifth biggest source of refined oil.
– From rigs to drugs –
Rolls-Royce produces its “Trent” engines for Boeing’s 787 Dreamliner as
well as the Airbus A380 and A330neo at its Singapore plant, and believes that
cooperation between companies, the government and educational institutions is
a major advantage.
Singapore-based companies are in close contact with universities and
polytechnics so they can tailor their courses according to the requirements
of high-tech manufacturing, said Bicky Bhangu, Rolls-Royce president for
Southeast Asia, Pacific and South Korea.
“What you see in Singapore is a very effective coming together between
government, industry and academia,” he told AFP, adding an annual student
internship scheme was a major source of recruits for the firm.
Local schools may however face a tougher time in future as they scramble to
adjust their curricula fast enough to meeting changing demands from industry,
and the city’s leaders are warning that workers must urgently take action to
improve their skills.
In a Labour Day speech, newly appointed deputy prime minister Heng Swee
Keat — who is tipped to take over as premier in the coming years — warned
that without action, some Singaporeans could fall behind in the jobs market.
“Those who are well-educated and digitally savvy can go on to build more
skills and do even better. Those who start with less may risk falling
behind,” he said.
BSS/AFP/HR/1020