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Report of the Committee on the Future Economy

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Report of the Committee on the Future Economy Report of the Committee on the Future Economy Pioneers of the next generation A B CONTENTS Exchange of Letters with the Prime Minister ................................................................................... ii Executive Summary ............................................................................................................................. 1 Strategy 1: Deepen and diversify our international connections .................................................. 16 Strategy 2: Acquire and utilise deep skills ........................................................................................ 22 Strategy 3: Strengthen enterprise capabilities to innovate and scale up ................................... 28 Appendix 3.1: The role of manufacturing in Singapore’s economy ............................... 33 Strategy 4: Build strong digital capabilities ...................................................................................... 36 Strategy 5: Develop a vibrant and connected city of opportunity ................................................ 41 Strategy 6: Develop and implement Industry Transformation Maps (ITMs) ................................ 48 Appendix 6.1: List of ITM Clusters and Industries ............................................................ 53 Appendix 6.2: Logistics ITM ................................................................................................. 54 Appendix 6.3: Retail ITM ...................................................................................................... 56 Strategy 7: Partner each other to enable innovation and growth ................................................ 58 Annex 1: Subcommittee Reports ....................................................................................................... 64 Subcommittee on Future Corporate Capabilities and Innovation ................................. 65 Subcommittee on Future Growth Industries and Markets.............................................. 72 Subcommittee on the Future of Connectivity ................................................................... 83 Subcommittee on the Future City ....................................................................................... 91 Subcommittee on Future Jobs and Skills ........................................................................... 102 Annex 2: List of Contributors ............................................................................................................. 109 Main Committee Members ................................................................................................. 110 Subcommittee Members ..................................................................................................... 111 Other Contributors ............................................................................................................... 128 Secretariats ........................................................................................................................... 130 i EXCHANGE OF LETTERS WITH THE PRIME MINISTER 7 February 2017 Prime Minister The Committee on the Future Economy (CFE) was convened in January 2016 to review Singapore’s economic strategies. You asked the Committee to build on the Economic Strategies Committee’s work in 2010, and to take a fresh look to address the new challenges we face. 2. Members of the CFE were drawn from diverse backgrounds, including government, private sector, and the labour movement. The Committee, Subcommittees and working groups benefited from the contributions from employers and workers, academics, professionals, students, private companies, public agencies, unionists, trade associations and chambers, as well as Singaporeans abroad. In total, more than 9,000 people contributed their ideas and energies. 3. The CFE has completed its work and now submits its key recommendations. 4. Since 2010, we have made good progress in nurturing a highly-skilled people, growing an innovative economy, and building a distinctive global city. However, the world today is very different from the start of the decade. It has seen unexpected events, overlaid with longer-term structural changes. First, global growth has been subdued and is expected to be lower than the previous decade. Second, we are in an era of rapid technological change, and global value chains and production patterns are changing rapidly. Third, political uncertainty has risen as political parties respond to the anxiety of some segments of the population to turn inwards and protectionist. All these are significant changes which are still playing out. We have to make plans and be prepared to cope with these changes and uncertainty. 5. The CFE assessed that Singapore is starting from a strong position, and we are confident we can chart a new course. There are many opportunities for us to innovate, deepen our capabilities, remain open and connected, and stay relevant to the world. The US and Europe continue to have innovative companies and people, whom we can work with. We also see strong market potential in many parts of Asia – in particular ASEAN, China, and India – as well as in emerging markets farther afield. Singapore is also well-poised to tap into several growth sectors, driven by factors such as the rise of the middle-class and urbanisation in Asia. 6. Our vision is for us to be pioneers of the next generation. We have identified seven mutually-reinforcing strategies that will maximise the chances of Singapore’s success. First, Singapore needs to deepen and diversify our international connections, and continue to support free and open markets. Second, we will build on SkillsFuture, and support the acquisition and utilisation of deep skills. Third, we need to strengthen enterprise capabilities so that our companies are innovative and competitive. Fourth, we need to develop strong digital capabilities and support the pervasive adoption of digital technologies across all sectors of the economy. ii 7. To support these four strategies, three key enabling strategies will have to be put in place. First, we must invest in Singapore’s physical and social infrastructure to support these strategies. Second, we need to ensure the execution of these strategies is done in an integrated way, through the Industry Transformation Maps (ITMs). The ITMs can address the specific needs and possibilities in each industry, and realise synergies across industries. Finally, we need to partner each other to enable growth and innovation. Our ability to work with and trust one another will be our distinct competitive advantage and the key to the successful execution of the strategies we have laid out. 8. We believe our strategies will create an economy that offers ample opportunities, with all Singaporeans enjoying sustainable wage growth and meaningful careers. Together, we will build a Singapore of global relevance; a Singapore that can ceaselessly reinvent herself and grasp new opportunities. We are prepared for tomorrow. 9. We thank you for the privilege of serving on the CFE. iii 8 February 2017 Mr Heng Swee Keat Minister for Finance Co-Chairman, Committee on the Future Economy Mr S Iswaran Minister for Trade and Industry (Industry) Co-Chairman, Committee on the Future Economy Thank you for your letter dated 7 February 2017, submitting the recommendations of the Committee on the Future Economy (CFE). The world is going through a period of great uncertainty. Significant structural shifts are taking place in many countries. Industries and jobs are changing rapidly. Amidst the disruption, there will also be opportunities. We cannot be sure which industries will perish and which will flourish. What is certain is that Singapore must stay open to trade, people and ideas, and build deep capabilities so that our people and companies can seize the opportunities in the world. The CFE has proposed a comprehensive set of recommendations to guide our economic strategy for the next 5 to 10 years. The Government accepts the strategies proposed and will pursue all of them. Ministers will provide a full response during the 2017 Budget Speech and Committee of Supply debates. Developing the strategies is the first step. The strategies are our guide but what counts is how well we implement them to transform our economy. This will require difficult trade-offs as our resources are limited and we have to take calculated bets. We will take a hard-headed, pragmatic approach. When results are promising, we will vigorously pursue them. When a scheme does not look like it is going anywhere, we must have the courage to cut losses. That is how we progressed for the past 50 years and the only way to continue progressing in future. iv 8 February 2017 Mr Heng Swee Keat Minister for Finance Co-Chairman, Committee on the Future Economy Mr S Iswaran Minister for Trade and Industry (Industry) Co-Chairman, Committee on the Future Economy Thank you for your letter dated 7 February 2017, submitting the recommendations of the Committee on the Future Economy (CFE). The world is going through a period of great uncertainty. Significant structural shifts are taking place in many countries. Industries and jobs are changing rapidly. Amidst the disruption, there will also be opportunities. We cannot be sure which industries will perish and which will flourish. What is certain is that Singapore must stay open to trade, people and ideas, and build deep capabilities so that our people and companies can seize the opportunities in the world. The CFE has proposed a comprehensive set
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