Opening Address by Mr Ong Ye Kung Minister for Education (Higher Education and Skills) at the Lee Kuan Yew Centre for Innovative Cities International Roundtable on the Future of the Economy

Mr Lee Tzu Yang, Chairman of SUTD,

Professor Chan Heng Chee, Chairman, Lee Kuan Yew Centre for Innovative Cities,

Distinguished guests,

Ladies and gentlemen

Introduction – Fate in Our Own Hands

1. I was recently introduced to the work of Sir John Glubb, a British World War I veteran, on the fate of empires:

1. Glubb has studied the lifespans of major empires over human history.

2. He found that the average length of an empire is 250 years, or about 10 generations.

3. There are similarities in how the empires play out through different stages: from the age of pioneers, conquests, commerce, affluence, intellect and decadence.

4. It rings a bell with a Chinese saying,“富不过三代”which describes how the wealth of a family only lasts three generations, or about 75 years. The logic is similar. The first generation builds it. The second generation maintains it, and the third generation squanders it.

2. Singapore is much bigger than a business but much smaller than an empire. Based on both Glubb’s and Chinese saying logic, some may expect the Singapore cycle should play itself out between 75 to 250 years.

1. Based on this theory, Singapore as a young nation of 51 years of age, has a long way to go. There is no reason to believe that we are not in the phase of pioneers and conquest.

2. More importantly, we need to believe and ensure fate continues to be in our own hands, and not based on predetermined cycle. I think that is the purpose of Sir John Glubb’s findings.

3. We are in the middle of a rising Asia and Singapore would be one of the key cities to do business in. We are a key node for commerce, trade and business, and an oasis of stability. We have a people more educated and more capable than ever before. There’s a lot going for us.

Growth Led of Innovation and Productivity, not Manpower Injection

3. Perhaps with this at the back of our minds, we have had the good discipline of conducting economic review every 1-1.5 business cycles or so.

1. We have the Economic Review Committee (ERC) in 2001, the Economic Strategies Committee (ESC) in 2009, and the Committee on the Future Economy (CFE) which started in 2016. The latest report will be released soon.

2. ERC was very much about restructuring our economy, putting it on a firm footing. ESC put attention on productivity, skills and innovation – to tighten manpower, invest in R&D, and encourage lifelong learning. These effects are still felt today.

3. CFE will continue the theme of ESC, but the focus will be different. It is no longer regulating amount of resources, but diving deeper into the algorithms and mechanisms of their allocation, achieving quantum leaps in optimization.

4. While we continue to be open to the world, including its talent, our growth cannot be manpower-led. We cannot pump up growth through labour force injection.

1. We will need to deal with challenging demographic trends.

2. We are constrained by the physical size of Singapore, and more importantly, we need to protect our sense of belonging that we are Singaporeans and develop our unique Singaporean identity.

3. We are on an irreversible journey to pursue growth based on productivity and innovation.

4. Since then, much has been done:

   1. We have incentive schemes encouraging technology innovation like the Productivity and Innovation Credit (PIC) and the Innovation and Capability Vouchers (ICV). These are schemes that have helped companies, both big and small.

   2. We have invested in research & development through the Research, Innovation and Enterprise or RIE2020 plan.

   3. We have launched the SkillsFuture movement to train and upgrade our workforce.

5. The CFE builds on the work of the ESC, but its recommendations will require much deeper changes, on-going changes that can take a generation or more.

The Key Thrusts of CFE

5. The CFE recommendations will therefore be focused on bringing about economic growth driven by productivity and innovation. In other words, we are answering the question: How do we do more with less?

6. First by knowing where to play:

1. We need to identify areas with future growth in external demand, and where Singapore has a comparative advantage in.

2. For example, trade, logistics, airport, seaport have been natural strengths due to our geography and history.

3. We have a very numerate and technology-literate people, placing us well to expand into the booming digital economy.

4. At the same time we should allow ground-up innovation and activities in white spaces and unexpected areas.

7. Second by deepening our skills base, for every worker to do their work better and more competently.

1. We are starting from a position of strength, with a quality education system and good workforce training support.

2. SkillsFuture is a national movement that was launched to enable Singaporeans to develop to their fullest potential throughout life, regardless of starting point.

3. We also need to rethink education – broadening the definition of meritocracy and success away from purely academic grades to recognise skills and competencies.

8. Third by internationalisation:

1. We are so small, to do more with less, we must tap on the regional and global markets.

2. People and companies need an expansionary mind-set and a global outlook to take advantage of these opportunities.

3. We should inculcate this from young and encourage schools and institutions of higher learning (IHLs) to facilitate more meaningful international exposure for our students. Many of our IHLs have overseas internships to expose our students to the outside world.

4. Just like how MNCs flourish because of people prepared to take their business overseas, Singaporeans too must be prepared to venture abroad. Every agency, every policy must over time encourage and recognise Singaporeans from having that sense of venture.

9. Deep skills, and the desire to venture out, are in turn foundations for an enterprising spirit.

1. Government can help create environment that facilitates enterprise – especially through the way we regulate activities.

2. Society plays an even bigger role, in the way it views failures, celebrates successes and decides who to honour.

3. Enterprise and innovation must be the celebrated culture of our next phase of growth. We need to honour entrepreneurs as we do scholars today.

4. I see this spirit in our students today. But every time I conduct a dialogue with them, inevitably they will ask how to persuade their parents to support what they do. A cultural shift must mean that as a society, including parents, we support our youth to be pioneers once again.

10. To be a thriving economic hub, is a precious natural advantage Singapore has. This is because of our geography. We were not just a sleepy fishing village before our founding in 1819. We had been a vibrant emporium. Singapore sits astride the Malacca Straits – a historical thoroughfare for trade, one of the most important shipping lanes in the world, carrying a quarter of the world’s trade.

11. Because of that, enterprising people from the immediate region, Middle East, China, India and Europeans came to our shores and form the diverse population we have today. Upon the foundation of trade we develop transhipment trade, and built one of the busiest seaports and airports in the world. By leveraging or complementing our position as a trading hub, we grew industries such as manufacturing, financial services, tourism, logistics, IT, offshore and marine. Today all these sectors form an ecosystem of synergy and mutual dependence, creating jobs and improving lives.

12. This is the result of the enterprise of a people in a strategically located city. Enterprise is in our blood and DNA. We will have to build upon it further – to make our system more capable, more productive, and more enterprising.

Conclusion – Growth for All

13. The heart of the CFE recommendations are not just that the economy will thrive – that would be the means to an end. Instead, we want to make sure that every Singaporean will share in the benefits of economic growth. Our growth has to be inclusive.

1. When we built Jurong Island and developed the petrochemical industry, it was not just those working on the island who benefitted. It spawned a whole range of supporting industries, from the logistics and supply chain SMEs to the construction and maintenance companies. Thousands of other jobs were created for Singaporeans.

2. The future growth sectors will have a similar effect. You will not have to be a programmer to benefit from our push into the digital economy.

   1. As a Member of Parliament, during my walkabout, I met a Hokkien-speaking middle-aged man. When I asked him where he worked, he said “Google”. He did not look like a coder, and when I probed further, I found out he had a job in the Google cafeteria, with a team of staff working for him! This is an example of how the digital economy and other growth industries will create jobs. This is an inclusive growth.

   2. We formed the CFE and the various economic review committees before it because our strategy must be inclusive. The top elites don’t need economic reviews to do well.

   3. We want to know our strengths and where we can play to maximise success, build up the skills base, take our ideas out to the world, develop that enterprising culture, so that everyone – mature and at-risk workers, and future generations of Singaporeans included – reaps the benefits of a growing economy.

   4. Singapore will not just be a control tower, but a runway where resources, ideas and talent coalesce, take-off to the rest of the world, generate a stream of knock-on economic activities, and benefit many others.

14. CFE reflects the consolidated views and ideas of over 9,000 people, but the work does not stop here. In fact, the conversation would have just begun. I would like to hear your views, so I will stop now and open time to questions from the members and the floor.