Singapore has some jobs advice for Australia after COVID-19

If you thought the world of work would return to normal next year, take a look at the messaging from rich, innovative – and realistic — Singapore.

The next few years will be a disruptive and difficult time for all industries.

For a political leader just weeks away from an election, Singapore Prime Minister Lee Hsien Loong’s recent speeches have been remarkably unvarnished, unflattering even, as he prepares the citizens of his prosperous city state for painful economic transition.

While other nations are setting their sights on a quick return to pre-COVID-19 economies, Mr Lee has outlined a near-term future in which the globalisation rug is whipped out from under Singapore, leaving one of the world’s most trade-reliant economies to contend with its worst-ever economic contraction and a series of closed doors.

“Companies big and small will be hit hard. Some industries will be permanently changed. Many will have to reinvent themselves to survive,” the 68-year-old leader warned in a nationally televised address earlier this month.

“Workers too will feel the pain. Retrenchments and unemployment will go up. Workers will have to learn new skills to stay employed. The next few years will be a disruptive and difficult time for all of us.”

Jobs and industries will disappear, and in their place new ones must be created.

What those will be is now the subject of a national conversation the government is encouraging at all levels of Singapore society through a series of public and private task forces, and a National Jobs Council staffed by cabinet ministers, businesspeople and union representatives.

The council’s onerous main task is to come up with 100,000 new job vacancies, traineeships and skills training places in the next 12 months, focusing on vulnerable mid-career workers who can help lead the pivot away from aviation, tourism and retail to hi-tech sectors such as artificial intelligence, renewable energy and biomedical science.

“Every employer must be part of our national team in overcoming the jobs challenge,” senior minister and council chairman Tharman Shanmugaratnam warned recently.

“Those who prefer to stay on the sidelines will find themselves being asked tough questions about how they are abiding by the Fair Consideration Framework,” he added, referring to legislation that mandates Singaporeans be considered for jobs before foreigners.

This is not the first time Singapore has had to remake its economy. Since its 1965 independence when its “pioneer generation” forged a modern industrial economy out of the jungly southern tip of the Malay Peninsula, Singaporean policymakers have shifted gears several times — from trading hub to international seaport to financial services and aviation centre — to adapt to changing global economic forces.

Donald Low, a former senior Singapore public servant turned public policy professor at Hong Kong University of Science and Technology, says its next shift will be the most profound yet as Singapore — the world’s most open economy — contends with falling trade and travel and simplified global supply chains. Singapore can survive deglobalisation if it can build up domestic innovation and entrepreneurship,” Professor Low tells The Deal.

“It’s been trying to do that since 2012 when it realised it could no longer rely on a labour-intensive model of growth. The pandemic has just made that imperative even more salient. It’s brought forward the need to create domestic sources of growth.”

In Singapore’s corner is a “trusted, competent, high-performing state” — just what gun-shy economies will be looking for when they pull up the shutters and dip their toe back into the global market, says Low. But that same trusted government — “highly insecure” after six decades of unbroken power — is also what poses the biggest threat to Singapore’s reimagining, he adds.

“Successful companies or economies fail not because they lack clever people or good ideas but because they find it too difficult to cannibalise themselves — to destroy what used to work very well. It’s very difficult for an incumbent party that has been around for almost 60 years to say ‘let’s burn the ship and start afresh’. They know the world has changed but where are the substantial policy changes?”

Professor Low says that if the government is serious about remaking the economy it should start by reducing compulsory superannuation contributions — currently as high as 37 per cent — to “signal that we are not going back to that highly globalised economy”. Despite the political challenges, Singapore will almost certainly emerge from the pandemic in better shape than most, thanks to the deep well of national reserves that will finance at least half of its giant recovery budget.

Mr Lee might have inherited his father’s (Singapore’s founding prime minister) inclination for plain speak, but his $S92bn ($95.4bn) stimulus package could not be less Lee Kuan Yew-like. Many see the huge fiscal splurge — largely directed at keeping viable jobs and industry afloat — as a positive move that breaks with a tradition of austere orthodoxy. How much of it will be channelled into fostering brave new industries, and training the workforces to populate them, is yet to be determined.

“They’re making the right kind of noises but it’s really hard to deliver this stuff,” says James Crabtree, a Singapore-based research fellow at the think tank Chatham House.

“It’s easier when you’re catching up with more innovative countries like the US and Japan, which Singapore did over previous generations. But now Singapore is at the technological frontier, so they have to make it up for themselves, which is much harder because there is no template to copy from.

“You can talk about investing in AI, machine learning and renewable energy; everybody has a hunch these are the industries of the future. But it’s hard to do that in a crisis, when you’re having to spend as much effort thinking about preventing the wheels falling off as you are designing a fancy new vehicle.”