Warning that Singapore will lose its competitive edge if productivity growth continues to lag behind wage growth, Manpower Minister Lim Swee Say on Tuesday (Nov 1) urged companies to overcome bottlenecks in their operations through partnerships, innovation and reducing their reliance on manpower.
As one of the most competitive economies in the world, Singapore is able to offer products and services at a cheaper price, he noted. However, it is increasingly facing stiff competition: Bottom-tier competitors are producing quality goods as their people become better educated and more skilled, while top-tier competitors are churning out products at a cheaper price through effective use of technology.
“Therefore, if our productivity gains continue to lag behind wage growth, our competitiveness will progressively be eroded,” said Mr Lim, who was speaking at the two-day Singapore Productivity Conference and Exhibition on Tuesday. “Imagine, if we ever allow our cheaper competitors to become better than us, one day, they will be cheaper and better than us. Likewise, if we ever allow our better competitors to become cheaper than us, one day, they will be better and cheaper. We should never allow this to happen.”
Companies, he added, have to increase productivity, innovation and responsiveness in order to compete on price, quality and speed, respectively. Raising productivity is also the only workable and sustainable solution to boost economic growth, said Mr Lim.
He also urged companies to analyse their current business models and think about the next stage of progress. This would involve addressing bottlenecks that may arise along the way. For instance, enterprises that produce more goods than it can sell experience a bottleneck in the market, he noted. To overcome this, firms need to be more innovative in its products and services. Some companies may also not have the resources and knowledge to transform and adapt to the changing labour market. In such cases, the firms can partner others to co-develop innovative practices. Meanwhile, companies that are unable to manufacture its products cost-effectively faces the challenge of an inefficient production system and the solution is to switch to manpower-lean practices. He added: “For an enterprise that is unable to build and strengthen its core competency, human capital is the bottleneck. Maybe progressive employment practices will help.”
The conference and exhibition, which features 25 exhibitors of products that can help firms improve operation efficiency, are organised by the Singapore Business Federation (SBF). Its assistant executive director Koh Tat Liang said that introducing innovative practices is still a challenge for some firms here, especially small and medium enterprises (SME), due to concerns over costs and the uncertainty about whether such solutions would work. “They are intimidated by innovation. They dare not try, they dare not take the risk,” said Mr Koh.
On Tuesday, SBF also launched an enhanced version of its online productivity measurement tool called the Holistic Industry Productivity Scorecard (HIPS), which was first introduced in November last year. The tool is being used by more than 9,700 companies, SBF said. The new version comes with additional features such as graphs and a calculator which enables a company to determine its productivity level without having to provide information such as its name.
news source: todayonline.com