Working smarter

THE ESC, in its report, called for a rise in productivity growth to 2 per cent to 3 per cent over the next 10 years.

It also wants improvements in productivity to account for two-thirds of GDP growth, up from the current one-fifth share.

This week, Senior Minister Goh Chok Tong suggested that businesses work on higher-end goods and services that are less dependent on low-end labour.

He noted that this strategy was similar to the high-wage policy in the late 1970s and early 1980s, but this time around, the ESC recommended raising the foreign worker levy to prod businesses into raising productivity.

But Mr Goh cautioned that Singapore should not move too hard on the levy lest a mild recession erupt and companies find themselves unable to cope.

The ESC has called for a national productivity fund to support investments in training and innovation, as well as a resource centre businesses can tap on.

What more can companies do?

The Asia Competitiveness Institute at the Lee Kuan Yew School of Public Policy, in a report last November, said companies have to change the way they do business.

They have to redesign work processes and provide products and services with higher value to customers to tackle the productivity conundrum.

The ESC says Singapore's productivity in manufacturing and services is 55 per cent to 65 per cent of that in the US and Japan. In retail, it is 75 per cent of that in Hong Kong and one-third that of the US. In construction, productivity is half that of the US and one-third that of Japan.

Mrs Teo believes that a more efficient services sector can contribute significantly to overall productivity growth, as the sector accounts for 70 per cent of GDP.

She also sees huge potential for Singapore to learn from countries like Japan, which has high productivity levels in construction with almost no foreign workers, as a result of better work processes.

She thinks a makeover in the sector, and other areas, could draw Singaporeans to jobs they now shun.

But what of the workers themselves - how can they be more efficient, skills upgrading aside?

Many have the misconception that productivity means having to do more tasks but with less pay and longer hours, even though higher productivity means doing more in the same span of time.

Madam Halimah says it is important for companies to engage workers on the matter, as was done two decades ago, and convince them that better productivity will translate to better wages.

'A highly skilled worker who is de-motivated and disengaged will not be a productive worker,' she cautions.

She also feels an industry-by-industry analysis of productivity growth and the issues and obstacles they face will help tailor customised solutions to improve efficiency.

One thing is certain. At the end of the day, the focus on productivity must improve the quality of new jobs - not just any job but jobs that create decent wages and working conditions.

The circumstances have changed, but the core principles remain the same.

To cite the Economic Committee's report of 24 years ago: The country has no other option but to ensure future economic growth is based on high productivity improvements each year.

zakirh@sph.com.sg

This article was first published in The Straits Times.