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Wednesday, November 4, 2015

Daily Lessons from Life 03 November 2015 - Experts weigh in on the future of manufacturing in Singapore

"Experts weigh in on the future of manufacturing in Singapore - CNA 03 November 2015

SINGAPORE: The Republic may have become a more services-driven economy, but manufacturing is still a key pillar, accounting for a fifth of GDP and more than 400,000 jobs.

Last week, in a speech at the Singapore Economic Policy Forum, Minister for Trade and Industry (Industry) S Iswaran that said to unlock future economic potential, the Singapore economy must "shift from simply adding value to creating value".

Moveon Technologies, which has plants in Singapore and Penang, makes optical parts for the likes of Philips, Intel and Microsoft. It also forms a key part of the Original Equipment Manufacturer (OEM) supply chain for many consumer and industrial goods.

Its high-precision plastic optical parts are responsible for the camera on mobile phones, or the headlights on cars.

The company has been supplying multinationals with component parts for the last eight years. However, just last year, it began developing its own product - an optical lens that will go into a camera application.

The camera - currently at the R&D stage - has already caught the attention of a global internet giant.

If successful, Moveon will graduate from being a component supplier to having its own technological know-how and product.

In the face of regional competition and domestic restructuring, Singapore's manufacturing sector has come under pressure in recent years. In fact, manufacturing workers have been singled out by the Labour Movement as the most at risk of losing jobs.

According to experts, in order to keep manufacturing jobs in Singapore, more needs to be done beyond dangling financial incentives to companies.

Mr Duleesha Kulasooriya, head of strategy at Deloitte Center for the Edge, said: "Singapore has been very good at narrowing on something, and trying to fix a narrow problem. But what's required in the future is building ecosystems, building a whole fabric, and that means connecting all these different parts together.

“It has the infrastructure and people to do that, but it needs to change the focus from solving narrow
problems, to raising the water level for everyone - and that goes into education and enabling everyone to support everyone else."

Mr Irvin Seah, a senior economist at DBS, said: “It is no longer just about having an attractive value proposition for the big MNCs to locate their activities in Singapore or use Singapore as a regional headquarters. This is about growing ... our economy, driven by our local enterprises."

Over the last decade, Singapore's manufacturing sector has declined in importance relative to the services sector, with its share of GDP falling from over a quarter to just 17 per cent in 2014. However, according to SPRING Singapore, this does not necessarily mean the manufacturing sector is hollowing out.

SPRING Singapore's group director for industry and enterprise development, Edwin Chow, said: "Of course, there will be companies that have moved out. The most famous one everyone quotes is Seagate.

“Seagate used to make disk drives in Singapore but Singapore companies became a little bit too expensive, so Seagate decided to move to Malaysia and to Thailand. Some of our supporting industries have also followed suit. But Seagate now makes the media, the disk media - the more expensive stuff - that runs the disk drives, in their plant over in Woodlands."

SPRING Singapore added that one key challenge is that not all companies are as forward-looking as Moveon.

Historical growth of Singapore's sector depended - to a large extent - on attracting multinationals, who came in to create jobs and transfer technological know-how.

Going forward, it will be about how Singapore companies can leverage their own ideas to create world-beating products and services."

To have MORE jobs from SMEs, we simply have to promote 'entrepreneurship' MORE since SMEs are hiring the bulk of our workers  urship'  in Singapore!

1. our 'younger' generation, Gen Y and Z, have parents who simply are just too 'generous' with their kids. Not wanting them to 'suffer' hardship, they try all means to get them to a tertiary/undergraduate education, locally or overseas, in campus or long-distance learning NO MATTER WHAT and at what expense. Alas, since graduates are now a dime a dozen, the new graduates MAY NOT find jobs that match up to their 'I am a graduate and deserve a graduate's pay and job'!;

2. so better make it painful in the earlier days than to let them find out after spending money and time on getting a tertiary graduate certificate! Alas, the 'parents' of Generation Y and Z SIMPLY are NOT made up of such emotion. Reason: They have 'fairly good life due to their tertiary graduate's education' then! They are comfortable enough to 'support the kids till they die' even if they stay home and choose 'unemployment' over 'doing a job that does not match the graduate's expectation of pay and job!;

3. manufacturing jobs? Talk about moving to 'high end manufacturing' is STILL not goo enough. The number of 'High end manufacturing' jobs will be SMALL and specialized.

To be able to absorb the annual, now, almost 55-60% of each primary school cohorts that make it to tertiary and/or undergraduate program, it simply means 'more graduates chasing fewer graduate kind of jobs and pay' that were been created! Salary will be depressed, work life will be tougher. Innovation will ONLY thrive when there are A LOT MORE Diversity of ideas first, then 'daring do' Singaporeans. Can we produce them? Can we influence them from outside the so called 'world class educational system' products? I HOPE SO!!

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