Mr Speaker, Sir

I rise in support of the motion standing in the name of Mr Davinder Singh. The President in his address to open the Second Session of this Parliament had highlighted Government’s effort to promote lifelong learning and to enhance our people’s skills and capability under the Manpower 21 plan. Several Hon Members have also spoken in support of the Manpower 21 plan. I thank them for their endorsements and support of the initiatives contained in the Manpower 21 Report.

The latest issue of Business Week (18 Oct) contained a Special Report entitled "Learning to Lead". It described how an energy company in the US, Conoco Inc, coped with a 1998 downturn in oil price and surplus capacity. The usual approach would have been to cut spending and close plants, which means retrenching staff. Instead, the CEO made an unusual decision. He decided to make a major investment in the company’s managers. He approved a new comprehensive leadership-development programme for his senior executives. The CEO explained "Even though oil was at $10, it was the right decision. You’re going to be successful in the long term if you have good people". That was why in the worst of the times, Conoco was still investing in training its people to provide good leadership. Conoco was not alone in taking this approach. According to the Business Week Report, "Corporate America has concluded that investing in people is the way ahead".

This, in fact, is what M21 is all about. It set out a strategy or blueprint for Government and employers to invest in our people as a means for Singapore to stay ahead. It provides a framework for all Singaporean workers to upgrade their skills, knowledge and capabilities so as to stay relevant and remain employable.

The recent economic recession, though rather brief, was a timely reminder of our economy’s vulnerability and how easily tens of thousands of workers can be made redundant. Now that the crisis is largely over and the Singapore economy seemed to be well on the road to recovery, it is indeed timely for us to reassess our situation.

We can sit back and simply ride this wave of recovery by doing more or less what we were doing before the crisis. The danger of this attitude is that with globalization, we would be exposed to increasing competition and our economic space will begin to shrink. We have to seek out new opportunities and adopt a new paradigm for growth and prosperity. We should use the recent experience to plan for the future. While we cannot determine precisely what the future holds for us, we can safely assume that the 1998 recession would not be the last nor the worst.

In the pre crisis days, economic growth resulted in the creation of as many as 120,000 jobs a year. Singaporeans were in fact spoilt for choice. Companies rushed to carry out "green-harvesting" exercises. Final year students in Universities were offered jobs before graduating. Production workers could walk next door to another factory and get a $50 pay increase. Many jobs had to be filled by foreign workers, due to a sheer shortage of Singaporeans. In some areas, it was a shortage of suitably skilled workers; but in many other areas, a shortage of workers willing to take on the less attractive and less pleasant jobs.

In the post crisis days, we cannot expect the labour market to return to the condition prevailing in 1995 to 1997. If our GDP grows at the target rate of 5%, and at least half of the growth comes from productivity growth, the balance to come from an expansion of labour supply, will yield a net creation of around 60,000 jobs. This means that we must be prepared for a lower level of job creation. We will have to ask ourselves what jobs will support economic growth. As we move towards a knowledge based economy, the jobs are likely to be transformed into knowledge intensive jobs. What this means is that while industries will need fewer people, these workers will be of much higher caliber, able to perform more valuable jobs and earn better wages. Singaporeans must begin to prepare for these changes now.

What would be the developments affecting jobs in the future? We think there are three developments that we must look out and be prepared for. These developments will form the backdrop and provide the challenges for us in implementing Manpower 21.

The first is the technology based workplace environment. There is no question that technology will reshape not only the electronic and manufacturing based industries. Every other industry and business will be affected by the use of technology, IT and e-commerce to improve business efficiency and customer reach.

For example, IT is progressively being applied in sectors such as retail, banking and insurance to dramatically expand delivery channels and service. In education, the use of intranet and internet learning methods will bring a whole host of education materials to the fingertips of students. Retail sales staff, bank staff, insurance salesmen, as well as teachers, will all need to be prepared for such changes. Increasingly, our workers have to be IT savvy, attuned to the latest technology and comfortable with the demands of the new jobs being created.

Even in traditional fields such as construction, the use of technology will result in sizeable improvements in productivity and reduction in the need for low skilled foreign workers. Next week, my Ministry will launch the Construction 21 Report and announce new measures to transform the construction industry.

While our new school leavers and graduates of polytechnics and universities will be well prepared for these changes and demands of new jobs, we must not forget the older workers who may not have the same skills and are in many cases hampered by their lower education. The concept of "lifelong learning" put forward by M21 is designed to help matured workers learn new skills to keep up with the changing job requirements. While younger entrants to the workforce will be better equipped, their stock of knowledge and skills will rapidly get outdated in the face of technological progress. So even today’s well educated young Singaporeans must adopt a new mindset and embrace lifelong learning to stay employable.

The second major development is the accelerated pace of rise and fall of industries and companies. This is the result of an unprecedented pace of technological advances and applications. To succeed and remain profitable, companies are constantly seeking new products and services. Companies are always looking out for better, more productive and lower cost opportunities. Those which cannot keep up with the pace of change will soon find themselves shut out of the market. In response to this trend, restructuring will become part and parcel of business growth and survival. When companies reorganize to concentrate on their core activities or to venture into new areas, very frequently, there will be employment disruption and redundancy. So while the demand for a people with knowledge and capabilities in growth areas will increase, other workers may find their skills in less demand.

Since 1992, the manufacturing share of employment has declined from 29% to 21% in 1998. While demand for higher skilled technicians, engineers, computer systems analysts and product R&D workers will still grow, the demand for production and assembly workers is expected to decline. Our approach to helping these workers is to equip them with new skills and re-deploy them to other economic sectors, such as services industries.

Other growth sectors which will continue to create jobs for our people include the banking, finance, communication, broadcasting and IT. In the IT sector alone, the current pool of 33,000 IT professionals is expected to grow at about 10% per year for another several years.

To prepare for manpower needs in strategic sectors of high growth and high value, my Ministry is planning a Strategic Manpower Conversion Programme. This is a programme whereby workers are encouraged to undergo short "conversion" courses to acquire new knowledge and skills for careers in these growth areas. For a start, my Ministry is working with NCB on a programme to convert non-IT trained workers for higher value added jobs in the growing IT sector. The scheme will be implemented early next year. We will use the experience gained from the pilot project in the IT sector and extend it to other new growth areas so that Singaporeans be better equipped to take on these new jobs.

The third development is the demand for flexibility, creativity and thinking skills and multi-skilled workers. Gone are the days when a production worker focuses on a single task on the assembly line. In a typical hi-tech manufacturing plant, be it in petrochemicals, semiconductors or food manufacturing, most of the production work is done by machines, operated by a few highly skilled workers. These workers will have to conduct quality inspection and trouble-shooting and even maintenance.

Even in traditional jobs such as cleaners, healthcare aides and chambermaids, there is scope to raise their skills and productivity by widening the scope of such jobs through proper training. The result is to enhance the image and dignity of the jobs. This will help us to re-deploy some of our workers who will be made redundant as the manufacturing sector reduces its labour requirements.

To motivate workers to undergo upgrading, MOM is developing the National Skills Recognition System (NSRS). The NSRS is a framework that will develop industry skills standards in the manufacturing and services sectors and accord national recognition to training that meets these standards. The NSRS will enable matured workers to earn credit for what they have learnt, and provide an additional mechanism for employers to assess the workers' skills. This system is designed to be accessible to all workers, regardless of their basic education. It will provide all workers with opportunities for skills certification to a nationally recognized standard. This will help facilitate the gradual transition of the lower skilled segments of our workforce into the knowledge economy and encourage them to also pursue lifelong learning.

Apart from promoting lifelong learning, training and retraining, we must also constantly examine our employment market to look for areas to improve and to enhance our resilience and competitiveness. For instance, we must refine our wage system to enable companies to be more responsive to rapidly changing business conditions in good and bad times. Hence, employers should quickly adopt the Monthly Variable Payment (MVP) system. The MVP will give companies an additional measure to adjust cost without having to retrench workers or resort to more painful wage cuts.

We should also rationalize some of our employees’ benefit system, such as the introduction of a co-pay principle for medical care. This was recommended by a Tripartite Committee nearly 3 years ago but progress has been slow. Can we afford further delays in implementing a measure which will result in better allocation of health care benefits across the board?

There is also the sacred cow of retrenchment benefits. A ceiling of 25 years service was introduced when the retirement age was raised to 62 years last year. However, as I mentioned earlier, the pace of change will cause companies to restructure much more frequently in future. If our retrenchment benefits are perceived by investors to be too generous and a hindrance to corporate restructuring, we may lose our attractiveness to such investors. Can we afford to pass up such opportunities because we want to preserve the present system of protecting our workers from unexpected retrenchment? Or should we recall that retrenchment benefits were meant to help such workers to tide over the period during which they are unemployed and seeking new jobs.

These are all very sensitive issues with tremendous impact on the state of industrial relations. But we must start to discuss these issues and build up a tripartite consensus. We have already started to do so with regards to another issue concerning union representation of executives. In the years ahead, we must also find equitable and mutually agreeable solutions to these issues so that they will not hinder the effort to create jobs for our people.

The new millennium will present many new opportunities to Singapore. These are opportunities which we must seize and ride on to bring us into the next phase of growth. If we are ill prepared, we will miss out on these opportunities and slide down the competitive ladder. This will mean higher unemployment, insufficient and low value-added jobs, low wages and a lower standard of living.

The transition to the new economy involves every individual. It is not confined to the IT or technology-savvy, or the highly educated. Rather, it requires the commitment, determination and effort of all Singaporeans at every level of the workforce. It requires Singaporeans to be willing to learn, to try new things, to be innovative. Whether professionals or production workers, employers or employees, the key to our ability to earn good living in the future will rest on our ability to acquire new knowledge and skills and to use these to add value to the economic effort. Individuals can choose to be overwhelmed by the changes and languish by the side, or take a pro-active role to prepare for the future and ride on its many opportunities.

While the Government will provide the overall framework, the people and the private sector have to take the lead in seizing the various growth and learning opportunities. Employers and workers must be agile, flexible and open to various possibilities in this fast moving knowledge based economy. The M21 strategy and programmes represent a blueprint or road map. Workers, employers and Government must travel along this road hand-in-hand so that we can arrive together at our common destination. The road is not straight and smooth. It is winding, runs uphill with many obstacles along the way. We must help each other to navigate the climb and overcome the hazards along the way. Government, working with employers can invest, subsidize, motivate and encourage workers to upgrade their skills. Singaporeans must also make personal commitment to tap these opportunities to upgrade. Every worker must adopt the "lifelong learning" credo and make continuing effort to ensure his or her employability. I urge all employers and workers to join us in this exciting and rewarding journey to transform ourselves into a globally competitive workforce.

Many Members have made suggestions and given good comments on the M21. I do not propose to go into the details but I would like to assure Hon Members that all their suggestions and comments will be studied and given due consideration when my Ministry implements the recommendations of the Manpower 21 Committee.

I support the Motion.