The changing business landscape of Singapore
In winter, butterflies migrate, or die in the cold.
2012 is Singapore's winter of discontent. And here is the common grouse of all: Singapore cannot sustain too large a population. And to me, 5m is far too many. I think it would not be difficult to agree with this statement. Employers, who are also people, would not find it difficult to agree with this statement.
So like the butterfly, our nation, employers and people have to either move with the seasons… or die in the cold.
Whatever line of business you're engaged in, it's time to re-look the value chain and find out how to re-allocate your resources.
Before that let's have an appreciation of the situation. Have a look at the following graph:
Over the past 8 years, we have achieved a 54% growth in GDP. In tandem, our labour force has also increased. Yet, with such a strong labour force, our GDP did not manage to grow even higher - this means, somewhere along the line, was a loss in productivity.
What about the next 8 years then? Here are two scenarios.
In this first scenario, we must lower our foreign labour in take. All else being equal, our GDP growth would dwindle to below 2% over 8 years. So what, you might ask. Without sufficient growth, the country will experience increased unemployment, lack of funds to keep public services moving and less opportunities to do more. Everyone suffers.
In scenario two, we'll aim for a healthy growth of about 3-4%. Still remarkably lower than the 50+% we've experienced the past 8 years, but enough to maintain a vibrant economy and for us to keep our jobs. Without the option of capitalising on growing labour, what must businesses do?
Move like the butterfly. Transform.
There are technologies and processes abound that businesses can invest and capitalise on. Broadly speaking, there is a pressing need to Increase productivity, increase profits and redistribute them to deserving employees to convince them to stay. The greatest difficulty rests on the shoulders of the SMEs, but it is also small companies that are nimble enough react quickly to changing economical landscapes.
Can this be achieved? Will employers turn their businesses around, help their staff become more productivity, reduce expenditure and invest in the welfare and careers of each employee?
We shall find out when Spring comes about...