Singapore Doubles Down on Preparing for Tech Disruption

The city-state’s strength lies in its ability to identify opportunities in economic disruption. In response to the coronavirus’ negative impact on economies, it’s laid out the path forward.

Cities have suffered massively during the coronavirus, and many will have no choice but to cut budgets and lay off employees. Singapore is taking the opposite approach. With the pandemic slamming its economy, Singapore is committing some US $2 billion of a massive stimulus program to job retraining, investment in local tech firms, and closing the digital divide.

Being heavily geared to international trade and tourism, Singapore was quick to suffer from the pandemic’s economic fallout even though it largely kept a lid on the virus through March. But a surge of infections swept foreign-worker dormitories in April and May, and subsequent government orders to shut down schools and most business premises have compounded the woes. The government projects that GDP will contract by as much as 7 percent this year, which would be the worst recession in the city-state’s history. The authorities have responded with four stimulus packages since February totaling some $66 billion, or nearly 20 percent of GDP, larger proportionally than the US fiscal response to date. While much of the money goes to business loans or support to keep workers on payrolls, a significant chunk will help workers reskill themselves for the jobs of tomorrow. Such measures are examples of the forward-thinking attitude and adaptability to technological change that put Singapore in the top spot in the Oliver Wyman Forum’s Global Cities AI Readiness Index.

In its latest fiscal initiative, a $23 billion package announced on May 26, the government provided about $1.4 billion for job assistance and retraining. Those plans entail the creation of nearly 100,000 opportunities this year in three areas: 40,000 public and private-sector jobs; 25,000 traineeships hosted by companies, and government-sponsored training programs for 30,000 job seekers.

The new public-sector jobs will address both Singapore’s long-term needs – like early childhood education and healthcare – and short-term needs directly related to COVID-19, such as healthcare declaration assistants and test swabbers. Singapore’s budget statement says businesses have already committed to create 25,000 jobs in roles like computer engineers and machine operators.

Trainees receive a stipend of roughly $860 a month to help them with their job search. It’s an add-on to program introduced in February that provided approximately $360 to every Singaporean between 25 to 40 years old, and $720 to those aged 40 to 60, to cover the cost of reskilling courses.

If companies hire people from these traineeships and training programs, the government will cover 40 percent of salaries for six months for workers aged 40 and older, up to a maximum of roughly $8,500. For younger workers, the subsidy is 20 percent of salary, capped at about $4,225.

The government is also providing incentives to business to make their own digital transformation. It is offering over $210 a month for five months to encourage businesses like coffee shops and hawker centers to support e-payments, and reduce the risk of cash transmitting the coronavirus. The Finance Ministry is also encouraging digital solutions in invoicing and e-commerce, offering firms incentives of over $3,500 if they adopt these technologies. Singapore is also fostering increased digital inclusion in its communities.

The initiatives include accelerating the timeline for all secondary school students to own a digital learning device, teaching digital literacy to seniors, and providing financial support to low-income seniors for device purchases.

Jump-starting Singapore’s economy will take more than just retraining workers. The government’s February stimulus package called for some $215 million to be invested via Startup SG Equity, a facilitator of co-investments between the government and private investors that targets firms in emerging tech fields like advanced manufacturing and medical technology. Startups aren’t the only thing Singapore is investing in: It has made commitments to increase funding in education, allocating $1.4 billion a year to government-supported pre-schools by 2025, about $37 million a year to financial assistance for primary and pre-university students, and $142 million a year for higher-education scholarships.

Singapore’s coordinated  response to the pandemic shows its possible to address today’s urgent economic needs while still preparing for tomorrow’s technological disruption. That should serve as a lesson for other cities and nations.