How Singapore drives a continued focus on business and the workforce

Forward-looking enterprises assess emerging industry trends and redesign their businesses and job roles to navigate these trends effectively. They also offer more training opportunities to help employees upskill while providing strong career growth opportunities to attract, retain and develop their workers. The one-year extension of the SkillsFuture Enterprise Credit scheme, announced in Budget 2020 and designed to support business and workforce transformation, will allow small- and medium-sized enterprises (SMEs) more time to embark on and complete these efforts with confidence. However, the impact may be limited due to the S$10,000 quantum in credits and the short-term nature of the extension. Hence, a top-up of the SkillsFuture Enterprise Credits, together with an expansion of the transformation programs it can support, can be helpful. More clarity on how employers will be further incentivized to redesign jobs, provide better training and develop stronger career health for employees can also be helpful.

Emerging technologies like generative AI (GenAI) could be a game-changing solution to enhance productivity and drive technological transformation. Unlike prior industrial revolutions that mainly affected blue-collared workers involved in operational and labor-intensive work, the jobs and livelihoods of professionals, managers and executives may be most impacted by the green and digital economy. Digital skills (such as GenAI and data analytics) as well as green skills (such as carbon footprint management and sustainable manufacturing) are expected to be in demand at scale and at speed. Therefore, measures that further support workforce upskilling in digital and green skills through Budget 2024 would be welcome.

It is heartening to see measures that encourage mid-career Singaporeans to take up a second diploma and ITE graduates to upgrade to a diploma. Having said that, microlearning and microcredentials should still have a place in the national upskilling strategy. Microlearning, often virtual and asynchronous in nature, became popular during the pandemic as credible upskilling pathways for individuals juggling work and personal commitments. Employers may also be more inclined to encourage their employees to embark on microlearning, compared with full-time courses. Hence, more efforts to enable Singaporeans to leverage virtual and microlearning would be welcome.

Spurring business growth and innovation

Multinational enterprises and local SMEs are the bedrock of Singapore’s economy. Growing vibrant and competitive SMEs while continuing to attract foreign direct investments are symbiotic efforts that must go hand in hand.

Singapore’s well-established infrastructure, talent pool, stable regulatory, financial and tax systems, and geographical hub status have long been recognized as key draws for investors. The implementation of a global minimum tax under BEPS 2.0 Pillar 2 may dampen the use of incentives to anchor investments in Singapore. Having said that, the newly announced Refundable Investment Credit (RIC) can be a credible countermeasure.

The RIC is a tax credit with a refundable cash feature designed to spur investments by businesses in high-value and substantive economic activities. Examples include new productive capacity in manufacturing plants, expanding or establishing the scope of activities in digital services and establishing the headquarters’s activities in Singapore. The RIC will complement existing efforts that promote R&D and innovation and further support Singapore’s ambition to be a global R&D hub.

Additionally, other measures, such as the comprehensively packaged Enterprise Support Package and the enhanced Partnerships for Capability Transformation Scheme, will further support local enterprises in deepening their capabilities to compete globally. For SMEs, the potential savings of S$40,000 from the 50% corporate income tax rebate for the year of assessment 2024 could also free up capital to be redirected toward strategic areas for innovation and growth.

Implementation is key

Importantly, the effectiveness of these initiatives depends on their uptake and proper utilization by businesses and individuals. To that end, these initiatives should be easily accessible to the targeted audience and flexible in accommodating reasonable differences across businesses and individuals within the scope parameters. Adequate communication and outreach efforts are needed as misinformation, the lack of awareness or administrative hurdles could potentially limit the effectiveness of these well-intentioned measures.

If well-executed, Budget 2024 and other measures built upon it will go a long way in fueling Singapore’s journey toward a future-ready, resilient and inclusive economy.