Growth areas are high-tech manufacturing involving Industrial Internet of Things.
The Committee on the Future Economy has proposed that Singapore manufacturing sector should still contribute 20% of economic output over the medium term.
In a report, CFE stressed that manufacturing and services are the twin pillars supporting Singapore’s diversified economy. In 2016, the manufacturing sector accounted for around 20% of GDP and 14% of total employment in Singapore.Over the years, it has also enjoyed strong productivity growth. Between 2009 and 2016, real productivity, as measured by real value added (VA) per actual hour worked, in the manufacturing sector grew by 6.2% p.a., higher than the growth in the overall economy (2.5% p.a.) and the services sector (2.1% p.a.).
CFE said apart from being a source of growth and good jobs, the manufacturing sector also buffers Singapore against the vagaries of the global economy by diversifying our production base and export markets. Such a strategy of diversification is important to ensure that Singapore’s economy remains broad-based and resilient over the long term.
"The manufacturing sector also anchors high-value and complex activities in Singapore which provide skilled jobs for Singaporeans. It preserves and grows competitive capabilities in the economy, including technical and engineering skills that will support future innovations. With the growth in capabilities, the manufacturing sector will also improve its labour and land productivity, allowing us to optimise our precious resources," CFE explained.
In targeting advanced manufacturing activities in Singapore, CFE said it should be recognised that the complexion of manufacturing is fast-changing since it increasingly encapsulates a value chain of activities including services such as design, R&D, logistics, marketing and after-sales services.
"In particular, the servicisation of manufacturing has encouraged manufacturers to incorporate services elements into their businesses in order to differentiate their products and enhance their competitiveness. At the same time, manufacturers are likely to continue to outsource activities to services sectors such as business services, thereby strengthening their linkages with these sectors and benefiting the wider manufacturing ecosystem," the committee stated.
It furthered, "Our base of high-value manufacturing and services activities provides a strong value proposition for servicised manufacturers that operate across the value-chain, from knowledge-intensive R&D and design to high-tech manufacturing production and post-production services. We will continue to actively encourage the growth of areas that sit at the confluence of high-tech manufacturing and high-end services, such as advanced manufacturing and the Industrial Internet of Things (IIoT)."
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