More than most developed nations, Singapore has reached a point where one of the biggest growth drivers will be through increased productivity. With an ageing population and limited space, it cannot count on large-scale manufacturing to employ thousands of people, or embark on major infrastructure works to provide an economic boost.
With global growth continuing to be weak, rising protectionism and weak investment demand and trade demand, it needs other ways to grow this export-orientated economy. The answer could come from both education, and Robotics Process Automation (RPA).
Singapore, arguably, already has one of the most educated workforces in the world. Singaporean students often top world rankings for subjects such as maths, science, and reading, and its world-class schools and universities are increasingly attracting students from developed nations. Furthermore, Singaporean parents prioritise their children’s higher education above everything else, including their own retirement, spending an average of $21,000 (US$15,623) per year on university fees (more than twice the global average)1.
Yet, despite best efforts, productivity growth over the past three years has remained flat, according to government figures2. One of the reasons behind this is the fact that many an educated Singaporean worker is in a job that they are overqualified for. In finance, for example, it is not uncommon for fresh graduates to spend the first few years of their careers conducting repetitive, rules-based tasks – checking mortgage applications, copy-pasting data, moving files and documents.
There are various reasons behind this, the main one being the out-dated, old ‘legacy’ IT systems that many banks still use that are unable to automate such simple tasks – hence the need for humans. The end result is a highly educated young graduate spending hours a day doing mundane, boring tasks that they did not spend four years at university (not to mention $21,000) to do.
This is where RPA comes in. RPA is software that mimics human interaction on a computer, essentially allowing companies to automate many of the repetitive, rules-based tasks currently carried out by thousands of white-collar workers. RPA has very low risk (no underlying code is changed), it is cheap, and efficiency and cost savings are almost immediate.
Robotics Process Automation is directly related to productivity. If you can automate a task, allowing you to complete that activity in half the time, then you have already improved productivity significantly. The resulting efficiencies and cost savings can then allow the company to expand, it will allow it to become more competitive especially against lower cost foreign rivals, and it will be able to meet demand – directly benefitting the consumer.
Whilst the jobs of those workers who have been replaced may be lost, more will be directly created but in other areas, such as sales, business development, or client servicing depending on the industry. Indirectly – and this is especially true for industries with large volumes of transactions such as finance, insurance, utilities, and telecoms – lower costs for consumers allow them to save money and spend elsewhere, providing a secondary boost for the economy.
In most cases, though, those workers ‘replaced’ by RPA will simply be able to do what they spent years studying at university for. So instead of bean counting, young accountants will be free to learn how to analyse data and provide a broader, more valuable service for their clients. HR personnel will be able to process more applicants in a shorter amount of time, allowing them to concentrate on really finding the right person for the job. The list is endless, but the benefits are the same: less repetitive, unskilled work freeing workers up to do more valuable, higher-skilled activities.
In 2017, Singapore will need to articulate a new growth mission, and this needs to come from increased productivity, leading to sustainable growth. Armed with an already well-educated workforce, the city-state is uniquely positioned to take advantage of the incredible increases in productivity that Robotics Process Automation brings.
1HSBC, Value of Education: Foundations for the future survey
2Singapore Budget, Transforming our Economy through Enterprise and Innovation. URL: http://www.singaporebudget.gov.sg/budget_2016/pb.aspx
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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