Singapore’s full-year growth for 2017 took a positive turn when it hit 3.5%, up from an earlier estimate of 2% to 3% by the Ministry of Trade and Industry. Nevertheless, the challenges posed to globalisation appear to continue throughout 2018. Under the Trump administration, the United States (US) has been reviewing its trade agreements, particularly those with countries that have a large trade surplus with the US.


It was against this backdrop that the ISCA Pre-Budget Roundtable 2018 was held on January 9, bringing together leaders of trade bodies and accounting firms to discuss and provide recommendations on the Singapore Budget 2018. Held for the ninth year running, the annual Roundtable serves as an invaluable platform to gather the views and insights of business leaders on how Singapore can advance its future.


Liang Eng Hwa, Chairman, Government Parliamentary Committee for Finance and Trade & Industry, and Co-Chair of the Roundtable, said, “Budget 2018 will continue its focus on transforming the economy, future-skilling the workforce and enhancing overall employability. The improved economic environment presents a more conducive environment.”


ISCA President Dr Gerard Ee, who co-chaired the Roundtable with Mr Liang, noted, “Disruptive technologies have changed the face of businesses, and continue to re-shape the business landscape. Technologies such as blockchain and artificial intelligence (AI) have started to catch on in mainstream markets, threatening to destroy existing business models while creating new ones.” Dr Ee posed the question of how Singapore companies can embrace the digital economy, in view of Singapore’s goal to become a Smart Nation.


Panellists (seated, from left) Max Loh, Managing Partner, Asean & Singapore, Ernst & Young LLP; Piyush Gupta, Chairman, The Association of Banks in Singapore; Co-Chairs Dr Gerard Ee, President, ISCA, and Liang Eng Hwa, Chairman, Government Parliamentary Committee, Finance and Trade & Industry; Ho Meng Kit, Chief Executive Officer, Singapore Business Federation; Kon Yin Tong, Managing Partner, Foo Kon Tan LLP; (standing, from left) Chris Woo, Head of Tax, PwC Singapore; Vincent Tan, President, Restaurants Association of Singapore; Douglas Foo, President, Singapore Manufacturing Federation; Prof Sum Yee Loong, Board Member, Singapore Institute of Accredited Tax Professionals; Koh Yeong-Kheng, Honorary Treasurer, Association of Small & Medium Enterprises; Saw Ken Wye, Chairman, SGTech



The Industry Transformation Maps (ITMs) are part of the government’s approach to transform the economy. Every ITM is tailored for the specific needs of each industry and coordinated by an economic agency. To date, 17 ITMs have been launched, and the remaining six ITMs will be launched progressively by March this year – bringing to a total 23 ITMs which will cover 80% of the Singapore economy.


The panellists felt that more private-public collaboration would be needed on the ITMs, so that they would be more connected to business realities. Moreover, the perception among some of the trade associations and chambers (TACs) has been that the ITMs are developed for larger companies in mind. Yet there is a “long tail” of small and medium-sized enterprises (SMEs) in each industry which may not perform as well. The key performance indicators set for these SMEs must similarly be made more relevant to their business circumstances.


Strong TACs can better engage with industries on the ITMs, which would then lead to better outcomes. Naturally, some TACs are better resourced than others, so there is a need to further identify and build up capabilities in TACs.


Given the phenomenon of sector convergence in today’s world, there is a need for greater horizontal linkages between the ITMs. For instance, it is hard to compartmentalise a corporation like Google into the purely technology sector, since the use of technology inevitably cuts across all industries.


Given the fast pace of change that Singapore faces, ITMs should not be a one-time roadmap, but should be adaptable and have the capacity to keep evolving.


One panellist shared that while companies can save on manpower by tapping on technology, they are sometimes hampered by government tender project requirements which prescribe a higher required headcount that assumes the technology solution is not applied. The goals and requirements set across government agencies would need to be better coordinated, to prevent such a situation of mismatched expectations.


Mr Liang and Dr Ee co-chaired the ISCA Pre-Budget Roundtable 2018



One panellist cited studies conducted by his TAC which showed that the main barriers to greater technology adoption by SMEs are a lack of strategic know-how about going digital, and the lack of tech-savvy among their employees. It was proposed that young people should be incentivised to work in some of these SMEs, as the best means of injecting digital know-how into them.


There is a perception that the speed of change at the government level is slow because there is an over-emphasis on reaching consensus among its various agencies. In particular, when launching technological initiatives, the government should make even bolder moves. To illustrate this, one panellist cited TradeNet, launched in 1989, as perhaps the most successful technology initiative of the Singapore government. TradeNet is Singapore’s National Single Window for trade declaration that allows various parties from the public and private sectors to exchange trade information electronically. Paper documents required by 20 government agencies were eliminated almost overnight, improving efficiency.


Another panellist urged the government to leverage Singapore’s city-state characteristics further in the field of data. For instance, the same set of national data is replicated among different agencies and bodies in Singapore, even though Singapore is such a small country. There would be massive productivity savings if there is a common data-gathering platform. The government could explore some iconic national projects to move the needle in this regard.


Fintech is an area in which Singapore wants to continue developing its capabilities, so as to be at the forefront globally. The fintech boom in countries like China is sometimes assumed to be a groundswell phenomenon. However, it was noted at the Roundtable that there are effectively only two companies in China serving the fintech boom there – Tencent and Alibaba. As a lesson for Singapore, it was proposed that perhaps some local “queen bees” are needed to come up with a “killer product” that can move the needle for fintech here.



There was unanimous agreement among the panellists that support schemes for research and development (R&D) are too focused on quantum-leap type of research. Under these schemes, such as the Inland Revenue Authority of Singapore’s, the threshold of what counts as R&D is very high, understandably so, given the large amounts of money involved. But if the aim is to spur innovation on a large scale in the country, this whole notion of R&D, and the accompanying criteria for awarding funding or other support, needs to be re-evaluated. To cite the example of the banking industry, the key agenda for innovation in the banking sector currently is about fundamentally digitalising banking, but none of these processes would qualify for R&D tax and other benefits. It was suggested that an incremental rather than a quantum-leap approach be adopted. Businesses are mostly involved in product and process enhancements/developments rather than R&D, so a scheme addressing the former may be more suited to business needs.


There was clearly a desire among some panellists for the return of the Productivity and Innovation Credit (PIC) scheme. While acknowledging that the scheme was discontinued due to cases of abuse, some panellists proposed that selected aspects of the old PIC scheme be brought back, such as for the purchase of computers, which would be the crucial first step in getting small/micro-companies run by pen-and-paper methods to digitalise.


While technology is indeed a national agenda, the payback for investments in it would not happen so quickly, which could make it hard to justify the use of ever more government incentives. Some panellists felt that Singapore should create an eco-system to encourage more private capital (angel investors, seed funding, fintech investors) to invest in technology, by making it easier and more attractive for private investors to do so. This would also help Singapore to continue being at the forefront of fintech globally. Singapore could look seriously at establishing a private exchange for investors to buy the shares of non-listed companies.



One panellist opined that Singaporeans should be thinking about the future of jobs (as opposed to jobs of the future). Rather than focusing on new job opportunities, Singapore should rethink the whole idea of work, how students could be more entrepreneurial, and how the gig economy will impact workers. This also calls for students to develop “horizontal skills” such as resilience, risk taking, the ability to exercise critical thinking and to learn new skills. As such, experimentation and entrepreneurship would need to start in schools. All schools should encourage students to do subjects or co-curricular activities they like to do and not what the school wants them to do. They should be encouraged not to fear failure, in the spirit of experimentation.


Job displacement will not be limited to those relating to repetitive tasks. With AI, no job in the economy is immune to digital disruption. Therefore, for students, soft skills are just as important as skills in their core training as that presents the difference between robo-advisors – already used in the finance industry – and the human worker.


It was suggested that all polytechnic and university graduates should be made to take up internships. At the moment, this is generally required only for courses related to the professions, like accountancy and engineering. The government could subsidise half the amount of the student’s allowance as an incentive for companies to provide such internship schemes. This would also have the effect of injecting young workers into SMEs to help with their digitalisation journey.



When internationalising, it is generally advised that companies should recruit local talent in those markets as far as possible. In some cases however, Singaporean staff – especially those in critical or supervisorial positions – may be needed and indeed preferred. In the food and beverage industry for example, a Singaporean chef may be needed in the overseas restaurant outlet for reasons of branding and, at least in the initial stages, quality control. Therefore, any scheme that seeks to help companies internationalise should take into consideration the different manpower needs of different sectors.


For one panellist, the real problem hindering internationalisation for companies is the question of whom they can send overseas to take charge of their operations there. The challenge is compounded if the most suitable staff for such a purpose are parents with school-going children, who would usually insist on an allowance for their children to attend international schools. The government could consider a way to transfer the subsidy, which Singaporean school students already receive if they attend Singapore schools, to be used against the fees of international schools overseas in cases where parents are posted for long-term overseas work assignments. In this way, the government does not have to expend additional fiscal resources to support companies and their staff in their internationalisation ambitions.


With digitalisation, internationalisation can now take place from one’s garage, rather than be limited to the traditional way of setting up overseas depots. In this regard, Singapore should create an online store like China’s Taobao. The sentiment is that many online shoppers around the world would be attracted to see what Singapore sells, given the premium that the Singapore brand carries.


A number of panellists felt that Singapore should take the opportunity as ASEAN Chair for the year 2018 to further liberalise trade in the region, for instance, to spearhead the expeditious clearance of goods within Southeast Asia so that companies, particularly SMEs, can better take advantage of free trade agreements.


Singapore companies tend to look to Asia when internationalising, but one panellist felt they could be encouraged to look further abroad to newer markets like Latin America and Africa. Some were of the opinion that the Asian market, including China, is already crowded.



To help spur internationalisation among Singapore businesses, panellists raised some tax measures (Table 1) for consideration.




Other issues raised by the panellists included the issue of low birth rates in Singapore, and how that could pose challenges for Singapore’s future talent pool and for business, given the shrinking market size. There was a sense among some panellists that the government should revisit the population growth debate as soon as it is politically palatable to do so.


While noting the recent improvements in Singapore’s economic growth, the Roundtable panellists were keenly aware of the need for Singapore businesses to keep innovating, and to internationalise. To this end, they made recommendations for the government’s consideration, as well as for further strengthening the ITMs and preparing students for future jobs and skills.


Dr Ee presented a token of appreciation to Mr Liang for co-chairing the Roundtable





“Singapore is not leveraging its city-state characteristics in the field of data. The same data is replicated between different agencies and bodies (for example, national utilities). If we have a standard data-gathering platform, there will be massive productivity savings. Singapore should find four or five national iconic projects to move the needle for the country.” Piyush Gupta, Chairman, The Association of Banks in Singapore


“What is the future of manufacturing if we do not have the pipeline of the young to join the industry? There is a need for a new pipeline of new talents who would like to join the manufacturing industry. Without that, we will not have the new people and new interest with the coming transformation.” Douglas Foo, President, Singapore Manufacturing Federation


“Very few entities in Singapore are able to do research. We should be focusing instead on product development or enhancement. So, I would suggest that we rename the R&D tax incentive scheme. Let’s have a double deduction for product development or enhancement. That would be a lot more useful and industry-friendly.” Prof Sum Yee Loong, Board Member, Singapore Institute of Accredited Tax Professionals


“We are facing a manpower crunch in the restaurant sector, so we need to cut down on the processes. Many restaurants are now using a self-ordering iPad system. Digital payments are starting to be rolled out too. Everyone is moving in this direction. Those who are not willing to change will be left behind, and may eventually have to leave the industry.” Vincent Tan, President, Restaurants Association of Singapore





“Singapore should take the opportunity as ASEAN Chair for 2018 to spearhead the expediting of the clearance of goods within Southeast Asia, so that companies, particularly SMEs, can better take advantage of free trade and trade facilitation agreements.” Chris Woo, Head of Tax, PwC Singapore


“SMEs recognise the need to go overseas, but face the challenge of whom to send to take charge of their overseas operations. The most suitable staff are often parents with school-going children who usually insist on an allowance for their children to attend international schools. (To help defray such costs, the government could consider a way to transfer the education subsidy that these children would have enjoyed had they remained in Singapore.) This will encourage more people to go overseas.” Koh Yeong-Kheng, Honorary Treasurer, Association of Small & Medium Enterprises





“The larger companies may have a better understanding of the ITMs, but there is a long tail of SMEs in each industry which are not as innovative or productive. The government, trade associations and chambers must be able to reach out to these SMEs through the ITMs in an appealing approach that is relevant for these companies.” Ho Meng Kit, Chief Executive Officer, Singapore Business Federation





“Skills are transitory and temporary. If we can focus instead on competencies that will last a lifetime, in the face of an ever-changing economy and skills displacement, that will be good. It will help with fostering innovation as well.” Kon Yin Tong, Managing Partner, Foo Kon Tan LLP


“While we rightfully focus on industry transformation, we must be mindful of ongoing sector convergence. As we build up skills and capabilities, and drive productivity and innovation within industries, we must also promulgate sector-agnostic skills such as team leadership, problem solving and digital literacy. The mastery of both broad and deep skills alleviates structural unemployment and ensures the relevance of our workforce vis-a-vis the jobs of the future”. Max Loh, Managing Partner, Asean & Singapore, Ernst & Young LLP


“The mid-career switch presents an interesting challenge. With artificial intelligence, even skilled jobs can be replaced. We really need to think carefully about what kind of workers we want in society.” Saw Ken Wye, Chairman, SGTech



Loke Hoe Yeong is Manager, Insights & Intelligence, and Vernice Neo is Executive, Insights & Intelligence. The writers wish to thank Yap Lu Ling, Manager, Policy & Strategic Planning, and Yeo Shu Wen, Executive, Insights & Intelligence for their assistance in this article. They are all from ISCA.