Here's why upgrading human capital will be difficult for Singapore

Proposed efforts could come at the expense of private sector participation.

The Committee on the Future Economy (CFE) has recently pushed for Singapore to seek to enable citizens to acquire and utilise deep skills to stay relevant in the rapidly changing world. CFE’s report asserted that workers need to develop deep skills to remain relevant amid the rapid pace of technological development. The approach the CFE recommended is two-fold. First is the focus on acquiring and using knowledge and skills throughout our lives as technologies and jobs are likely to change throughout our lifetimes. Second is to enable locals to acquire deeper skills to create value and ensure that they can utilise their skills effectively on the job as technology replaces routine tasks.

BMI research has commented on the difficulties that may be faced in implementing this complex though essential effort moving forward.

“While we note that the proposed efforts to raise the quality of human capital are commendable and necessary, these will be difficult to implement. The changes require a considerable shift in mindset towards one of constant learning and we believe that this will present the biggest challenge to the government,” BMI said.

Additionally, there are concerns that key role of the government in spearheading these efforts could come at the expense of private sector participation and foster a spirit of dependence on the part of the population. However, if the programs are implemented they will definitely help lift the quality of human capital in Singapore, and accordingly, GDP growth. BMI forecasts remain conservative in their expectations.

“Given the difficulties in raising the level of human capital, we maintain our forecast for long -term real GDP growth to average 2.7% over the next decade (compared to 5.2% over the last decade),” BMI said.

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