Question
Mr Liang Eng Hwa: To ask the Minister for Trade and Industry (a) how has the rise in the number of factoryless goods producing firms changed Singapore's economic competitiveness and its capacity to export; and (b) what are the implications to job creation and prospects as well as overall economic value-add in Singapore.
Oral Answer (to be attributed to Senior Minister of State for Trade and Industry Mr Chee Hong Tat)
- Singapore’s manufacturing
ecosystem has become more diverse over the years, with a shift towards
higher-value activities. This includes a rise in the number of Factoryless
Goods Producing Firms (FGPFs). These are firms that undertake pre-production
activities such as R&D and product design in Singapore, but outsource the
physical production to another company, which could be located in Singapore or
overseas.
- FGPFs contribute to our
economy in several ways. First, due to the high-value nature of their
activities in Singapore, FGPFs contributed to 5.2% of the value-added of the
manufacturing sector in 2016, even though they accounted for around 0.5% of
manufacturing firms. They also provide business to firms in supporting
industries that are engaged in logistics, sales and marketing.
- Second,
FGPFs generate skilled and well-paying jobs. In 2016, FGPFs accounted for
around 2,700 jobs in the manufacturing sector. Around two-thirds of these jobs
were filled by Singaporeans. About 80% of the 2,700 jobs were skilled jobs that
provide higher salaries for the workers.
- Third,
FGPFs conduct R&D with local contract manufacturers and equipment suppliers
to jointly develop advanced production processes. Such partnerships help to
strengthen the capabilities and competitiveness of our manufacturing
sector.
- Manufacturing remains an important part of Singapore's economy. The Government will continue to strengthen and upgrade our manufacturing capabilities by attracting investments in both production and production-related services, and helping Singapore companies to raise their productivity and move into higher-value manufacturing activities.