Speech by SMS Koh Poh Koon In Parliament at the Debate On President’s Address

​SPEECH BY SENIOR MINISTER OF STATE FOR MINISTRY OF TRADE AND INDUSTRY KOH POH KOON IN PARLIAMENT AT THE DEBATE ON PRESIDENT’S ADDRESS, 15 MAY 2018

MAKING ITMs REAL AND IMPACTFUL

Rapid technological advancements are allowing more tasks to be automated.

1.                       Mr Speaker, we are living through an era of rapid technological progress, which is likely to make automation much more pervasive. Technologies are now being applied to areas which we usually regard as being carried out by people. Just last week[1], Google showcased an Artificial Intelligence (AI) system which is able to make appointments over the phone. Those of us who watched the video saw how the AI interacted with a person smoothly, without a script. Amazon has also recently launched its checkout-free store in Seattle in America, and is looking to learn from this and expand further. Here in Singapore, some of us would have seen the automated tray-clearing robots being trialled in coffee shops and hawker centres, or the self-driving vehicles making their way around parts of one-north. As automation technologies continue to develop, they will increasingly be able to perform tasks which require more complex skills – some examples which are already taking place include the use of automation in detecting fraud by DBS Bank and in generating simple news reports and tweets, such as those covering financial or sports results.

Change can create uncertainty for businesses and workers who fear being left behind but it also presents new and exciting opportunities.

2.                       So whether one is a blue or white collar worker, these changes can make us feel vulnerable to being replaced by technology. There is a sense that these changes are beyond our full understanding and control, leading to fear and anxiety regarding an uncertain future. This is understandable and is to be expected. This might lead some to resist these technologies, feeling that society should push back against automation to protect jobs. Some may wonder why the Government is actively supporting the process of economic transformation and change, instead of protecting existing jobs. Such worries go beyond workers, with businesses fretting about disruption of their business models, students worrying about whether their skills will remain relevant, and older people wondering how they will cope in a society that requires more and more familiarity with technology. I can empathise with such fears and anxieties. I have also seen this in patients facing an uncertain prognosis. In these situations, I find that seeing the situation in the right context is often helpful to reducing anxieties and galvanise actions.    

3.                       Our companies and workers too, must see the challenges in the right context and understand that while technological disruptions can create uncertainty for businesses and workers who fear being left behind, they also present new and exciting opportunities. Let me share 3 perspectives for us to consider (as consumers, workers and business owners):

a.      As consumers. Many of the technology evolutions are driven by consumer needs/demands. Every worker is also ultimately, a consumer. As consumers, many of these changes do improve our lives, with better and faster products and services, as well as more convenient ways of doing things. For example, e-commerce provides access to a much wider range of products and services available from the comfort and convenience of our own homes.

b.      As workers, automating away tedious and strenuous jobs will make our work lives more productive, engaging and safer. Digitalising work processes will also allow us to be more effective and productive at our jobs while allowing work arrangements to be more flexible such as working from home, leaving us more time to pursue other goals or spend time with our families. With automation, we will be less constrained by our physical limitations even with an aging workforce, as work-related experience will count more than mere physical strength. As our labour force growth slows in the next decade, productivity growth will also allow our economic growth to continue and provide us with more resources as a society, both for ourselves and to care for those with less.

c.       As business owners, many understand that disruption from technology and automation is a global challenge. With the interconnected world we live in, we are not in a position to prevent or slow down technological change. Companies understand that if we do not disrupt ourselves, someone else will do so. Instead of wondering how we can protect ourselves from change, we should instead push to be at the forefront of change, even as we work to mitigate its negative impact on vulnerable groups.

We are in a strong position to ride this wave of change and create an innovation-driven economy.

4.                       Despite the fear and uncertainty, I can confidently say that we are in a strong position to ride this wave of change and create an innovation-driven economy. Our prognosis is good! Our people are well-educated and highly skilled. Our position at the heart of Asia puts us in a region of fast-growing demand where these skills can be put to good use to meet the needs of Asian consumers. We have a strong scientific base built up over years of investment in science and technology, giving us strong research institutes and globally-leading Institutes of Higher Learning (IHLs) which can support industries in their transformation. Last but not least, we have a vibrant startup ecosystem driving innovation in the economy and serving as a means to capture economic value from upstream investments in R&D. Yet, with all these pre-requisites, success in economic and industry transformation is not a given. We have much work to do together and there are hurdles to a successful transformation. The most difficult hurdle to tackle is mind-set change. Let me explain.

5.                  Executing the Industry Transformation Maps (ITMs) and economic transformation will not be a once-off process. It will be a long-term endeavour. Technologies and consumer preferences are constantly changing, hence business models will have to adapt repeatedly to meet these needs, and our workers will need to continually upgrade their skills to remain relevant. This is not a new phenomenon. Our economy has undergone transformation before. But the speed and pervasiveness in which the technological change and disruption is taking place is unprecedented. Tackling changes posed by the technological revolution therefore requires a fundamental DNA evolution on our part. We need to develop in us, the DNA of continual upgrading and lifelong learning. This is the basis of the SkillsFuture initiative. A fundamental mind-set change is needed, regardless of whether you are a business owner or a worker. The Healthcare sector exemplifies this: With new medical discoveries and new treatment modalities coming on stream every few months, learning new skills and knowledge, adopting new technology is something that healthcare workers have embraced as part of their work. Each time a new infusion pump is introduced in the Wards, a new surgical instrument is adopted in the Operating Theatres, the entire team from the doctors, nurses, technicians, support staff etc., undergo certification training and refresher courses; the hospital management actively plans for this and also ensures the personnel are kept up to date. So lifelong learning is very much a part of the DNA of healthcare workers and the hospital management. We need to inculcate this mind-set of lifelong learning across all industry sectors so that change is not something we need to fear but something we embrace in our mission to remain competitive and deliver better products and services. We need to put in place a well-oiled system to facilitate the need for such lifelong learning across all sectors of our economy involving all stakeholders: institutions, agencies, trade associations and chambers (TACs) and Unions.  

6.                  The mindset change must start with the employers. They have an important role to play in this as they must lead the change to adopt innovative business models and technology that keep their companies competitive. Employers are also critical in developing their employees and helping them ride the fast-moving waves of technology advances. Only after the employer has decided to transform and communicated this to their workers can the workers respond by picking up the relevant skills. Armed with these new skills, they can better support the company and take up the better jobs available, in turn making the company competitive.

7.                  Employees must also maintain a positive mindset towards new technologies, not thinking of them as complicated and beyond their abilities to cope. For this to happen, the transformation must also be “user-friendly”. The fear of technology can be overcome by ensuring that the “user-interface” is an intuitive and friendly one. For example, my 5-year-old niece doesn’t need to be taught how to use an iPad. She just played with it for a while and began to work the game apps rather intuitively. We have all seen many of our own kids do so. Many of us would not need to read the instruction manuals of our new smart phones before using them. Similarly, some SMEs in the manufacturing sector that I’ve visited made the control of industrial robots via the use of iPads very intuitive. The operator is in fact interfacing with the iPad and would not need to bother with the technology behind the robot itself unless they are the technicians charged with servicing the robot. We need to change our mind-sets and not see technology as something complicated and beyond our abilities to cope.

8.                  An example of a company that demonstrates this is PSA. I visited PSA last week. The port has been testing and adopting many automation technologies to enhance productivity. This includes the testing of unmanned automated guided vehicles (AGVs) as well as automated and remotely-controlled yard cranes and quay cranes, which help to provide better service levels and enable our port to remain competitive in the face of global competition.

9.                  PSA has not pursued automation at the expense of its drivers and crane operators. In fact, automation has allowed for the creation of higher-skilled, better-quality jobs for them. During the visit, I met Mr Aw Eng San, a 53-year-old crane operator who has been with PSA since 1994, but who, despite his years, displays a positive mindset towards change. He was initially apprehensive when PSA decided to automate its yard cranes. However, PSA, working together with the Singapore Port Workers Union (SPWU) and Port Officers’ Union, reassured him, as well as the more than 1,000 other PSA staff going through the transformation journey with him, that jobs would still be available for all of them and that PSA would sponsor their training in the required skills. The training was well-designed and eased the process of change- after just 3 weeks of classroom training, as well as subsequent on-the-job training, he has since settled into his new role in the automated yard operations control centre, managing exceptional situations for a fleet of automated cranes using a joy-stick and hi-definition remote cameras. Rather than being isolated in a crane cabin which can be hot on certain days and where he has to climb up a vertical ladder to get to, the new job allows him to work indoors and interact with his colleagues in an office environment. By keeping a positive mind-set towards change, Mr Aw has learnt a new skill and stayed relevant. As a result, he has contributed to an improvement in PSA's overall performance, and his pay package has also increased through higher performance incentives. He is now even encouraging his friends from the other terminals to join him. From a typical blue collar job, his job is now an “office job” that is less physically demanding, safer and more fulfilling. With the expansion to Tuas Megaport, I’m sure more exciting jobs will become available!

10.                   It is not only the “big companies” that are capable of transformation. Let me cite the example of home-grown halal bakery, Swee Heng. Last year, Swee Heng invested in a new 60,000 square foot factory that is semi-automated and houses state-of-the-art equipment, such as two tunnel ovens that make baking more efficient. The new factory has enabled Swee Heng to triple its former daily production capacity and it is now producing 30,000 cakes and 120,000 bread dough daily, while reducing manpower required by an average of 50% – as a result, manpower can be redeployed to perform more intricate tasks such as cake decorating.  Swee Heng has also digitalised much of its manual processes and upskilled older workers to become more tech-savvy. Its storefront retail employees have moved from writing on paper and faxing orders to the HQ, to placing orders directly from the tablets. This reduces order consolidation time by three times, allowing the production site to have access to quicker and more accurate order information.

11.                   Beyond mind-set change, how can we better leverage on our strengths to effect a successful transformation? 

a.      Our well-educated population is one of our key assets. We need to better engage and co-create policies with our people, to harness the power of an increasingly educated and better-informed population towards the creation of better outcomes for everyone. Let me share an observation from my personal experience as a doctor, having witnessed the change in patients’ dispositions over the years. In my own experience, patients in the past tended to be highly compliant and more dependent on their doctors to play a paternalistic role in looking after their health. We were often frustrated that patients were not able to comply with the treatment prescribed (not completing antibiotics, not using asthmatic inhalers properly). Today, patients are better informed, and do not necessarily take their doctor’s advice at face value. They ask their doctors many questions and may only comply with the doctor’s advice after the doctor has spent time explaining his decisions. But once we are able to get the patients to understand the issues and empower them with knowledge, more patients today are taking charge of their own health and it is thus a satisfying partnership for our doctors to work with their patients towards achieving better health outcomes. In making our ITMs work, we must continue to listen to our workers and our business owners to ensure that as the transformation progresses and the operating environment changes, our strategies and tools must evolve in tandem to meet new needs and new challenges. Government needs to be flexible and be prepared to make changes where necessary. We have to better communicate to our people the challenges and limitations we face, so we can make the necessary trade-offs and remain competitive as “Team Singapore”.

b.      The second strength we have is also our uniquely Singaporean secret sauce – our strong partnerships and tripartism. Our Government agencies work hand in hand with TACs which represent businesses, and Unions which represent workers. This is something that sets us apart from many other countries which face the same challenges we do in economic transformation. Each ITM is an integrated plan bringing the tripartite partners together to drive change for its particular sector. But the ITMs are only of value if they can be executed and executed well.  Tripartism is the “soul” that brings the ITM to life. While the ITMs have, as their starting points the transformation of enterprises, the ultimate aim is to ensure that our workers are equipped with the right skills and knowledge to benefit from the fruits of this transformation and innovation. The tripartite partnerships involved in each ITM are therefore crucial to bring together this integrated perspective. Just as important, we also need to continually reinforce our society’s capabilities to support its more vulnerable members. We need impactful initiatives like Adapt and Grow in which the Government provides support for our workers to learn and upgrade their skills throughout their lives, with particular attention to helping displaced workers learn new skills and utilise them in better jobs. These are concrete ways in which we can ensure that Singaporeans are not left behind in the midst of economic progress and keep inequality at bay.

12.                   As Mr Thomas Chua mentioned yesterday, we need to continue to empower the TACs to do more with the employers to help businesses better understand the transformation journey they can undertake in their sector and support them in taking the first steps. We need to find more ways in which the Unions can participate in the training and re-skilling of our workforce, to catalyse the mind-set change. More importantly, we need to ensure that the fruits of economic transformation translate to real tangible benefits for our workers. Beyond the usual measurements of productivity gains and VA per worker, we need to have better ways and better parameters to measure how workers benefit from the transformation. A good example of this tripartite effort is seen in the Air Transport ITM, which was developed in close collaboration with the Air Transport Industrial Tripartite Committee (ITC). The Air Transport ITC was set up in 2015 and comprises top management from the Civil Aviation Authority of Singapore (CAAS) and relevant Government agencies, Changi Airport Group, NTUC, the airlines and ground handling agents, which together account for 85% of total employment in the sector. Meeting every quarter, the ITC aims to shape and drive manpower and productivity initiatives for the sector through tripartite collaboration. Notably, the ITC has a Workforce Transformation Workgroup through which it regularly updates members such as NTUC and the Union leaders on the progress of industry transformation and workforce issues in the sector. The inputs obtained through the ITC’s channels on Government initiatives and ground sentiments have proven valuable in helping our agencies further refine their schemes and programmes. In my concurrent appointment as SMS of MTI and Deputy Secretary General of the NTUC, I hope to be able to further bridge the gap between Government agencies and the Labour Movement, particularly in the implementation of our ITMs.

Adopting a more tailored approach for different industry segments.

13.              Throughout all this, Government must remain nimble and be prepared to change our approach when needed. Even within the ITMs, we have, where necessary, taken a tailored approach in the formulation and implementation of our ITMs, as each industry segment has a different make-up and faces different challenges. This is a reflection of what Mr Teo Ser Luck pointed out yesterday, that even within each industry, different approaches will need to be taken for different groups of enterprises. We will continue to review and adapt our ITMs to meet the needs of each industry, even as these needs change over time.

14.              To illustrate, for enterprises in more innovation-intensive industries, for example in manufacturing sectors, the capabilities the enterprise needs to develop can be highly enterprise-specific. In such cases, we support companies to develop company-specific operational-technology roadmaps (OTRs) to map out how they can use technologies to meet their needs. They can subsequently be supported through schemes like the Capability Development Grant to take up these technologies.

15.              On the other hand, for sectors like logistics and air and sea transport, the technologies required are more similar across enterprises. In such cases, we adopt a more broad-based approach which allows many firms to benefit. We do this in two ways. First, based on our engagement of firms in the industry, we pre-scope and pre-approve technology solutions which meet the firms’ problem statements. These pre-scoped solutions are specific to the needs of each industry and can be supported through the Productivity Solutions Grant, available online on the Business Grants Portal. Our second approach is to develop technology platforms such as the National Trade Platform which allow for digitalisation of documentation in the sector and also provide innovative value-added services. These are also open to all firms in the industry.

Conclusion – Everyone has a role to play in and can benefit from an innovation-driven economy.

16.              The challenges ahead are not insurmountable. All things considered, Singapore has all the ingredients for success. Globally, everyone is facing the same set of challenges as a result of the rapidly changing environment, but Singapore is well placed with distinct advantages to embrace innovation-driven growth for our enterprises and people. The Government is prepared to support our enterprises and people in their transformation journeys.

17.              Everyone has a role to play as we move into the innovation-driven economy of the future. And everyone can participate in it – Whether as a worker submitting an innovative idea to improve work processes or as a student through school projects, or a first-time entrepreneur coming out to start your own business, or even a retiree who has a great idea. The key is being open in our thinking and being prepared to make the necessary changes. Businesses must lead change as they bring together and organise their resources in new ways, while our people have a responsibility to upgrade their skills, develop new ideas and take risks to make change happen. If we can hunker down and band together, our enterprises and our people will emerge all the better for it. Singapore is not defined by the progress and accolades it has achieved, but our constant striving to do better. Our story has always been about the future that we create through our collective efforts.

[1] 8 May 2018.

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