Learning and Productivity Performance in Singapore Manufacturing Industries

In the need to respond to global competition and remain competitive, companies have made concerted efforts to capitalize on the intellectual properties and core competence available within the enterprises. In particular, it is reckoned that an enterprise with a workforce that exhibits greater willingness to learn and develop skills through cumulative production experience is able to achieve lower unit cost of production and substantive improvement in productivity. This short paper develops a simple model to investigate the phenomenon of learning and productive performance of workers in Singapore’s manufacturing industries, which have continuously restructured to meet international challenges.

The results of the paper suggest that (a) there are substantial learning and productivity improvements in Singapore manufacturing industries, (b) the learning and productivity improvements varies across the different manufacturing clusters and (c) industries that are more open (higher export ratio) and have greater foreign ownership tend to experience higher learning effects.

Learning Curve

The learning curve is one of the most important concepts in evaluating the dynamic efficiency and competitiveness of companies and industries in the economy. When employees in an industry learn and gain experience by producing more of the same product, the value created per employee (productive performance of the worker) will increase; and the cost per unit of output will accordingly decline.

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