Singapore is now the most prosperous country in per capita terms in the Asia Pacific region. In 2022, it surpassed Hong Kong in financial centre dominance rankings and likely in overall labour force size as well. Yet as a trade-dependent economy, Singapore remains susceptible to global tensions. To secure prosperity and future growth, officials have lately focused on refashioning goals and initiatives around meritocracy and talent.
In February 2023, Finance Minister Lawrence Wong addressed parliament on the need to ‘reposition’ and ‘differentiate ourselves in quality and value … [with] a strong talent pipeline’. In a similar vein, then-Deputy Prime Minister Tharman Shanmugaratnam told journalists that ‘we’ve got to be a broader meritocracy, recognising different strengths’. In 2021, Tharman urged ‘constant upskilling’ for ‘collective resilience’. And in October 2023, the Forward SG Report reaffirmed the importance of ‘creative destruction’ alongside ‘support for Singaporeans to adapt … acquiring new skills’.
Discussions of meritocracy rest on a number of concerns including inequality, stoked by frustrations toward well-paid immigrants and soaring housing prices, which many young Singaporeans feel preclude their own economic uplift. The government has promoted support for Singaporeans to learn skills and (re)enter universities at older ages, and tightened visa restrictions on incoming white-collar workers, hoping to enlarge ‘pipelines’ for Singaporeans to gain jobs with multinational firms. Multinationals must satisfy rising local hiring quotas, and by 2025, the minimum salary to obtain a work visa will be 25 per cent higher than in 2020.
Singapore also needs new growth drivers beyond its reliance on logistics, fuel processing and finance, with these sectors (including wholesale trading) contributing around 40–45 per cent of GDP. Amid climate risks and trade ‘de-risking’, it is hard to predict significant new value adds from oil and logistics — though Singapore continues to grow as a transport hub.
Singaporeans are rightly cautious about depending on cross-border finance for long-term growth and authorities hope more workers will join ‘advanced’ sectors like pharmaceuticals and agritech to diversify the economy.
Another concern is that mechanisms for promoting talent are not keeping pace with the range of skills needed for an increasingly complex economy and society. Singapore achieved rapid growth through narrow, high-stakes exams and highly educated civil servants, a strategy which partly aimed to propel industrialisation. While helpful for earlier development, this now seems less amenable to fostering creativity, innovation, diverse consumer and business services, as well as the arts and cultural activities that enrich lives and make Singapore attractive and vibrant. Authorities are gearing up for more education reforms, on top of adopting schemes like ONE Pass that grant visas to artists.
That Singapore has such concerns reflects how significantly it has developed. In the 1980s, Singapore’s enrolment rates in higher education were slightly lower than those of the Philippines.
By 2019, Singapore’s gross enrolment rates reached 91 per cent, beating the OECD average.
Educational investments have had increasingly visible effects, far surpassing expectations from a few decades ago. From the mid-2000s to the 2010s, Singaporean enrolments at Harvard, Oxford and Cambridge doubled or tripled. Among Oxford or Cambridge undergraduates, Singaporeans now outnumber students from Scotland and every other Commonwealth country, while at Harvard’s graduate school, Singaporean students now outnumber British students.
Similar Singaporean successes can be seen at leading universities from Australia to China. In the last decade, Britain’s Royal Society elected three Singapore-based researchers as fellows, compared to none in the previousdecade. The National University of Singapore and Nanyang Technological University — Singapore’s two leading universities — have taken top 50 positions in global rankings. In the World Bank’s Human Capital Index, Singapore ranks first.
Still, Singapore’s talent policies seem not to have fulfilled all of the country’s economic wishes. Total factor productivity— which grew at world-beating rates in the 1980s–90s — may have declined in the 2010s. Singapore does foster some start-ups, but the value-added by small enterprises has barely grown since the early 2010s. Employment in small enterprises has fallen by about 40,000 since 2014, whereas large firms have expanded.
Richard Yarrow is Research Fellow in the Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School.
Source: East Asia Forum
