DPM Gan Kim Yong calls for upskilling and productivity-led growth as Singapore’s labour force is expected to slow down

SINGAPORE: Singapore is set to become a “super-aged” society by 2026 due to its declining birth rates, a shift that will significantly slow down the growth of the local labour force.

Deputy Prime Minister Gan Kim Yong addressed this pressing issue at the Institute of Banking & Finance (IBF) 50th-anniversary gala on Sept 13, stressing the need for upskilling and productivity-led growth to maintain economic progress.

According to Singapore Business Review, in his speech, Mr Gan highlighted recent positive trends in Singapore’s financial sector. In 2023 alone, the sector saw an increase of 4,800 in total employment.

Notably, senior positions held by Singaporeans have tripled over the past seven years, rising to 6,500 from fewer than 2,000 in 2016.

He also highlighted that Singapore’s financial sector is a major contributor to the economy, making up about 14% of the GDP in 2023. The sector also experienced a real value-added growth of 3.1% annually from 2021 to 2023.

Mr Gan stated, “Many good jobs with competitive pay have been created.” However, he warned that Singapore’s shift to a super-aged society will pose challenges.

As the local workforce dwindles, future economic expansion will need to be driven by increased productivity, particularly in the skills-intensive financial sector.

He acknowledged that achieving this will be challenging, noting that many advanced economies have struggled to achieve more than 1% annual labour productivity growth over the past decade.

“Continual upskilling of our workforce is therefore vital to achieve sustained productivity growth,” he added.

Recent industry initiatives have focused on upskilling and talent development to address these challenges.

The ITF has launched a refreshed suite of Future Enabled Skills, which now includes training in sustainable finance and generative AI for financial sector professionals. 

Mr Gan noted that IBF and SkillsFuture Singapore are also working together to build sustainable finance capabilities with real economy companies.

Earlier efforts, such as the 2019 launch of the Jobs Transformation Map (JTM) by MAS and IBF, have already made strides in helping authorities and stakeholders reskill and redeploy employees affected by automation.

Another initiative is the Polytechnic Talent Finance Scheme, which encourages financial institutions to recruit and train polytechnic graduates. /TISG

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