3.4. Policy implementation bodies

These four strategic directions will be supported by investment in physical and social infrastructure, stronger industry-specific coordination effort through the Industry Transformation Maps as well as more effective governance including through more comprehensive consultation and partnerships with stakeholders.

Even if the latest strategic review is less specific of the underlying macro-economic model and the logic of growth, it would seem from the on-going discourse that productivity oriented thinking is still an important conceptual model driving (or at least strongly influencing) the planning efforts and coordination of government policy. This is particularly seen from the budget statement in 2017, where it was explicitly stressed that achieving growth necessitates pressing on productivity.

This model of the GDP growth equals productivity growth was also directly stated in the Committee of Supply debates in 2016 by the Minister of Manpower. Finally, the importance of productivity, manpower and added-value indicators is explicitly seen in the target setting exercise as part of setting the Industry Transformation Maps and is also retained as an important part of the stated KPIs of the lead ministries – the Ministry of Trade and Industry and the Ministry of Manpower.

3.3.3. Conclusions

Overall, despite the decision to limit the growth of immigrant labour, which is a very notable change in the economic strategy recently, the government continues to openly rely on the same, growthaccounting inspired economic governance model, with a particular emphasis on productivity growth. Nevertheless, risks to this growth model are recognised, including the slowing down of international trade; subdued demand in the largest markets and growing competition for higher value-added manufacturing, for example coming from China. Also there are risks felt as regards the potential transformation of economies due to enhanced adoption of digital and automation technologies, arguing for the need to develop capabilities that would help to adapt as soon as such changes start materialising.

3.4.Policy implementation bodies

Besides long-term economic national targets set by the aforementioned committees, the policy work in Singapore is further guided by three further levels: - Annual budget, announcing main policy interventions, regulatory changes and distribution of budgetary resources; - Annual expenditure plans, expenditure reports and performance monitoring frameworks at the ministerial level, in particular the two important ministries dealing with industrial and workforce issues – Ministry of Trade and Industry (MTI) and Ministry of Manpower (MOM); - Annual reporting by the thematic agencies, responsible for the implementation of policy interventions – i.e. statutory bodies like EDB, Spring, SSG/WSG, A*STAR and IE.

In order to analyse policy implementation capacity, it is important understand the links between these other levels bodies to the broader framework of the economic development logic as well as the coordination of their activities. Therefore, below an overview of the objectives, planning and reporting structures of these bodies is presented analysing reporting documents available at the public domain.

44

3.4.1.Governance through annual budget

The adoption of the annual budget is an opportunity for the government every year to state their latest policy priorities as well as announce latest policy initiatives. These announcements provide probably the most detailed public account of the overall economic and social policy framework in Singapore. All major economic and industrial policy initiatives, including the Industrial Transformation Programme, have been usually announced when presenting Singapore’s annual budget. It is also the time when multi-year financial appropriations and commitments are publicly announced. The annual budget proposal also includes detailed breakdowns of expenditure plans by each relevant ministry (see more details in the discussion below).

3.4.2.Ministerial-level governance

The ministerial level is the most important level of governance where the design of policies and their implementation takes place. For industrial policy, the most important portfolio falls under the Ministry of Trade and Industry (MTI), which was set as the responsible body for the implementation of Industrial Transformation Programme. Ministry of Manpower (MoM) and Ministry of Education (MoE) are also important from the perspective of developing skills and ensuring adequate supply of labour.

As part of the process of the adoption of annual budget, ministries must also present detailed expenditure plans for the parliament in the so called “Committee of supply” debate; furthermore, each ministry, including the office of prime-minister have a set of global performance indicators, with MTI tasked to be responsible for the economic performance indicators – GDP growth, productivity growth, R&D investment and other.

It is notable, that performance indicators of MTI have witnessed a notable change since 2010, when earlier indicators measuring the added value of MTI policy (primarily EDB projects), such as total added value from EDB projects; total fixed asset investment from EDB projects; total business spending from EDB projects and total skilled jobs created from EDB projects have been discontinued, in exchange providing only indicators of added value for broad sectors (services and manufacturing). Still, the indicators on value added from EDB projects continue to be available in the EDB annual reports.

MTI, in its operational budget also is responsible for all the major statutory boards (agencies) responsible to support economic development and industrial policy in Singapore – Economic Development Board (EDB); Spring Singapore; Agency for Science, technology and research (A*STAR); International Enterprise Singapore (IE) and Singapore Tourism board.

3.4.3.Government agencies (statutory boards)

The Economic Development Board (EDB), presumably the oldest agency in Singapore dealing with industrial policy and competitiveness, established in 1961. It is responsible for planning and executing strategies to enhance Singapore’s position as a global business centre. In 2017 budget it was provided with 175.84 million SGD operational budget and to oversee a 419.3 million SGD development budget. In terms of results of its activities every year it provides an overview of key performance indicators based on project commitments that were attracted and agreed by EDB. In 2016, the results of EDB activities were reported as: committed 9.4 billion SGD total fixed capital investment; committed 8.3 billion SGD total business expenditure per year; expected 12.9 billion SGD incremental value-added contributed to Singapore GDP per year and 20.100 jobs are expected to be created.

45

The standards, productivity and innovation board (SPRING), is the main agency for enterprise development, and it aims to enhance the competitiveness of enterprises to develop a strong base of dynamic and innovative Singapore enterprises. It is also the national standards and conformance body, established in 1996 as a result of a merger between two previously independent bodies. In 2017 budget it was provided with 97.42 million SGD operational budget and to oversee a 300.8 million SGD development budget. In terms of results of its activities every year it tracks the amount of projects agreed with companies and the expected or committed outcomes of those projects. In 2016, the results of SPRING activities were reported as: 16.300 companies engaged in projects; 7.8 billion SGD value-added contributed for the economy and 21.400 skilled jobs are expected to be created.

The agency for science, technology and research (A*STAR) is the lead public agency that drives mission-oriented research to advance scientific discovery and technological innovation and to bridge the gap between academia and industry in terms of research and development, established in 1991. In 2017 budget it was provided with 48.5 million SGD operational budget and to oversee a 1.19 billion SGD development budget. In terms of results of its activities every year it tracks outputs like R*D activities, outcomes and training. In 2016, the results of A*STAR activities were reported as: 1800 R&D projects; 233.61 million SGD industry R*D spending; 235 licenses issues; 9.05 million licensing revenues received; 107.1 industry cash funding received (as part also of 2nd performance indicator); 17 spin-offs; 66 researchers seconded to industry and 126 PhD Postgraduates trained or in training.

International Enterprise Singapore (IE) is the government agency promoting international trade and partnering Singapore companies in their overseas expansion efforts. IE Singapore plays a key role in strengthening our trading ecosystem and promoting Singapore as a thriving trading hub for global commodities traders. IE Singapore also leverages its global network of overseas centres to help Singapore-based companies in various stages of growth gain global competitiveness. In 2017 budget it was provided with 121.84 million SGD operational budget and to oversee a 47.1 billion SGD development budget. In terms of results of its activities every year it tracks the level and engagement of Singapore in international trade as well as support measures provided. In 2016, IE reported to have assisting 37.000 companies with 73.4 million SGD in grants; supporting 450 projects – 75 related to market entry, 45 e-commerce and 21 M&A, with expected overseas sales of 9.4 billion SGD.

Singapore Tourism board (STB) has the responsibility to oversees all aspects of tourism, including resource allocation and long-term strategic planning as well as establishing offices around the globe to actively market the Singapore destination. In 2017 budget it was provided with 205.29 million SGD operational budget and to oversee a 452.07 million SGD development budget. In terms of results of its activities every year it tracks the amount of promotional activities organised, partnerships formed and their outputs – i.e. arrivals and receipts generated. In 2016, the results of STB activities were reported as: support for 410 business events; 343.000 visitors’ arrivals and 611 million SGD tourism receipts generated.

3.4.4.Conclusions

In conclusion, for the implementation of industrial policy initiatives a key role is played by the government agencies that are granted with substantial financial resources for operational purposes as well as tasked to disburse financial resources as support or incentives for the private sector. They usually use very concrete performance indicators, most important those linked to calculating the value-added that is expected or linked to their activities and support provided; but also indicators such as jobs, investment or trade generated. Still, there is little information on the methodology behind such indicators and their contribution to the broader performance of the economy, i.e. indicatively in the case of EDB the leading proportion (50% or more) of VA are generated by headquarters, R&D and professional services sector.

46