3.8. Industry transformation programme (ITP

As a conclusion, it is evident that many of productivity focused policy programmes have been present already before 2010 however a renewed emphasis on productivity resulted in a number of new programmes. The most notable are tax allowance (credit) for innovation and productivity (PIC) providing a total of 4 billion SGD in tax savings for companies between 2010 and 2018, National Productivity Fund spending of around 1 billion SGD during the same period and an enhancement of Capability Development Grant (CDG) in 2015 for 3 years to cost additional 600 million SGD. In the context of industry transformation programme in 2016 only national robotics programme was announced as a new instrument of 450 million SGD, without much further details. These instruments were complemented with financing, internationalisation and R&D instruments; however it is not possible to estimate their exact financing scope and evolution.

3.8.Industry transformation programme (ITP)

Industry Transformation Programme (ITP), launched in 2016 as part of the annual budget announcement, with the overall announced budget of 4.5 billion SGD, will include both horizontal as well as sectoral initiatives to promote industrial transformation, support productivity growth and enhance coordination between different government programmes and initiatives, covering 23 industries grouped in 6 clusters. For each of the industry, in consultation with employers, labour unions and other actors, a dedicated Industry Transformation Maps (ITMs) will be developed, to guide public support and investment. Under a common structure of the ITP, all the planned actions (policy interventions) shall fall under one of the four thematic pillars that shall underpin each ITM and would drive industry transformation:

 Actions to raise productivity, in particular targeting SME's;  Actions to develop skills;  Actions to drive innovation, particularly through R&D;  Actions to promote trade and internationalisation.

In addition, three further factors are considered as critical to ensure success of the ITP/ITMs:

 Ensuring broad coordination across agencies and stakeholders;  Reaching a substantial industry coverage;  Achieving ownership by social partners – both employers and employees.

The horizontal actions of the ITP are grouped around three “thrusts”: supporting the transformation of enterprises, supporting the transformation of industries and driving the transformation through innovation. The instruments targeted at enterprises include:

- Business grant portal; - Automation support package; - Financing and tax incentives to support scale-ups; - Support for internationalisation.

The instruments targeted at industries include:

- National trade platform; - Leveraging new technologies via national robotics programme; - Increasing outreach through TACs

The instruments to support transformation through innovation include:

74

- Deepening innovation capabilities; - Strengthening innovation and enterprise networks; - Launch of Jurong Innovation District.

The responsibility to implement the ITP has been distributed between (or more precisely being carried out in cooperation with) a number of dedicated bodies. The overall responsibility of the ITP has been designated with the ministry of trade and industry (MTI). At the same time, the responsibility for each specific ITM has been dedicated to a particular government agency.

Furthermore, the implementation of actions under each of the four pillars of every ITM is carried out in coordination with other specialised agencies, which are responsible for the particular instruments. In the case of policy instruments aimed at skills development and workforce planning the responsible agencies are respectively SkillsFuture Singapore (SSG) and Workforce Singapore (WSG). For productivity it is Standards, Productivity and Innovation board (SPRING); for innovation – Agencies for Science, Technology and Research (A*STAR) and for internationalisation – International Enterprise (IE) Singapore.

If compared to the effort in 2010, the sectoral coverage of the ITP is more extensive, including 23 sectors that represent 80% of Singapore GDP. They are grouped into six clusters, with each ITM designated with a responsible body:

- Manufacturing cluster, with Energy & Chemicals, Precisions Engineering, Marine & Offshore,

Aerospace and Electronics sectors, all within the Economic Development Board (EDB) responsibility. - Built environment cluster, with Construction (responsible Building and Construction Authority),

Real Estate (responsible Council for Estate Agencies), cleaning (responsible National

Environment Agency) and Security (responsible Ministry of Home Affairs) sectors. - Transport & logistics cluster, with logistics (responsible EDB), air transport (responsible civilian aviation authority), sea transport (responsible maritime and port authority), land transport (responsible land transport authority) and wholesale trade (responsible International

Enterprise Singapore) sectors. - Essential domestic services cluster, with healthcare (responsible ministry of healthcare) and early childhood and private education (responsible ministry of education) sectors. - Professional services cluster, with professional services (responsible EDB), ICT and media (responsible ministry of communication and information) and financial services (responsible

Singapore monetary authority) sectors - Lifestyle cluster, with food services (responsible SPRING), retail (responsible SPRING), hotels (responsible Singapore tourism board) and food manufacturing (responsible SPRING) sectors.

By the end of 2017, 15 out of 23 industry transformation maps have been launched, with many of the launched ITMs including rather explicit targets. These targets usually focus on value added and productivity growth; new PMET jobs created and in some cases manpower growth projections and other more sector-specific objectives. For example:

- Logistics ITM includes a value added target - aiming to reach 8.3 billion SGD as well as jobs target, aiming to create 2000 new PMET jobs; - Retail ITM includes productivity target (1% growth p.a.) as well as specific target for ecommerce share to reach from 3% to 10% of industry turnover; - Food manufacturing ITM has a value added growth target of 6.5% p.a.; overseas income growth target of 8% p.a. and productivity growth target of 4.5% p.a.;

75