SINGAPORE - Productivity has been weak since the restructuring drive began in 2010 but Deputy Prime Minister Tharman Shanmugaratnam is confident that it will take off in the next few years.
This is because productivity will take a few years to grow and it is clear that the drive is gaining traction in the industry, he said.
Responding to MPs who had raised concerns over whether Singapore can achieve the productivity targets set, Mr Tharman admitted that gains have been weak in recent years.
"Productivity has been weak. Last year it was miserable, minus 2.6 per cent, in fact," he said.
The decline in productivity last year was because of the unique economic situation that Singapore was in last year - growth was slow but the labour market was tight, he said.
Productivity is calculated by how much more value, in dollar terms, a worker adds to the economy.
Slow growth combined with good job creation can lower the overall productivity number.
"There is a gestation period before productivity schemes can take off, before firms can customise the schemes that are available to their own needs and can actually think through what is in their business interest," he said.
He is optimistic that after this period, productivity will pick up again, especially since the money set aside for the drive has not been drained yet.
Plans that the Government has developed are being put out alongside the disbursement of the productivity-linked incentives and grants.
Said Mr Tharman: "And in the next few years we're going to see a lot more traction, a lot more take-off because many of the road maps have now been developed and they are ready to roll."
He highlighted the construction sector as a prime example of how things will shape up.
Noting that alongside the foreign worker tightening, the Government has been working with industry and changing policies to aid productivity growth there.
"By the end of this decade, we will see a different construction sector," he said.
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