Productivity rises to reach 0%


Since 2004, labour productivity has been on a down trend. It has declined further in the second quarter of 2008 (-7.5 per cent). In 2013, it saw an improvement from a negative figure to flat at 0%.

Declining productivity, coupled with increasing costs, does not augment well for the Singapore economy. GDP growth sine 2004 has been dependent on labour increase.

In laymen’s terms, this means business have been relying on foreign labour and immigration to prop up their output. It did not mean they have been doing better business, it does not necessarily mean they have been selling well. It just means they have been keeping labour costs low.

Singaporeans have voiced their concerns on this. Over crowdedness and erosion of our social fabric gives us the consensus that the nation is too populated.


But what is the businessman to do?

Employers are not happy. There had been reported number of shutdowns in various industries. Mainstream media has reported closures of popular restaurants.

For the business owner, I can understand the frustration. Although I empathise with the difficulty of doing business, profit should not be earned at the expense of wages.

It sounds counter intuitive, but businesses should learn how to spend more money, to make more money. Invest in technology, invest in employees who can think strategically

Injection of capital by Government

Investments into technology and employee training costs money and companies may not be ready to put money into these areas in the short-term.

This is where government intervention is useful. The now famous Productivity and Innovation Credit scheme was designed to do just this: get companies to invest into processes and equipment that would help raise their productivity.

NTUC’s Inclusive Growth Programe is set out with similar objectives, with one requirement – that the company redistributes savings to workers.

The Ministry of Manpower has deployed a Continuing Education and Training (CET) masterplan. They funded the training of over a million workers from more than 30 industries, all trained under the Work Skills Qualification framework.


Productivity is just a better means of doing things.

Apart from technology, companies should also invest into people who are able to help them strategise.

If you are a business owner, consider these little tips to improve productivity in your own operations:

1. Give autonomy to self-manage. Productivity can be optimized if the worker is given the autonomy to manage his own work.

2. Continuous innovation. Workers that innovate continuously tend to be effective. This is unlike manual work where strict adherence to stipulated standards or procedure is more important than innovation.

3. Continuous learning and teaching. Continuous learning on the part of the worker ensures that skills and knowledge remain current and relevant, as new technology and challenges evolve rapidly. To ensure that his knowledge is internalized and adds to the company’s overall productivity, it is also his responsibility to teach continuously.

4. Aim to maximize quality first, not quantity. Productivity aims first to attain maximum quality. To maximize quantity is secondary. Quality is not a minimum; it is the “essence of the output”

5. Be an asset, not a cost. A manual worker is seen as a cost by his employer. As such, the aim is to amortize this cost over a larger base of output. Basically, manual workers are “costs that need to be controlled and reduce”. In contrast, a worker who is an asset flourishes on investment and craves to return to the company.







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