Mr Leon Perera asked the Minister for Trade and Industry (a) what is the pattern of funding from the National Productivity Fund (NPF) by industry in the past five years; (b) whether the NPF uses research to benchmark Singapore’s productivity according to sectors with other developed countries and when deciding how much to fund each sector; and (c) whether NPF is also funding initiatives undertaken by trade associations and business chambers in addition to Government agencies.
The Minister of State for Trade and Industry (Ms Low Yen Ling) (for the Minister for Trade and Industry): Mr Speaker, Sir, over the past five years, the National Productivity Fund (NPF) has disbursed over $1 billion across 47 projects relating to productivity improvements and continuing education and training (CET). About half was spent on productivity improvement projects and the other half was spent on CET programmes.
Some of the larger projects funded by the NPF include sector-specific schemes like the Construction Productivity and Capability Fund, as well as schemes that support enterprise and workforce transformation like the Inclusive Growth Programme and the SkillsFuture Enterprise Credit scheme. Projects supported by NPF complement our wider range of schemes and projects in driving productivity improvements.
In identifying areas for productivity improvement, sector agencies take into account feedback from the industry, best practices from Singapore and globally, as well as relevant benchmarking studies. For example, to identify suitable interventions for greater productivity in the retail and food services sectors, productivity benchmarking studies were commissioned on industry performance and efficiency in areas such as labour and space, in Singapore and overseas.
The design and implementation of projects are done in close collaboration and/or consultation with trade associations (TACs) and the Employment and Employability Institute (e2i). Working with the relevant TACs helps ensure that initiatives are designed to meet the needs of the industry. For example, the Hotel Innovation Committee (HIC), in an effort led by the Singapore Hotel Association (SHA) and supported by the Singapore Tourism Board (STB), steered the sector to adopt technology solutions to raise productivity.
The HIC developed initiatives like the Hotel Technology Directory to connect industry players with technology solution providers as they sought to transform their business processes. This has helped spur the adoption of solutions such as the self-check-in technology that is integrated with STB’s E-Visitor Authentication system, robotics and RFID tracking.
Mr Speaker: Mr Leon Perera.
Mr Leon Perera (Aljunied): I thank the Minister of State for her reply. Just a few supplementary questions. Firstly, to confirm my understanding, does the NPF restrict its funding to other Government agencies, to support the projects that those agencies are running, or is the NPF also open to funding TACs, business chambers or even individual companies for their productivity enhancement efforts?
The second supplementary question is, is the approach taken by the NPF more proactive or reactive, or is it a blend of both? Meaning to say that, can any organisation pitch a project to the NPF to request funding or is it the case that the NPF is not really open to that sort of modus operandi and they will just determine what sectors or what projects they want to do in any particular year?
And thirdly, I am wondering if the NPF makes easily available online a statement of its objectives, its KPIs, its strategies, maybe a review of what it has done in the past year. Many Statutory Boards and agencies do have their annual reports online where the CEO will talk about the agencies’ priorities, what they did in the previous year, what their goals are for the coming year and so on. I found it quite difficult to search for this information – and I stand corrected if I just did not try hard enough – and I only found some information on the NPF for 2010 and 2017. For 2017, I was able to find the annual report; it is a very brief annual report and I found it through the National Archives website, actually. So, I was just wondering if this information is easily available and if not, will it be made easily available, going forward, given the tremendous amount of funding that is going into the NPF?
Mr Speaker: Two on observations. Please keep it concise and a reminder to try to keep it to two supplementary questions. Do not sneak in a third one.
Ms Low Yen Ling: Thank you, Mr Speaker, Sir. I want to thank the Member Mr Leon Perera for his three questions. Allow me to take a step back to recap.
Mr Leon Perera and Members would remember that the NPF was set up in 2010 to support programmes relating to productivity enhancement as well as Continuing Education and Training (CET). It came about because of the Economic Strategies Committee (ESC). It was part of the wider push for productivity growth arising from the ESC recommendations.
The NPF has been set up since 2010, so it has been about 13 years. The NPF, especially since the formation of the Future Economy Council, also supports the work of the 23 Industry Transformation Maps (ITMs). The Ministry of Trade and Industry (MTI) Committee of Supply (COS) on Tuesday has highlighted the work of the ITMs.
The ITMs are not just under the purview of MTI and our nine economic agencies. Some of the other agencies and Ministries are involved. For example, for the build environment, the Building Construction Authority (BCA) is very involved in spearheading the built environment ITM.
The NPF supports the work of the Future Economy Council that drives the growth and the transformation of Singapore’s economy for the future. You would remember that for the ITMs, there are a few pillars. Productivity is one important pillar. Innovation, internationalisation, creating good jobs for Singaporeans today and tomorrow.
So, the establishment and the top-up for the NPF highlights the Singapore Government’s strong commitment towards productivity enhancement and CET.
I want to assure the Member that the productivity projects that are funded by the NPF complements the wide range of schemes and projects, not just in MTI but, like I said, across the Ministries and agencies in improving productivity of all sectors of the economy.
I gave the number for the disbursement over the last five years. At this juncture, let me share one number, for a sense of our overall progress in productivity improvements. Our labour productivity growth rate was 2.6% per annum in the last five years, prior to COVID-19. This is consistent with the target growth rate of 2% to 3% set in 2010 when the NPF was set up.
The Member also asked about TACs. The work of the ITM is such that the sector agency cannot create policies in isolation. We have to work with the TACs because they play a very important role, advocating for the sector, bridging the communication with the sector and connecting the sector together, being a voice for the sector. The TACs are very involved.
In my reply to the Parliamentary Question (PQ), you would have heard me using the example of the hotels. STB works closely with SHA to bring that about. That is really how we get buy-in to level up the productivity across the sector, sector by sector and in fact, sub-sector by sub-sector. Whether it is the hotel, retail, food services or construction sectors, and so on.
The Member also asked whether companies can apply for NPF funding. The companies that are interested can certainly approach the sector agencies or even the TACs that might be involved. I want to share with him that the funds from the NPF are used to support meritorious productivity and CET schemes. Each of the project will have different criteria to meet, whether it is the vertical sectoral-specific ones or the horizontal ones.
To the Member’s last question to make available more information, this is certainly done across all ITMs, sharing about how we are working together with the TACs, companies in the sector and trade unions. The various trade unions are very involved in working with the TACs and the sector agencies to curate these jobs and also to implement the productivity drive.
Let me share this, if Mr Speaker could indulge me. I talked about hotels. Let me cite the example of Tranche 2 of the hotel productivity plan —
Mr Speaker: I will indulge to a point.
Ms Low Yen Ling: Thank you, Mr Speaker. The plan was completed in March 2022, just last year, with a $1.36 million of grant disbursed for a duration of 2016 to 2022. Amongst the eight initiatives under the hotel productivity plan, one of them is to proliferate shared services at the group level.
STB has exceeded the KPI in this initiative. I will not bore you with the details but I will highlight how it has done so. It embarked on more than 40 projects at group level to encourage our hotels to develop centralised systems in areas like IT, HR, property management, customer management, and also to adopt shared services such as group level branding and marketing. And in so doing, to raise the productivity such that we can create better well-paying jobs for Singaporeans.
Mr Speaker: Mr Perera, a quick one, please.
Mr Leon Perera: I will keep it to two and I thank you for your indulgence, Mr Speaker, Sir. First, to confirm my understanding, the NPF, if I read the Minister of State correctly, only funds other Government agencies and programmes. It does not give funding directly to TACs or to companies.
The second supplementary question is, would the Ministry commit to making available clear statements online of what the NPF activities are, what its goals are, what its priorities are, based on the research that it is doing and to make this available to the members of the public?
Ms Low Yen Ling: Mr Speaker, I will also keep it short.
Mr Speaker: Yes, please.
Ms Low Yen Ling: I want to thank the Member for his two supplementary questions. The NPF is available for the Ministries and agencies to tap into to spearhead productivity enhancement projects and CET that will benefit the TACs and the sector. In a way, the TACs and the companies are tapping on the funding as well.
For the second question, as our companies and workers benefit from a wide range of schemes, in addition to the NPF, the various schemes are also subject to scrutiny. I want to assure him that within the NPF, we regularly monitor the progress of the project that is funded by NPF to ensure they meet project level targets. For example, the hotel productivity plan I shared. And that is just one initiative. We will monitor how they have met the targets and the KPIs, item by item, such as number of firms or individuals who benefited from the projects.
I also want to assure him that MTI economists also conduct regular studies to examine the individual impact of key schemes under NPF.
Ministry of Trade and Industry
2 March 2023