Singapore needs to seize new growth opportunities, faster than other advanced economies that the post-crisis world will present, Senior Minister of State for Trade and Industry and Education S. Iswaran said at the Singapore Economic Review Conference on Thursday.
"To accomplish this, we will need to grow Singapore-based companies with the requisite capabilities, technology and expertise, invest in the education and skills of Singaporeans, while continuing to attract foreign talent and companies, big and small, to our shores," he said.
However, for growth to be sustained, it needs to be based on sustainable comparative advantages, he said, adding that given Singapore's land and population constraints, there are limits to how much more the island-state can drive growth by merely increasing factor inputs.
He said that Singapore's growth from the year 2000 to 2008 has been largely driven by labor growth (3.9 percent) rather than productivity growth (1.4 percent).
Citing challenges ahead, he said that other resource constraints will also become increasingly binding, most notably energy. "Ensuring efficiency in this sector which has significant externalities will be a key economic challenge," he said.
He said that Singapore has improved energy intensity by 28 percent from 1990 to 2007, but added that growing concerns over global climate change, and the seemingly inexorable rise of energy cost, will require more innovative solutions to optimize our use of energy./.