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[h=2]Tightening inflow of foreign workers is long overdue[/h]
October 28th, 2012 |
Author: Contributions
[Letter has also been submitted to SPH and MediaCorp]
I refer to “Govt
may further tighten inflow of foreign workers“.
This move is long overdue.
Previously, Singapore’s SMEs and MNCs have been overly reliant on cheap
foreigners to improve their bottom-line. There is no job creation opportunities
for Singaporeans.
For example, Changi Business Park tenants such as DBS, Standard Chartered,
UBS, CitiBank have been employing low cost computer engineers and systems
analysts from India on EP who only earn S$1700 per month. In fact, most of the
canteens and food courts there have been selling Indian food to cater to their
taste buds.
In July 2012, Parkway Novena Hospital opened a 300 bed hospital in Central
Singapore. It didn’t necessarily translate into job creation for Singaporeans.
In fact, when I applied to Parkway for a position as a laboratory technologist,
the HR preferred to hire Philippines as they are deemed to be more ready to work
night shifts because the night shift allowance is more lucrative.
Where is the job creation aspect to Singaporeans?
Most of Singapore’s business models continue to be low cost, cheap labour to
improve their bottom lines, rather than cutting-edge breakthrough innovations
that could be top contenders for the coveted Nobel Prizes.
I believe that the key answer lies not in just giving grants, subsidies and
tax breaks to companies but through regulations and increasing better standards.
MOM has thus gone into the right direction by raising the standards.
The theory between government regulation and innovation was first expounded
by a Harvard Professor Michael Porter in 1991. He asserted that ‘appropriately
planned regulations from government will stimulate technological innovation,
leading to reduction in expenses and improvements in quality’.
There is truth behind this ‘Porter Hypothesis’ and has been proven by real
case examples. For example, in the 1970s, catalytic converters were ordered to
be installed in America-made cars in an attempt to clean up the smog in
America’s polluted air environment and reduce emissions.
Initially, American businessmen complain and lobby against such regulations
because this will increase the costs of their manufactured cars and might make
them less competitive than other cheaper cars made from other countries.
However, the businessmen usually underestimate the role of innovation. Strong
regulation from government always spurs innovation from companies. A strong
regulation eliminates uncertainty and provides a powerful competitive incentive
for companies and their suppliers to innovate to radically reduce costs.
As a result, companies such as General Motors and Ford were able to meet
these new catalytic converters standards to compete internationally and their
fears of being out-priced by other countries’ car models were unfounded.
Clear price signals and regulations always create an environment more
conducive to innovation. When we have the best research institutes, the best
educated engineers and people, Singapore should want higher standards because
companies can meet these standards through innovation while weaker ones
cannot.
Properly crafted regulations will give a two-for-one kick – they can improve
both the competitiveness of a firm and a nation
Giving tax grants and incentives would indirectly weaken our standards which
would only enable lower-efficiency, lower-cost Chinese or India products to
compete with Singapore products and services.
.
Edmund Lim
[Letter has also been submitted to SPH and MediaCorp]
may further tighten inflow of foreign workers“.
This move is long overdue.
Previously, Singapore’s SMEs and MNCs have been overly reliant on cheap
foreigners to improve their bottom-line. There is no job creation opportunities
for Singaporeans.
For example, Changi Business Park tenants such as DBS, Standard Chartered,
UBS, CitiBank have been employing low cost computer engineers and systems
analysts from India on EP who only earn S$1700 per month. In fact, most of the
canteens and food courts there have been selling Indian food to cater to their
taste buds.
In July 2012, Parkway Novena Hospital opened a 300 bed hospital in Central
Singapore. It didn’t necessarily translate into job creation for Singaporeans.
In fact, when I applied to Parkway for a position as a laboratory technologist,
the HR preferred to hire Philippines as they are deemed to be more ready to work
night shifts because the night shift allowance is more lucrative.
Where is the job creation aspect to Singaporeans?
Most of Singapore’s business models continue to be low cost, cheap labour to
improve their bottom lines, rather than cutting-edge breakthrough innovations
that could be top contenders for the coveted Nobel Prizes.
I believe that the key answer lies not in just giving grants, subsidies and
tax breaks to companies but through regulations and increasing better standards.
MOM has thus gone into the right direction by raising the standards.
The theory between government regulation and innovation was first expounded
by a Harvard Professor Michael Porter in 1991. He asserted that ‘appropriately
planned regulations from government will stimulate technological innovation,
leading to reduction in expenses and improvements in quality’.
There is truth behind this ‘Porter Hypothesis’ and has been proven by real
case examples. For example, in the 1970s, catalytic converters were ordered to
be installed in America-made cars in an attempt to clean up the smog in
America’s polluted air environment and reduce emissions.
Initially, American businessmen complain and lobby against such regulations
because this will increase the costs of their manufactured cars and might make
them less competitive than other cheaper cars made from other countries.
However, the businessmen usually underestimate the role of innovation. Strong
regulation from government always spurs innovation from companies. A strong
regulation eliminates uncertainty and provides a powerful competitive incentive
for companies and their suppliers to innovate to radically reduce costs.
As a result, companies such as General Motors and Ford were able to meet
these new catalytic converters standards to compete internationally and their
fears of being out-priced by other countries’ car models were unfounded.
Clear price signals and regulations always create an environment more
conducive to innovation. When we have the best research institutes, the best
educated engineers and people, Singapore should want higher standards because
companies can meet these standards through innovation while weaker ones
cannot.
Properly crafted regulations will give a two-for-one kick – they can improve
both the competitiveness of a firm and a nation
Giving tax grants and incentives would indirectly weaken our standards which
would only enable lower-efficiency, lower-cost Chinese or India products to
compete with Singapore products and services.
.
Edmund Lim
