In May this year, the chief of Singapore’s central bank said that as a global tech-enabled financial hub, Singapore will continue to depend on foreigners to fill technology roles in the finance sector over the next few years.
In laying bare the tech skill shortage in Singapore, he pointed out that since 2014, the technology workforce in the finance sector has risen 30 per cent to an estimated 25,000, but that Singapore citizens make just 35 per cent of this workforce.
He said that the overall rise in the tech headcount has created 2,200 more tech jobs for Singaporeans, but that the percentage of Singaporeans in that sector has remained stable.
Not enough Singaporeans to PME jobs? Why?
The central bank chief did not mince his words in pointing out how dire the situation was. He said that in the area of software engineering, less than 20 per cent of the vacancies from net jobs growth went to Singaporeans.
“There are not enough Singaporeans applying for these jobs in the first place, let alone qualifying for them,” said Ravi Menon, CEO of Monetary Authority of Singapore (MAS).
This problem is not going away, Menon warned. MAS estimates that 2,500 to 3,500 tech jobs will be created in the financial sector each year, over the medium term, but he claimed Singapore’s pipeline of technology graduates is not enough to meet this demand.
Singapore a FinTech Hub, 20 years in the making
Let’s be clear: the rise of Singapore as a global tech-enabled financial centre did not happen by chance. The Government set out to develop Singapore in this area over 20 years ago.
In May 2001, in addressing the ACI World Congress, Prime Minister Lee Hsien Loong (who was then the Deputy Prime Minister of Singapore and Chairman of MAS) said that he will “develop Singapore into a leading electronic financial services hub” (or in today’s language, FinTech Hub).
In these 20 years, while responding to market changes promptly, and complementing prompt reactive regulations with a forward-looking perspective, seeding innovation and attracting players in the FinTech sector, there appears to be one big element the Lee Government seems to have neglected – the growth of a competent and capable workforce to adequately fill the job vacancies that will arise from this sector.
Why enough students are not interested in fields of Engineering Sciences and IT?
Let’s look at the Census of Population 2020. In the last 10 years, graduates from the fields of Engineering Sciences and Information Technology have been falling.
If the Government knew 20 years ago that the FinTech industry is going to be a growth sector 20 years ago, why did it not encourage more undergraduates to enroll in such fields?
I will argue that with his reactionary policies and in his rush to ride the globalisation wave in making Singapore a FinTech hub, our Prime Minister may have taken the shortcut of importing large numbers of foreign manpower in place of building the capability of its own. (Let’s not forget that the Lee Government has apologised in the past for issues involving its immigration and manpower policies.)
And this has a knock-on effect which will be very difficult to fix in the near-to-mid-term.
There are several reasons why an undergraduate may not want to take up studies in these fields:
- They may feel that the fields are already dominated by foreign nationals and that they may not get a fair shake in that sector. We have heard accounts of how human resource managers from IT firms prefer to hire their own countrymen to qualified Singaporeans;
- The foreign tech talents do not transfer knowledge and skills to the locals, resulting in the locals remaining as bottom feeders in the company; and
- Unfair competition for jobs in these sectors from foreign tech talents has depressed wages so much in these fields making it unattractive to the locals.
India’s enormous tech talent
A recent report by Georgetown University’s Center for Security and Emerging Technology evaluating India’s AI capabilities emphasised that the country produces almost seven times as many bachelor’s level engineering graduates as the United States, and almost twice as many master’s level engineering graduates.
This coupled with the facts that India’s huge population produces more graduates than its economy can absorb and that the Indian government sees greater benefits from skilled migration through remittances, investments, and knowledge-sharing, means India’s tech talent diaspora is found in many first world economies that would welcome them.
And with the Singapore Government positioning our city-state as an open economy with an ecosystem which is extremely favourable to foreign talent, these Indian tech-talents were welcomed with open arms.
This could be a shortcut the Lee Government took in achieving its FinTech hub status at the expense of building its own local talents.
Sentiment against immigrant Indians, who’s responsible?
It is against this backdrop that the undercurrent of sentiment against immigrant Indians has risen and how the Singapore-India Comprehensive Economic Cooperation Agreement (CECA) came to be seen as giving Indian PMETs a free hand to come here to work.
In short, we are in this woeful state of distrust between Singaporeans and foreigners because the Lee Government, once again, seems to have put the economy ahead of its people.
After failing to put the interests of the Singaporean PMETs for so long, for over 20 years, it is grossly unfair of the PAP Government to now point the finger at other parties for fueling unhappiness against immigrant Indians.
How can we then correct this sad state of affairs and mistrust?
The management of our economic system as one that depends on the continual growth of production and consumption is no longer fit for the ever hotter, more crowded and more connected world that we already live in.
A wellbeing economy abandons the idea of eternal growth and embraces people, their wellbeing and the reliance of that wellbeing on the health of nature.
Therefore, we have to start first by relooking and reviewing all Free Trade Agreements (FTAs) because FTAs often dismantle protective clauses which safeguard small and medium enterprises, as well as local workers and unfairly benefit large multi-national corporations, government linked companies and transmigrant elite workforce.
How can we remedy the state of unhappiness and distrust?
We have to start from the place of fairness, and ensure that finance is in service of our city-state and not the other way around.
While ensuring that we remain a global city, privilege of citizenship must be accentuated in Singapore. When we invite highly skilled and talented individuals to come here both to work, live and build their families here, we must enact legislation to ensure that there is transfer of knowledge to the local workforce.
As Singapore is gearing up to be a Smart City, the need for tech talent will be indispensable for us. As such, the Government has a role to play to encourage more undergraduates to take up studies in fields like Engineering Sciences and Information Technology.
They also have to ensure that the ecosystem for their employment is attractive after they graduate.
A plea to the Lee Government to be proactive and not reactive
It is my hope that the Lee Government will take such proactive steps to ameliorate the undercurrent of sentiment against immigrant Indians, instead of pointing fingers at imaginary bogeyman to hide their shortcomings and shortsightedness.