SINGAPORE (Aug 5): The pilot plan unveiled on July 30 to help technology companies in Singapore hire tech talent from abroad signals a “fine-tuning” of the city state’s labour policy to address local talent shortage in specific tech fields, say economists. The programme will alleviate concerns over talent shortage for MNCs that want to set up shop in Singapore and help start-ups expand in the region.
“The reality is that Singapore lacks the local tech talent pool to grow the tech ecosystem. There are just not enough local experts in areas such as data science, cybersecurity or artificial intelligence (AI),” says Maybank Kim Eng senior economist Chua Hak Bin.
The plan came just a day after Minister for Trade and Industry Chan Chun Sing said that Singapore has to do more to compete for global talent. In a speech at a scholarship presentation ceremony, Chan pointed out that while Singapore needs to grow local talent, it needs to woo global talent as aggressively as other markets are doing.
For example, the French government is luring tech companies to invest in the country with lucrative tax breaks and French Tech Visas for entrepreneurs. Chan says that, as these companies grow here, they will create new opportunities for Singapore businesses and workers.
The ongoing US-China trade spat and US protectionism may provide an opportunity for Singapore to capitalise on the global talent pool. “With the US [increasing] restrictions on immigration and foreign workers, Silicon Valley may be forced to shed foreign talent as [US President Donald] Trump tightens on foreign investment and immigrants. Singapore should step up and open its doors wider to attract such foreign talent,” Maybank’s Chua says.
Called Tech @ SG, the pilot scheme, jointly launched by the Economic Development Board (EDB) and Enterprise Singapore, will facilitate the employment pass applications of “core team members” of certain technology companies, particularly those that operate in areas such as digital, medtech, biotech, cleantech, agritech and fintech. The Edge Singapore understands that these companies include those that have high potential for growth and possess a good funding track record.
The teams that these companies here are expected to hire include those with so-called frontier technology skills such as in data science, AI, cybersecurity and the Internet of Things. There will reportedly be some flexibility in employing these individuals. For instance, skills in deep tech may be considered in place of academic qualifications.
Economists say the new scheme is an extension of Singapore’s long-standing quest to attract highly skilled tech workers and tech companies to the country. Some previous schemes were seen as limited in their reach and burdensome with too many criteria. Tech @ SG may offer greater certainty for tech companies that want to be based here.
“I think in the past, even when big, international tech companies wanted to hire in Singapore, the Employment Pass application process was laborious and took a long time. But in this case, EDB will essentially have the right to guarantee that core team members will get the EPs. There is no uncertainty about not being able to hire foreign talent,” Chua says.
CIMB economist Song Seng Wun notes that the move comes at a time when Singapore is experiencing an economic down cycle. “Growth today will come from modern services. We have to create schemes that promote that environment,” he says. “If you look at [Tech @ SG], it is about recalibration of schemes to make it easier for some sectors [that are earmarked for growth].”
Some entrepreneurs tell The Edge Singapore that the pilot plan will benefit start-ups looking to scale. “The talent crunch situation [especially in engineering] here is bad. The number of people coming out of university with a strong interest in engineering and programming is low and every sector, from the banks to Grab, is going after them,” says Hari Sivan, founder of fintech start-up soCash.
On the other hand, fintech start-up Finaxar grew its headcount from 20 to 60 this year. A scheme such as Tech @ SG would have helped the company bring over some core members to Singapore, says Tan Sian Wee, co-founder of Finaxar. “The problem we had was the salary requirement. But now, with the new scheme, that could dramatically open things up for any start-up looking to scale,” he says.
He, however, points out that manpower costs in Singapore are still prohibitive. He says there is a greater diversity of candidates with better skills in a larger market such as India for a third of the salary he would have to pay in Singapore. Today, a part of its core tech team is based in India.
