Dissecting the 'Why' behind SkillsFuture Jobseeker Support Scheme

In the aftermath of PM Wong's first National Day Rally (NDR 2024), one topic that took centre stage is the temporary financial support for retrenched workers of up to S$6,000 over a period of six months for training, career coaching and job matching services. This segment took up about 10% of the NDR, but it was one which raised quite a few questions in my head.

PM Wong outlined 3 key challenges (powerful forces - over which we have no control) that we faced.

• Geopolitics
• Artificial Intelligence
• Climate Change

Since I write about geopolitics and climate change issues from time to time, I would focus this article instead on Artificial Intelligence (AI), and my thoughts on why AI will hit your jobs and mine swiftly, quietly and deadly.

AI and Singapore’s Employment Landscape

AI is reshaping industries worldwide, and Singapore, as a global financial and trade hub, is no exception. Our economy includes many sectors like manufacturing, financial services, information and communications technology (ICT), retail, and healthcare amongst others, where each is at varying levels of susceptibility to AI-induced disruption.

The below gives a flavour of how AI impacts the top sectors in Singapore (excluding community, social & personal services as AI is unable to replace such required services as yet), using 2023 employment data from our Ministry of Manpower and an estimate of work that could be automated by AI in Singapore (research by 高盛 estimates the global average at around 18%, and Singapore at around 24%), where we will use both figures to give a best estimate range to size the impact on jobs locally.

On a macro level, Singapore had close to 4 million jobs in 2023, where close to half of it is made up of jobs in the construction, manufacturing, wholesale and retail trade, and financial and insurance services sectors.

The construction sector employed around 526,200 workers in 2023. Traditionally, construction has been a labour-intensive industry, but AI is beginning to make inroads, particularly in areas like project management, site monitoring, and even robotics for construction tasks. AI applications in construction could automate repetitive tasks such as bricklaying and welding, or tasks that do not require complex human judgment. While the adoption of AI in construction is still in its early stages compared to manufacturing, the potential for disruption is significant as technology advances. potentially affecting between 94,700 to 126,000 workers.

Manufacturing, a cornerstone of Singapore's economy, employs approximately 485,200 people. With advancements in robotics and automation, this sector is susceptible to AI-driven changes in areas like assembly lines, quality control, and inventory management, where AI is rapidly automating repetitive tasks on production lines. Between 87,000 and 116,000 jobs could be at risk.

The wholesale and retail trade sector employed approximately 468,300 workers in 2023. AI is already transforming this sector through automation of sales processes, inventory management, and customer service. Technologies such as AI-driven checkout systems and online retail platforms are reducing the need for traditional retail roles. The trend toward automation is clear, and between 84,000 and 112,000 workers could be displaced by AI.

The financial and insurance services sector employed about 458,200 workers in 2023. AI is deeply integrated into this sector, particularly in functions like automated trading, risk management, and customer support through AI-driven chatbots and robo-advisors. Although this sector has been welcoming of AI, between 82,000 and 109,000 jobs could be displaced. This aligns with global trends where AI is increasingly handling tasks that involve data processing and customer interactions—roles traditionally filled by entry-level employees.

From the analysis above, it's evident that AI will disrupt jobs. Although I've used a broad estimate, the extent of its impact will vary across sectors. Hence, the government’s proactive measures will play a crucial role in mitigating these disruptions and supporting workers through this transition.

SkillsFuture Jobseeker Support Scheme

Recognizing the transformational potential of AI and its implications for the workforce, the government has implemented several initiatives to cushion the impact on displaced workers. Central to this effort is the SkillsFuture JobSeeker Support Scheme, which provides financial assistance of up to S$6,000 over six months (S$1,000 a month) to retrenched workers as they upgrade their skills. This is part of a broader effort to encourage skills upgrading and ensure that the workforce remains adaptable in the face of technological change.

Using just the job loss estimates from the above sectors, the financial outlay from the government is estimated to be between S$2.1 billion to S$2.8 billion, while using the global job loss estimates of 18% on average puts a ballpark outlay of S$4.32 billion across six months of training.

Although the average is only 15% of the S$28.8 billion awarded under the Job Support Scheme (JSS) for Covid-19 across 2019 to 2022 which saved approximately 165,000 jobs, I shudder to think how much support the government will have to fork out for 720,000 jobs (18% of Singapore's workforce).

Lower Cost Estimate (across identified sectors) = S$6,000 x 348,000 workers = S$2.1 billion

Higher Cost Estimate (across identified sectors) = S$6,000 x 465,000 workers = S$2.8 billion

Average Cost Estimate (across all sectors) = S$6,000 x 18% (average global job disruption) x 4,000,000 workers = S$4.32 billion

Aside from ringfencing money, it is necessary to ensure that Singapore’s workforce remains competitive and resilient in an AI-driven future. A quick look at the SkillsFuture courses show that there are around 50 AI courses with durations between 1 - 12 months that are available, and 32 (65%) of them are priced below S$6,000 after subsidies. This largely consists of Generative AI courses (e.g. prompt engineering, applied AI for media and digital communications), data science and robotics, largely at the diploma or specialist level. A further look at what SkillsFuture can offer for mid-careerists show that there are only 11 out of 24 courses, slightly less than half, that are priced below S$6,000 after subsidies, largely in the areas of sustainability, service design and HR, which may also be impacted by the AI disruption. What skills would then be needed when AI disruption hits? I will explore more in my next article.

Singapore's Role in the Global Labour Scene

Just a week before PM Wong's inaugural NDR 2024, a separate piece of news had caught my attention. In summary, our President, Mr Tharman Shanmugaratnam, was recently appointed as co-chair of the World Bank’s High-Level Advisory Council on Jobs, a new initiative that will identify actionable policies and programs to address the looming jobs crisis in the Global South. Where over the next 10 years, an unprecedented 800 million more jobs would need to be created for the 1.2 billion young people in the Global South reaching working age.

This was what he said:

“Good jobs are at the core of aspirations everywhere, but also a growing challenge in the face of rapidly advancing technologies, geoeconomic uncertainty and climate threats,” said Shanmugaratnam. “New strategies are needed to achieve sustained job and income growth among developing world populations, and the benefits this will bring for the global economy too.”

Sound all too familiar?

Overlaying PM Wong's three national challenges (geopolitics, AI and climate change) with this, it is no wonder that AI disruption is fast becoming a big concern for jobs not only in Singapore, but the Global South.

Thankfully, having President Tharman in this role positions Singapore to play a pivotal role in shaping global labour policies in the age of AI, and offers several strategic advantages.

Enhancing Global Collaboration: By fostering international cooperation on policies related to AI-driven job displacement, and advocating for frameworks that mitigate the risks associated with AI, Singapore can gain collective knowledge and experiences with global best practices, which can guide and strengthens our domestic strategies and positions us as a regional leader and knowledge broker in managing AI's impact on employment.

Leveraging Global Insights: being involved in high level global forums allows Singapore to access cutting-edge research and insights into AI’s effects on employment. By integrating these global insights into local policies, Singapore can adopt novel and innovative solutions that have proven effective in other contexts.

Attracting Private Sector Partnerships: Beyond collaboration and insights, this high signature move could align and attract multinational companies and international organizations to invest in Singapore's workforce transition. This would not only provide financial support but also bring in expertise and best practices from around the world.

We are not alone.

While our government is taking proactive steps to address AI-driven job displacement, we are not alone in facing this challenge. Several countries are grappling with similar issues and have implemented strategies that offer valuable lessons.

Germany's approach to integrating AI into its industrial sectors builds on the principles of Industry 4.0, focusing on the digitalization and automation of manufacturing processes. Recognizing the potential for AI to enhance productivity, Germany has prioritized reskilling and upskilling its workforce through initiatives like the "AI-Campus", ensuring workers can adapt to new roles requiring advanced technical knowledge. The government has also fostered strong collaboration between industry, educational institutions, and small and medium-sized enterprises (SMEs) to align training programs with industry needs and support SMEs in adopting AI technologies. This comprehensive strategy aims to maintain Germany’s competitive edge while mitigating the risks of workforce displacement.

South Korea's approach to AI's impact on the job market is centered around its Digital New Deal, which drives significant investments in AI technology, digital infrastructure, and smart manufacturing, while also focusing on workforce transition. The government has implemented robust reskilling programs, like the K-Digital Training initiative, to equip workers with AI-related skills and ensure job protection. Additionally, South Korea emphasizes AI literacy and inclusivity, offering targeted support for vulnerable groups to adapt to new opportunities. This strategy of balancing technological innovation with comprehensive workforce development provides key lessons for Singapore in managing AI-driven job displacement.

Moving Forward with AI, together

As you and I continue to navigate the challenges and opportunities presented by AI, the country’s ability to adapt (i.e. workforce capabilities) will be crucial. The government’s initiatives, while robust, must also be flexible and evolve to address the changing needs of the workforce.

Looking forward, the job market in Singapore—and indeed across the region—will likely see continued disruption from AI and other emerging technologies. However, this disruption also presents opportunities for innovation and growth. As routine jobs are automated, there will be a growing demand for roles that require creativity, strategic thinking, and advanced technical skills.

On the global stage, countries like Germany and South Korea will continue to be important benchmarks as we refine our approach. However, our unique position as a developing nation with a highly skilled workforce could position us as a regional leader to manage AI and jobs.

In future, countries might develop shared regional and international frameworks and support systems for reskilling and workforce transition. If so, Singapore can continue to serve as a testbed for forward-thinking policies to be applied with the Global South, but also in the developed economies as well.

Ultimately, while the AI revolution will undoubtedly bring challenges, it also offers the potential for significant economic and social advancement. Singapore and our workforce must be ready to navigate this transition and stay ahead of technological trends. This can not only protect our current job market but also pave the way for a more resilient and dynamic economy in the years to come.