Promoting SMEs and Enhancing Labor Productivity in Singapore: A Policy Analysis

While Singapore has been doing well in terms of cross-country per capita income comparisons and in terms of overall employment growth, it has been a laggard when it comes to labor productivity and this concern is more serious for small and medium enterprises (SMEs). In this context, this paper first identifies the sources of gross domestic product (GDP) growth and simulates different scenarios pertaining to the potential GDP which the economy can achieve given the level of required productivity based on some employment-growth assumptions. Further, the paper reevaluates the performance, challenges and opportunities for SMEs as well as suggests several policy strategies as to how SMEs can synergize and be more competitive moving forward.