How Do Nations Increase Workforce Skills? Factors Influencing the Success of the Singapore Skills Development System

Abstract

This article contributes to the partial resolution of the debate regarding the role of governments in leading national upskilling efforts through a descriptive case study of the Singapore system of skills development. The article identifies the major reasons behind Singapore's remarkable success in upgrading workforce skills in a relatively short period of 40 years. First, a general linkage between economic development needs and skill formation and development has been facilitated by an institutional structure that places the Economic Development Board (EDB) at the centre of the effort with responsibility for both areas. We argue that this general linkage is a necessary but insufficient condition for rapid skills upgradation. Second, the EDB's model of technology transfer, which over a period of time brought about the integration of three crucial aspects, that is, linking foreign direct investment to skills development and joint government-private sector operation for skills training, was crucial in the ability of the economy to meet its short- and medium-term skills development needs. Third, educational reform for long-term skills development, fourth, a levy/grant scheme (the Skills Development Funds) that induced private sector firms to invest in upskilling, and fi nally, the institutional linkages across different skills-development institutions and initiatives which further ensured the effectiveness and relevance of upskilling programmes, that is, the interconnectedness of the various parts of the system, were crucial elements in the success of the Singapore effort. In sum, Singapore's system is consistent with the notion of a concerted national effort. Given that several nations have indicated their desire to copy selected aspects of the Singapore system (for example, Skills Development Funds) this essay cautions that it is important to understand that each component works because of the institutional context, and so cannot be transplanted independently to a different institutional context and be expected to provide the same results.