Productivity: Singapore's secret to success that goes beyond fighting corruption

Singapore held a pompous and colorful parade to mark the 60th anniversary of its initially not very cherished, but now particularly successful independence.

Most Ukrainian commentators believe that the main reason for this success is the firm hand of Lee Kuan Yew, the nation's founding father, particularly in rooting out corruption. This factor is certainly important in the context of the world's highest economic freedom. But eradicating corruption, while a necessary condition for economic prosperity, is not a sufficient condition.

Let's not forget that 85% of economic growth depends on the growth of total factor productivity. Which, in turn, according to the World Bank, requires first investment, then infusion of advanced approaches, and then innovation.

Let's focus on the second part – infusion, as it is the least understood in society.

"Singapore's interest in productivity goes back to the early days of independence," according to Productivity Movement in Singapore. The first step was the creation of a productivity department within the government's Economic Development Board (EDB) in 1964. In 1967, the National Productivity Center was established under the DED .

Despite more than 15 years of efforts to increase labor productivity, Singapore's leadership believed that the country was still far behind other countries. In 1979, Prime Minister Lee Kuan Yew was concerned: "Workers here are not as proud of their work or as skilled as the Japanese or Germans.".

In early 1981, Lee Kuan Yew met with key Japanese employers in Singapore to discuss practices, attitudes and productivity in Japan. A Productivity Committee was immediately set up in Singapore to study the productivity movement in Japan and to explore improvements in productivity, work attitudes and employee relations.

In June 1981, Lee Kuan Yew met with the chairman of the Japan Productivity Center (JPC) and was firmly convinced of the need for a productivity movement. The Singapore Productivity Committee produced a report that emphasized the importance of the "human dimensions" or mindset change, and proposed the establishment of a high-level council to review productivity efforts and determine future strategy.

On the basis of this proposal, the National Productivity Council (NPC) was established in September 1981 as an oversight and policy coordination body for the Productivity Movement. The NPC was chaired by the Minister of State for Labor (since 1986, the Minister of State for Trade and Industry) and included senior representatives of the government, employer groups, labor unions, and academia.

A broad Productivity Movement was launched, which developed in three stages: awareness (1981-1985); action (1986-1988); and ownership (1989-1990s).

The goal of the awareness-raising phase was to create a broad understanding of the importance of productivity among companies and the workforce. The focus was on building positive attitudes and promoting teamwork, recognizing and rewarding successful companies and individuals.

Throughout all stages of awareness-raising and action, the strong commitment and leadership of Prime Minister Lee Kuan Yew has been crucial. Large-scale productivity campaigns have been launched at both the national and corporate levels. November was declared "Productivity Month," during which Lee Kuan Yew delivered annual productivity speeches for seven consecutive years since 1981 .

Moreover, NPC made a significant effort to spread the spirit of productivity among the public. They created a symbolic mascot named Teamy, which was a tiny, cute bee character. This Teamy Bee symbolized hard work, teamwork, and efficiency.

The slogan and posters of the productivity campaign were created in 1982 around the key message "Together we work better." This message was political. The slogan was intended to create a virtuous cycle, such that: increased productivity would lead to business and economic growth, which would generate more consumer demand for products; it would bring satisfaction to people and more work to workers; and it would lead to increased well-being of people, including workers.

A Harvard Business School Singapore Inc. case study tells about "launching the motivational song 'Good, Better, Best' on the radio, printing slogans like 'Come on, Singapore – let's all do a little more' before establishing a quality control college. The NPC has worked hard to emphasize the importance of productivity to the country and its workforce. Trade union leaders have taken a mandatory module on "total factor productivity," according to Harvard Business School, and it impressed me greatly – I want to live to see the time when Ukrainian trade union leaders take such a module.

In the 2000s, the government stepped up its efforts, setting an aggressive target of 4% annual growth in total factor productivity to meet the 7% GDP growth target.

In April 2002, to complement the country's transition to a knowledge-based economy, SPRING (the Standards, Productivity and Innovation Council, successor to the NPC) repositioned itself to promote additional innovation as an engine for future productivity growth. Its CEO emphasized: "We need to move from an efficiency city to an innovation nation.".

According to research by the International Labor Organization, the highest labor productivity in 2024 was in Luxembourg – $166 per hour, in Singapore – $97, in Western Europe – $84, in the United States – $82, in Germany – $81, in Japan (which originally taught Singapore) – only $53.

In Ukraine, according to the same studies, labor productivity was $15 per hour in 2021.

Now a question. Realizing that the issue of productivity is not even being discussed in Ukraine by government officials or analysts, we are 60 years behind Singapore or only 45 years behind?

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