Foreign Labour Curbs: Should We Just Take The Hit?

In the Straits Times [18 Oct. 2014] “Foreign worker curbs could hit Singapore’s growth and competitiveness: IMF”

Productivity for Singapore means local companies must find ways to use innovation, training and technology to increase output. A high reliance on cheap unskilled foreign labour, foreign talent and multi national corporations (MNCs) is unsustainable.

The only viable solution for Singapore is to rely on improving the productivity of our local SMEs. Instead of complaining about the shortage of cheap unskilled foreign workers and other challenges; SMEs should think of alternatives.

Knowing how to use contracts can help the SMEs increase output. They can take advantage of at least 3 types of contracts which can enhance productivity :

1. Consortium Contracts
To reduce time and cost, local companies can consider consortiums with technology companies. This will reduce the time and cost of developing the actual technology. If companies learnt to negotiate such contracts, they can accelerate their deployment of the technology into their businesses.

2. Licensing Contracts
Instead of acquiring and developing a certain technology, a faster and cheaper way is to license the technology from companies who have already developed the technology. This is like “renting” the technology.

3. Outsource Service Contracts
Where the work does not require a physical person to be based in Singapore, companies can outsource in parts or in whole the work to foreign companies by using outsourcing service agreements. Such service agreements can be tweaked to have disputes resolved using Singapore laws as a reliable standard.

Visit for more information on the contracts.