Balancing open trade with protectionist measures is possible
Governments can be both pro-business and pro-worker by balancing open trade with protectionist measures
Now more than ever, political and social dynamics impact business.
From the 24-hour, seven-day-a-week news cycle to politicians campaigning (and even governing) in tweets, business leaders must take into account both the words and actions of government in developing their business strategy.
The language of politicians might be simpler now with the widespread use of Twitter and Facebook. However, incorporating public policy into business decisions is more complicated.
The simple sound bite "from globalism to nationalism" is far from accurate.
Indeed, it is harmful if one bases their public affairs strategy on that alone. From our perch in Singapore, we see businesses engage across multiple markets, but in a context of each government looking to simultaneously increase manufacturing and jobs in their own country.
While protectionist policies often are grounded in good intentions, countries need to realise that it is not a zero-sum game. Governments can be both pro-business and pro-worker by being open to the global market and having a complementary foreign workforce, while also looking out for their own people.
The policies being undertaken by China are a case in point. On the one hand, "Made in China 2025" has been described by the US Chamber of Commerce as "a 10-year, comprehensive blueprint aimed at transforming China into an advanced manufacturing leader".
To do this, China "appears to provide preferential access to capital to domestic companies in order to promote their indigenous research and development capabilities, support their ability to acquire technology from abroad and enhance their overall competitiveness".
At the same time, China is one of the 16 countries negotiating the Regional Comprehensive Economic Partnership (RCEP), a proposed free trade agreement which contains about a dozen chapters covering market access for goods, services and investment.
In some ways, Singapore witnessed the first wave of today's growing nationalism. Since 2010, Singapore has been under heavy pressure to limit the number of foreign workers for many of the same reasons that governments across the world are acting upon today.
In the past seven years, the Singapore government has been able to adjust to that political reality by creating programmes to ensure that businesses could still attract foreign talent, thereby enabling Singapore to maintain and grow as a regional business hub, while addressing local concerns.
Yes, businesses still face challenges in Singapore when it comes to foreign talent. In sectors such as hospitality and retail, businesses would like greater access to additional foreign workers than is available to them today. And, yes, the government still faces challenges when it comes to increasing employment immigration in this political climate.
Still, Singapore has invested substantially to get three things right.
First, investing for the future by developing industry transformation maps so that the economy can transform to meet the changing environment while producing the types of good jobs needed.
Second, transforming the workforce through its SkillsFuture initiative to ensure that Singaporeans have the skills to take on these jobs.
Third, minimising mismatches between jobseekers and businesses through the Adapt and Grow initiative, thereby making finding a job easier.
Programmes such as the Human Capital Partnership (HCP) illustrate how a government can recognise the growing sentiment of populism while understanding that countries must continue to engage and increase their commitment to global trade and integration.
Progressive employers who recognise this reality, commit to grow their business and stay competitive by investing in human capital are recognised as HCPartners and maintain access to needed foreign talent.
The community of HCPartners who invest in Singaporeans at all levels forge stronger complementarity between local and foreign manpower, showing that it is possible to create a win-win situation.
The writer is a senior adviser for McLarty Associates and former chairman of the American Chamber of Commerce in Singapore. This article was published in The Business Times yesterday.