Skills Mismatch and
Information and
Communications T echnology
Manpower Shortage in
Singapore
Eng Seng CHIA, Aaron Joon Wai LIM, Jin
Jia CHAN,
Jakkarin SAE-TIEW, Wei Xiang TAN, Chi
Shien TAY
National University of Singapore
1 Engineering Drive 2 $117576 Singapore
Tel: +65 65166431
Email: aaron_chia@nus.edu.sq
Introduction and background: Over the
past few years, the global Information and
Communications Technology (ICT) industry
saw a boom. In a short span of time,
Singapore’s ICT sector revenues grew,
hitting S$175.8 billion in 2016, double that
of 2011. In the fourth quarter of 2016, the
sector saw a 30% year-on-year increase in
the number of ICT jobs available. Singapore
with her goals to become a Smart Nation
and Technopreneur Hub faces a challenge -
a lack of ICT labour where Singapore’s ICT
sector currently faces a job vacancy of 10%,
a figure which is projected to rise to 20% by
2030. To meet the shortfall in labour,
Singapore has relied on foreign ICT labour
as a temporary measure. However, this stop-
gap measure is contrary to the aims of the
Singapore Government, to develop a
“Singaporean Core”, an economy mainly
driven by locals and supported by
foreigners. This research aims to explore the
dilemma of balancing economic growth and
achieving domestic labour goals through
systems modelling of the Singapore ICT
sector’s labour market and propose effective
policies to achieve the both economic and
labour goals.
System Archetype: We first establish the
interdependencies of the key variables and
identify the system archetype at play in
Singapore’s ICT labour market in the form
of Causal Loop Diagrams (CLDs). From our
CLDs, we notice a conflict between the
short-term interests of firms and the long-
term projected ICT industry envisioned by
the Singapore government. Firms want to
quickly resolve their labour crunch by hiring
the more readily available foreign labour
while the Singapore government hopes to
strengthen the “Singaporean Core” and build
a strong domestic ICT labour force. We
identify that the current heavy reliance on
foreign ICT workers is an unsustainable
solution in the long term as it depresses ICT
wage growth and subsequently the growth of
domestic ICT workforce, exacerbating the
manpower deficit. The causal loop diagram
is shown in Figure 1.
J Loop Diagram
Figure 1. Causal Loop Diagram of Model
Model: With a model period of 2009 to
2030, our stock-flow model was built with
four key sectors: Population of ICT Students
and Graduates, Domestic ICT Workforce,
Foreign ICT Workforce, and ICT Jobs and
Wages. This time frame was chosen to avoid
the skewing of data by the 2008 subprime
mortgage crisis and 2030 was a common
milestone for many official papers.
Model Validation: To test the fidelity and
robustness of our model, we adopted the
following validation methods: Comparison
to Historical Data, Perturbations in
Exogenous Factor, and Extreme Condition
Testing. Through our model testing, we
found our model to reflect historical trend (<
2% error) and behave as expectedly under
various conditions and is thus robust.
Sensitivity Analysis: To identify the key
leverages to decrease the ICT labour deficit,
sensitivity analyses were performed and the
most effective way was identified to address
the ICT labour deficit in Singapore: increase
the number of university graduates through
university education, and increase the intake
of foreign workers. However, increasing the
intake of foreign workers is contrary to the
local government’s goal of a “Singaporean
Core”, hence foreign labour intake needs to
be held constant.
Results and Conclusion: Using sensitivity
analyses, we found the highest points of
leverage in the system, University
Admissions and Skills Upgrading courses.
Armed with this knowledge, we propose
policies to tackle these points of leverage.
Our policy improvements are namely to
expand the number of places in ICT related
courses in Local Universities, as well as to
develop more extemal skills upgrading
avenues. The combination of these two
policies would, as shown by our model
predictions, be able to mitigate Singapore’s
growing labour deficit, curbing job
vacancies in the ICT sector from the current
10% to 5% by 2030.
After simulations, we found that Singapore’s
universities have to enroll a total of 5,190
ICT students while 5,000 of the non-ICT
workforce have to attain ICT skills through
other skills acquisition means to achieve the
5% vacancy target. To achieve such
numbers and capitalise on the high-value of
ICT, the Ministry of Education and skills-
upgrading organisations such as SkillsFuture
Singapore have to accept and advocate the
large-scale supply-side changes needed to
bolster the ICT industry. The chart below
(Figure 2) shows the comparison of the
simulation results. The dotted graph
represents the current predicted trend of ICT
job vacancy rate, while the green graph
represents the predicted trend with our
recommendations implemented. The chart in
Figure 3 shows trends the ICT workforce,
jobs, and job vacancies.
el Combined Policies - Results
0.00 525 10.50 15.75 21.00
Year
~ - - (BASE) Job Vacancy Rate
se Job Vacancy Rate GOAL
—— (With Combined Policies) Job Vacancy Rate
Figure 2. Results
Projected Mode! with Combined Policias Test Run (2009 - 2030)
Year
— Tolal ICT Workforce
— Foreign ICT Workforce
— Actual ICT Jobs Available
— Domestic ICT Workforce
“ICT Labour Deficit (Job Vacancios)
Figure 3. Projected Model
