EVEN as the Government is reining in the number of foreigners that local firms can employ, the Ministry of Trade and Industry has emphasised that they are important to the Singapore economy.

Yesterday, it outlined five key contributions of this group in its paper on population and the economy. There are currently close to a million foreign workers here.

Foreigners pave the way for new industry sectors

They allowed Singapore to rapidly grow new sectors even when there were not enough Singaporeans with skills in these areas. As more local staff were trained, they took up the jobs held previously by foreigners.

Examples: Biomedical sciences and aerospace engineering sectors.

Foreigners provide the buffer for firms to grow or downsize quickly.

Local companies were able to seize opportunities from business cycles by hiring foreigners when they were needed, and letting them go during downturns.

Examples:

  • Local shipyards captured up to 70 per cent of the global orders for oil rigs between 2007 and last year, only because they could grow their mostly foreign workforce.
  • During the downturn in 2008 and 2009, foreign worker employment plummeted while local hiring continued to grow, although at a slower pace.

Foreigners complement the domestic workforce

In jobs shunned by local workers, foreigners pick up the slack and help companies stay viable.

Example: In retail and food and beverage sectors where profit margins are typically lower than 7 per cent, consumers can end up paying more should the firms have to raise wages to hire Singaporeans if they cannot take on foreigners.

Foreigners add diversity to the workforce

When multinationals bring their research and development functions to Singapore, they boost innovation here.

Examples:

  • P&G is opening a $250 million research facility in beauty and male grooming at Biopolis next year.
  • A*Star has set up a Centre of Excellence in Advanced Packaging with American company Applied Materials.

Foreigners build Singapore's physical and social infrastructures

Besides paying more than 25 per cent of total personal income taxes which help the Government fund social spending, foreigners also build roads and Housing Board flats, and care for the elderly and sick.

Example: There are now 19,500 foreigners working in nursing homes and community hospitals. The number is set to grow as caregiver jobs do not appeal to Singaporeans.