Candidate No : 285835

What actions should SkillsFuture Singapore take to address the low incidence of individual
upskilling/lifelong learning of Singaporeans?

Executive Summary
SkillsFuture Singapore (SSG) has noted a low incidence of take-up rates of SkillsFuture Credits,
an upskilling/training subsidy of up to S$1,500 for eligible courses. There is an underlying
concern that the low take-up rates may reflect an underlying issue on the lack of
upskilling/training, as well as lifelong learning efforts on Singaporeans, impacting Singapore’s
ability to meet with the evolving needs of the economy.
In this policy memo, the profile of human capital in Singapore, role of SkillsFuture, and
challenges of identifying the right metrics to measure lifelong learning is explained, together
with why utilization of SkillsFuture Credit use can be seen as a viable proxy metric. Possible
reasons on its low take-up is also assessed.
Impacts of four policy options (Status quo, sunset provision for opening SkillsFuture Credits,
facilitating markets through improving user access to upskilling/training information, and
increasing the size of the market through accreditation of overseas training) is detailed in the
following section through the categories: 1) economic efficiency: accounting for the long-term
value of a skilled labour force (underlying interest) with SkillsFuture Credit take-up rates as a
proxy metric; 2) administratively feasibility, taking into account operational resource
constraints; 3) political feasibility; and 4) equity in the ability to benefit a wide spectrum of
stakeholders (labour force by age group).
It is assessed that facilitating markets through improving user access to upskilling/training
information would be the most appropriate policy option to be adopted by SSG, balancing the
considerations in the 4 categories above.

Introduction
In Singapore, the integration of human capital development is deeply ingrained in government
policy. In the 2015 Budget Speech, the development effort ‘SkillsFuture’ was mooted as a
mechanism to spur lifelong learning as part of Singapore’s next phase of development,
empowering each Singaporean to develop the skills and mastery needed at each stage of their
career to meet the evolving needs of the economy (Shanmugaratnam, 2015). Subsequently, the
establishment of a new statutory board – SkillsFuture Singapore (SSG) was announced a year
later following a Second Reading in Parliament (Ministry of Education, 2016). SSG operates
under the Ministry of Education (MOE), to drive and coordinate the implementation of
SkillsFuture, taking over functions performed by the Singapore Workforce Development Agency
(WDA), as well as absorbing the Council for Private Education, an existing statutory board under
MOE (Ministry of Manpower, 2016).
SSG implements various initiatives geared towards employers (enterprise transformation grants,
advisory for small and medium enterprises, work-study programmes for employees at work
certificate, diploma, and degree levels), training providers, students, as well as individuals in all
stages of their career. Of the latter, a subsidy (SkillsFuture Credit) has been introduced to
encourage personal ownership of skills development and lifelong learning to subsidize
SkillsFuture Credit-eligible courses. SkillsFuture Credits are implemented in three phases
(SkillsFuture Singapore, 2023):
i) SkillsFuture Credit: All Singaporeans aged 25 and above will receive an opening
credit of S$500, which does not expire;
ii) SkillsFuture Credit top-up: All Singaporean aged 25 and above as at 31 December
2020 will receive a S$500 credit top-up, which expires on 31 December 2025; and,
iii) Additional SkillsFuture Credit (Mid-Career Support) : All Singaporeans aged between
40 to 60 as of 31 December 2020 will receive a S$500 credit top-up, which expires on
31 December 2025.
While the above policy mechanism represents a potential subsidy of up to S$1,500 for each
Singaporean individual to enrol in skills development, training and lifelong learning; as of
September 2023, 7 in 10 eligible Singaporeans have not used any SkillsFuture Credits. In
addition, across age groups, more than 8 in 10 eligible Singaporeans aged under 30 have yet to
use these credits (Lim and Yang, 2023).
This memo is intended to explore the incidence of self-driven human capital development for
career aged individuals in Singapore, the role of SkillsFuture Credits – both as a mechanism to
scale up upskilling/training levels of Singaporeans, as well as a metric to assess lifelong learning,
causes for the low take-up, policy assessments and recommendation to address it.
The profile of human capital, SkillsFuture, and metrics measuring lifelong learning efforts
The lack of natural resources in Singapore places a strategic importance in the scaling up of
human capital, and the need for lifelong learning initiatives to meet the evolving needs of the
economy (Kumar, 2004). The annual government budget for education is significant, ranking
third (S$14.6 billion), behind defence (S$18.0 billion) and health (S$16.9 billion) (Raguraman,
2023). The results are evident - Singapore ranked top in the recent triennial (2022) Programme
for International Student Assessments (PISA) (OECD, 2023), a key metric for academic
excellence. The Ministry of Manpower’s 2022 Labour Force Report also notes a much higher
share in tertiary qualifications in the resident labour force (61.9% in 2022), compared to a
decade ago (48.1% in 2012). However, within the same report, a significant number of the
labour force (29%) indicated that they ‘did not consider the need for training and/or are already
satisfied with their current skills and knowledge’.
Overall, while the above represents a high technical/knowledge base in Singapore’s labour
force, metrics with respect to lifelong learning and continuous training are generally lacking (Lim
et al, 2023). Following SSG’s creation in 2016, with SSG maintaining a directory of accredited
courses that Singaporeans can take up, the takeup of SkillsFuture Credits can be seen as a viable
proxy metric of the extent of training, upskilling and lifelong learning for Singaporeans, as
subsidies generally would lower barriers to entry.
Possible reasons for the low take up of SkillsFuture Credits
Disregarding further analysis into the mixed policy intent of SSG (academia/vocation/general
lifelong learning) and the sociocultural preference towards academia over vocational training
(Tan, 2016), of the several reasons for the low take up of SkillsFuture Credits, one could be
attributed to, in particular, the lack of meaningful information and ease of access for users,
relative to training providers, leading to information asymmetries, and a suboptimal level of
credit use. SSG had alluded to difficulties in accessing such credits, and its Chief Executive Tan
Kok Yam had also mentioned that too many courses made hampered selection (Lim and Yang,
2023). A low conversion rate could also be indicative of the low effectiveness of user experience
(Garrett, 2011) in navigating the range of SkillsFuture Credit-eligible courses. A closer look in the
courses landing page (MySkillsFuture, 2023) reveals 62 different areas of training, with topics
ranging from academics (education & training), high value technical (aerospace, engineering,
pharmaceutical & biotechnology, oil & gas), vocational (domestic cleaning, electricity/gas & air-
conditioning), to personal development (language skills). A selection into the category
‘Accounting, Banking and Finance’ reveals more than 900 courses, with more than 200 full-time
courses lasting a month or less. The amount of effort needed to find any appropriate course in
question impacts informed decision making for eligible Singaporeans in the use of SkillsFuture
Credits. This is also alluded to in a 2020 survey, with the complexity of credit use being
mentioned by 12.5% of respondents who have yet to utilize their SkillsFuture Credits, as a
barrier to participation, and the lack of any recency effect leading a one respondent unable to
recall with certainty if his/her SkillsFuture Credits had even been used (Kim et al, 2021).
Rent seeking behaviour, while uncommon, can also be seen as a key risk, particularly in the
disbursement of funds to training providers from the government through Singaporeans
utilizing SkillsFuture Credits. With SSG making the decision over which courses are SkillsFuture
Credit eligible, the volume of such courses, and the huge challenges of monitoring its
implementation; rent seeking, such as fraud and abuse, become major risks to the integrity of
the initiative, which could potentially impact trust and uptake of SkillsFuture recognized
courses. In 2016, WDA warned the public of a training organization offering vouchers in
exchange for individuals signing up for courses (The Straits Times, 2016). Separately, SkillsFuture
became the target of a criminal syndicate in one of the biggest cases of defrauding a public
institution (S$39.9 million), using a network of bogus business entities to make fraudulent
claims of courses having been conducted (The Straits Times, 2017). The continuation of the case
till 2023 (Lam, 2023) remain significant pain points causing financial loss and reputational
damage to SSG, with concerns over possible systemic abuses to the system (Woo, 2018).
Practical reasons have also been mentioned, with the lack of time mentioned in a 2020 survey
by more than half (59%) of the respondents perceiving its as a barrier towards their utilization
of any SkillsFuture Credits (Kim et al, 2021). However, any policy recommendation to address
this barrier would most likely be beyond the remit of SSG.
A less well-researched issue is that the metric of SkillsFuture Credit take up rates will not
measure the incidence of Singaporeans taking up training in non-SkillsFuture Credit
eligible/accredited courses. The Ministry of Education has acknowledged that most overseas
courses are not included in the SkillsFuture directory, mainly due to operational difficulties in
audits/quality assurance checks (Ministry of Education, 2016).
Policy goals
With the increase in take-up rate of SkillsFuture Credits (from the existing 3 in 10) be regarded
as the primary goal (economic efficiency), the assessment and subsequent recommendation of
potential policy levers should bear the following considerations:
1. Economic efficiency – an assessment of benefits from the long term value of a skilled
labour force (underlying interest) evolving with industry needs, with take-up rate of
SkillsFuture Credits as a proxy metric;
2. Administratively feasible – an assessment on whether any adjustment to existing policy,
or new instrument applied can be easily and effectively implemented, taking into
account operational resource constraints in SSG;
3. Politically feasible – an assessment of the likelihood of policy implementation; and,
4. Equity – Ability to benefit a wide spectrum of stakeholders (labour force by age).
Policy analysis
Current approach (i.e. Status quo) – There is no existing policy aimed at increasing the take-up
of SkillFuture Credits. Figures of utilization of the credits in past years are as follows:
2018: 146,000 Singaporeans
2019: 156,000 Singaporeans
2020: 188,000 Singaporeans
2021: 247,000 Singaporeans
2022: 192,000 Singaporeans
Much of the increases in 2020 and 2021 would be attributed to the pandemic (Cheng, 2022),
coinciding with citizen unemployment rates rising from 3.3% in 2019 to 4.2% in 2020 (Ministry
of Manpower, 2023), and with the pandemic possibly according additional free time for
upskilling/training. However, moving forward, in terms of economic efficiency, status quo will
mean that numbers are unlikely to improve; and whilst the expiry of some SkillsFuture Credits in
FY2025 will mean government savings from unaccrued expenditure, the opportunity costs from
the loss of benefits from Singaporeans upskilling will likely have a much larger impact. This
status quo is administratively feasible, with little to no additional resources needed. In terms of
political feasibility, the status quo approach generally places little to no burden to Singaporeans.
Sunset provision for opening SkillsFuture Credits - The opening credit of S$500 for all
Singaporeans aged 25 and above currently has no expiry date. However, a regulatory decision to
introduce a sunset provision (similar to the top-up and mid-career support which already have
an expiry in December 2025) may spur younger Singaporeans to use the credits before it
expires. On economic efficiency and equity, this approach only impacts a small segment of
young Singaporeans (25-29, 8% of resident workforce) (Ministry of Manpower, 2023) presenting
viable opportunities for reskilling and pivoting to new career paths. There is no benefit towards
older workers. In terms of administrative and political feasibility, it is unlikely to place any
additional burden, except possible pushback from young Singaporeans who may prefer some
flexibility over when to use their SkillsFuture Credits.
Facilitating markets through improving user access to upskilling/training information – This
approach calls for a refresh of the course landing page, currently split across too vast an array of
areas of interest to provide meaningful information, and facilitate decision making. A more user-
driven approach, triangulating the needs/interests of users (academia, vocational, personal
development, etc.), age profiles, integrated with SSG’s identified industry demands (SkillsFuture,
2023), and then identifying key training areas would likely facilitate decision making on training.
While there will be some costs accrued, it is expected to be administratively feasible, with high
equity benefitting all age profiles, and a likelihood to drive economic efficiency through
increased take-up rates. In terms of political feasibility, this option generally places little to no
burden to Singaporeans.
Increasing the size of the market through the accreditation of overseas training that could be
SkillsFuture credit eligible – However, the challenge in monitoring/auditing overseas courses,
providing assurance of their quality, and preventing rent seeking behaviour will likely cause
significant operational difficulties, rendering it administratively unfeasible. It will also be
inappropriate to outsource such functions to non-government entities, given the risks. If the
accreditation of overseas training was implemented however, the economic efficiency and
equity benefits are likely to be significant, as it means subsidies across a much wider range.
Also, the take-up rate of SkillsFuture Credits will evolve to become an even better metric in
measuring the incidence of upskilling/training, benefitting Singaporeans across all age groups.
Recommendation
In the Annex, the assessment of the policy levers and their estimated impacts are summarized.
The status quo approach will not maximize the long-term benefits of the upskilling/training of
Singaporeans. The incidence of upskilling/training is likely to be affected by economic
conditions. Neither will a sunset provision for opening SkillsFuture Credits, even though it is
administratively and politically feasible.
Increasing the size of the market through the accreditation of overseas training will have strong
economic efficiency and equity benefits. However, there will be significant operational
difficulties, given limited capacities in auditing such programmes, and inability to deter rent
seeking behaviour.
Overall, facilitating markets through improving user access to upskilling/training information
would most effectively bring about the economic efficiency and equity benefits, balanced with
operational, political feasibility considerations.

End
(word count: 2312)
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Annex
Impact categories Status quo Sunset Facilitating Increasing
provision for markets through size of
opening improving user market
SkillsFuture access to through
Credits upskilling/training accreditation
information of overseas
training
Economic efficiency – long
term value of skilled labour
Low Low High High
force evolving with industry
needs
Administratively feasible –
accounting for operational High High Medium Low
resource constraints
Equity Benefits to
young working Low High High High
Singaporeans
Benefits to
mid-career Low Low High High
Singaporeans
Benefits to
older working Low Low High High
Singaporeans
Politically feasible High Medium High High