One of the issues I have repeatedly raised in my campaign speeches this #GE2020SG has been the problem of stagnant productivity. I see poor productivity growth as the most critical economic challenge that the country will confront in the decades ahead. Why is this so important? 
Because in the long run, the only way to ensure sustainable growth in our output and incomes per capita is through improvements in productivity. But because it is a technical subject, people tend to shy away from discussions about the matter. I think that this is a mistake.
It's useful to start with some definitions. The simplest definition of productivity is output per worker. So if I can make two hammers in an hour, and my colleague only makes one, I am twice as productive my coworker. All else equal, I should be paid twice as much in wages.
But not all else is equal. The simple definitions ignores the fact that we work with tools & machines (what's called capital) and with skills & knowledge (called human capital). We need to pay these other inputs to production. Once we do so, we are left with "true" productivity.
This true productivity (known as total factor productivity) is what will propel wages and incomes for the future. The rest gets paid out, either to the owners of capital, or to those with exceptional human capital. Great for those folks, but not as great for the common man.
According to Singstat, Singapore's productivity (by the simple definition) rose by 1.3% per year over the past decade (2008-19). This isn't great, but it has certainly risen respectably. On that alone, our productivity is great. If so, why isn't this reflected in our salaries?
Because true productivity only grew by 0.1% annually. Indeed, this better measure has averaged about 0% since 1975. That's why Nobel prize winner Paul Krugman called the Asian growth miracle a myth. It isn't that we haven't gotten richer; just that the growth wasn't sustainable.
Krugman wrote his piece in the mid-1990s. We managed to skirt the reckoning that many economists expected back then, by doubling down on our accumulation-based model. As skilled foreign talent flooded our shores, we sharply increased average years of schooling (from 9 to 13).
We also channeled more and more of our saving into capital investment. But this investment has been ever-more inefficient (paying lower returns), and since not everyone will end up getting a PhD, educational attainment will only add about one more year over the next decade.
So this approach has now been exhausted. We can try to eke out a little more growth (and raise productivity using the simple definition), but our efforts will be very poor value for money. We need to work smarter, not harder, and this happens only when true productivity grows.
As a productivity researcher, I understand that this process won't be easy. But it is harder when we double down on an approach that can no longer deliver, and pretend that things are going well. We should instead be confronting the problem head-on and thinking about solutions.
Some solutions could be: more directed R&D spending, improving management practices in SMEs, promoting technological diffusion in services, and strengthening the quality of our democratic institutions. All these channels have been verified by cutting-edge academic research.
The upshot of growing true productivity is that it can improve income and welfare for all, since growing the pie does not require us to cannibalize one source of growth for another. So we are less likely to see skilled foreign talent or cheap foreign workers as a threat.
This will help us avoid the rise of populist and nationalist sentiment that we see in other advanced economies. At @wpsg, we want to have this national conversation about how best to move forward. This can only happen with your support. #makeyourvotecount #workersparty
P.S. For those accustomed to staring at charts, here's a decomposition of Singapore's growth into contributors. You can see that while we have had some productivity bumps over time, they were usually small and seldom sustained. The recent collapse in all factors is also evident.
