With thousands of people being made redundant, Singapore wants to take advantage of the slowdown to upgrade and retrain its workforce with hi-tech skills. A new government ministry has been formed, the Ministry of Manpower (MoM), to lead the charge and it is headed by Lee Boon Yang. A S$100 million (about HK$475 million) fund has also been created to upgrade skills. 'We have to inculcate a learning mind-set in our people to ensure life-long employability and productivity,' Mr Lee said. 'Only then can we withstand the sudden changes.' The National Wages Council (NWC), which comprises government officials, employers and union leaders, predicts 20,000 Singaporeans could lose their jobs as a result of the region's economic downturn. The republic has a small workforce of just 1.8 million which has been seen by some businesses as a serious impediment to their long-term growth and an occasional deterrent to embarking on new investments and expansion. The government wants every worker to become computer literate so that labour- saving intellectual technology can permeate every aspect of business life. 'Investing in our people has always been an important strategy for Singapore's national competitiveness,' Mr Lee said. Investing in infrastructure and people was best done now, he said. A concerted effort is also underway to shift from labour-intensive industries and work practices into more labour-efficient and high-yielding activities, like hi-tech manufacturing and financial services. Low-end labour-intensive work is being farmed out to satellite industrial zones in neighbouring countries, like Bintan and Batam in Indonesia and Johore in Malaysia. The regional currency and financial crisis has heightened the need for this strategic change. Singapore was already one of Asia's most expensive places to do business. The sharp devaluation in its neighbours' currencies has further deteriorated its competitiveness. By nurturing a super hi-tech and super-efficient workforce Singapore needs to compensate for its higher cost base through better productivity. The government wants to turn Singapore into the world's first so-called 'intelligent island', where computers and robotics permeate every aspect of people's work lives. This means sending thousands of workers back to the classroom and training up the younger generations still at school. Deputy Prime Minister Tony Tan said: 'Economics in the 21st century will be dominated by knowledge-based industries founded on the use of technology and information. 'Technology and information are useless, unless one knows how to extract the golden nuggets, and transform a mass of information into useful and insightful knowledge and complex technologies into market opportunities.' So far, more than 7,000 workers have been retrenched this year. Some bearish economists even forecast unemployment could rise to above 4 per cent. The NWC has called for wage restraint and lower bonuses so that firms can afford to keep redundancies to a minimum. It says basic pay rises should lag productivity growth - the first time it has made such a call since Singapore's last recession in the mid-1980s. The NWC and National Trades Union Congress have called on employers to look beyond just pay packets and invest in their future by retaining under-utilised staff and sending them off for skills upgrading. The government has offered to pick up 80 per cent of a company's training costs and subsidise workers' pay while they are on courses by up to S$4 an hour. Lim Swee Say, deputy secretary-general of the National Trades Union Congress, said: 'By the time the growth is back, the business environment will be very different. 'There is no guarantee that companies which survive the short-term through cost-cutting can compete in the future.'