Given the external international environment, Prime Minister Lee Hsien Loong says the government's overriding priority now is to improve the lives of its citizens.
Speaking at the 30th anniversary conference of the Government of Singapore Investment Corporation on Monday, PM Lee said that it is also their objective to raise income across the board, even though it is challenging for many countries in this era of globalisation and rapid technological change.
"We are interested in per capita GDP and not just total GDP and we want to improve incomes across the board and that includes the middle income households and the lower income households at the lower end," he said.
To achieve this, Mr Lee said the workforce must "upgrade productivity than just go for expansion, and that means very challenging tasks in the next ten years."
This can be achieved by upgrading productivity through re-training of current workers and education of future workers so that they will be "job ready and deployable", and the restructuring of Singapore's industries.
Elaborating on the bigger picture, Mr Lee said Singapore must first grow the economy by staying plugged into the world by attracting investments and talent, encouraging local enterprises to diversify, expand and move abroad.
The government will also transform and upgrade the economy because it cannot grow simply by increasing the workforce indefinitely.
Other ways include buffering it against volatility by accumulating adequate reserves and maintaining political support for policies which benefit Singaporeans.
Mr Lee acknowledged in his speech that it is not easy for Singaporeans to cope with rapid changes as the overall standards of living are rising and that his 'newly elected PAP government has its work cut out for it.'