The paper examines the links between skill formation processes and productivity improvment in the construction industry in SIngapore. It critically examines the essential features of Ashton and Sung's New East Asian Skill Formation Model. This model, which is derived from the theory of the development State,points to the dominant role of the State and, for that matter the political elites, in the skill-formation process. It asserts that the State determines the skill needs at the national level and takes steps to ensure that those skill will be available in the economy when they are needed.