The move could triple value added per worker by 2020 and raise long term productivity levels to that of advanced economies.
Small and medium enterprises, like Meiban, make up nine in 10 of the 2,700 precision engineering companies in Singapore.
Altogether, the industry employs over 90,000 workers, or about a quarter (22 per cent), of Singapore's manufacturing workforce.
And as the sector moves away from mass production of simple parts to more complex and technology-intensive precision components and equipment the government said skills-upgrading is key.
Speaking at the launch of the productivity roadmap for the industry, Trade and Industry Minister Lim Hng Kiang said: "Developing this pool of highly skilled craftsmen will enable Singapore to match the mastery seen in countries like Germany, Switzerland and Japan, which have long histories of vocational training excellence.
"For generations, they have produced craftsmen respected for their manufacturing expertise. Similarly, this initiative aims to create recognition and establish a rewarding career path for our skilled craftsmen."
The 10-year plan launched on Wednesday by the Singapore Economic Development Board and SPRING Singapore is also expected to help firms improve operational efficiency such as automation.
And the aim is to triple the annual value-added per worker in the precision engineering industry from S$67,000 in 2008 to S$178,000 by 2020.
This is expected to boost profitability for firms and raise salaries for workers.
Value-added is calculated as the difference between the value of all the inputs (raw materials, purchased services) and the price at which the product is sold.
The precision engineering industry has played a key role in supporting Singapore's electronics manufacturing output over the past four decades. Today, the industry contributes three per cent of Singapore's GDP and nine per cent of the economy's manufacturing output.
The government also expects output from the precision engineering sector to continue to decline over the next two to three quarters in line with the broader manufacturing industry.
Mr Lim added that "We must (work) together to increase productivity at both the industry and at the firm level. This will help our companies remain competitive in the face of global competition and challenging economic times."
Further details of the 10-year plan will be released later this year.
- CNA/ck
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