In the face of rapid changes driven by technology and global challenges, four key structural trends stand out for their transformative potential across economies and societies – digitisation, sustainable living, future of consumption and longer lifespans. Digitisation and sustainable living have a pervasive impact across all sectors and business models, while future of consumption and longer lifespans reflect the shift in consumption patterns from a growing and ageing global population.

The four structural trends are interconnected, transcend sectors and countries, and can persist through economic cycles. They lie at the forefront of Temasek’s investment strategy to build a portfolio that is resilient to shocks and relevant for the future.

DIGITISATION: STAYING AT THE FRONTIERS OF TECHNOLOGY

The digital revolution is more than just buzzwords; it is a foundational shift in how businesses operate and scale. Cutting-edge technologies – such as artificial intelligence (AI) and blockchain – are reshaping societies and offering unprecedented opportunities for innovation and growth.

Temasek has not only embraced these technologies but has also proactively invested in them. It has also built its own future-centric capabilities to offer value to its ecosystem and the marketplace across a spectrum of digital domains – artificial intelligence, blockchain, cybersecurity, data and digital, and sustainable solutions – a grouping it terms the “Temasek Operating System”, or T-OS for short.

“With the T-OS, we are able to differentiate ourselves as an investor and add value to our portfolio companies through the innovative solutions and capabilities that we are creating. Not only are we able to grow and develop specialised talents using economies of scale and offer them career pathways within our ecosystem, the T-OS offers opportunities to innovate applications, business models and ventures, and create value,” explained Mr Chia Song Hwee, Temasek’s deputy chief executive officer.

Some of the ventures that Temasek has established through T-OS include Aicadium, a tech firm that partners with Temasek’s portfolio companies to innovate and scale AI products. In cybersecurity, ISTARI plays a pivotal role as an advisor and educator, supported by a comprehensive portfolio of solutions. Under data and digital, Temus aims to catalyse the digital transformation of the private and public sectors. It has even launched a technology talent conversion programme named “Step IT Up” to upskill non-tech talent with digital skills.

SUSTAINABLE LIVING: CHAMPIONING A GREENER TOMORROW

As a long-term investor, Temasek recognises the urgent need for solutions that support longer, healthier and more fulfilling lives while safeguarding our planet. That commitment propels the company to invest and partner with businesses that are at the helm of sustainable living.

Temasek’s commitment in this space is woven through investments across seven focal areas: Food, water, waste, energy, materials, clean transportation and the built environment. In addition to backing innovations and technologies at the pre-commercialised stages, it also guides its portfolio companies towards robust decarbonisation efforts and identifies opportunities in the green transition journey. This approach enables Temasek to collectively accelerate efforts to scale decarbonisation efforts and low-carbon solutions.

“We are living in a critical decade, and climate change is arguably the most pressing crisis of our lifetime. We also recognise that climate challenge brings with it countless opportunities, solutions and technologies that can help communities globally to progress,” said Mr Chia. “By investing in cutting-edge and proven technological solutions, we envision to help these companies scale and solve some of the world’s toughest decarbonisation challenges. This is how we can contribute to the global movement and build a more sustainable and inclusive society, so that future generations can prosper and thrive.”

FUTURE OF CONSUMPTION: SHIFTING CONSUMPTION PATTERNS

Propelled by the COVID-19 pandemic, consumers are reshaping consumption trends and driving the rapid growth of digital adoption across different sectors. This ranges from the widespread adoption of digital payment systems to the high usage of e-commerce to purchase goods and services.

According to the e-Conomy SEA 2023 report released by Google, Temasek and Bain & Company, the digital economy in Singapore alone is expected to grow by 12 per cent to reach US$22 billion (S$29 billion) by the end of this year and is projected to reach approximately US$30 billion in 2025. Regionally, the digital economy will continue to be a major growth driver in Southeast Asia, with widespread Internet penetration rates and increasing consumer participation in adopting digital products and services.

“Temasek looks at the growth of the middle-income populations and where consumption spend is flowing, across goods, services and channels,” commented Mr Chia. “We then use our capital to catalyse opportunities and solutions that will enable companies to take maximum advantage of the changing consumption patterns of consumers, in order to generate sustainable returns over the long term for us.”

LONGER LIFESPANS: ENHANCING LIVES AND LIVELIHOODS

The global population is ageing at an unprecedented rate, and more people are living longer due to advancements in healthcare, technology and education. The demographic segment of those aged 65 and above is expanding every year and is projected to continue growing. For instance, about one in four Singapore citizens will be 65 or older by 2030, a significant increase from the current statistic of one in six.

This trend is shaping society in profound ways. It is bringing to the fore challenges such as a shrinking pool of younger workers, while simultaneously giving rise to the “silver economy” and increasing the need for healthcare services that are dedicated to seniors. These shifts present unique opportunities for businesses to innovate and strategise for a world where populations not only live longer but also enjoy more meaningful and enriched lives.

“As a long-term investor, Temasek is able to invest in companies that are developing new therapies and healthcare solutions that require patient capital,” explained Mr Chia. “We continue to observe the space concerning longer lifespans with great interest, and deploy catalytic capital in companies that we feel have the potential to make a difference to the biomedical field and the community at large.”