SINGAPORE: Prime Minister Lee Hsien Loong on Sunday (Aug 21) singled out disruption as the defining challenge among the economic issues Singapore is dealing with, and outlined how the Government and people can work together to overcome such hurdles.
"Old models are not working, new models are coming thick and fast, and we're having to adjust and to keep up, because of technology and globalisation. And the disruption will happen over and over again, relentlessly," said Mr Lee.
In his National Day Rally speech, Mr Lee illustrated the phenomenon of disruption by talking about the taxi business, which is seeing greater competition from private car hire services Uber and Grab. "Everywhere where there's Uber and Grab - or in China, Didi Kuaidi and in other cities, different names - they are disrupting the taxi industry," he said. "Disrupting, but commuters are benefiting: Better service, more responsive, faster - but taxi companies and drivers find their business affected."
PM Lee noted that there were two ways to respond: To close Singapore off and try to stop people from using the new technology; or embrace change and let the disruption happen – but help the incumbents, especially the taxi drivers, adapt. He noted that taxi drivers have been level-headed about the competition, and made useful recommendations to level the playing field.
"I think we all know that we cannot stop progress. Even Uber and Grab are going to be disrupted!" added Mr Lee, citing the trial of driverless taxis that will begin at one-north in 2017.
Mr Lee observed the same changes happening to other industries as well, noting how the retail business – which employs 125,000 workers, in 16,000 companies – has been affected by e-commerce. "But it's not just doom and gloom, because when you disrupt, you also create new jobs" he said. The PM said that, as a transport and financial hub, Singapore can be a major player in the new logistics chain and that there are also new opportunities in data analytics and digital marketing.
RESPONDING TO DISRUPTION
The Prime Minister said that every industry is getting disrupted differently, and that the Economic Development Board (EDB), SPRING Singapore, Infocomm Development Authority of Singapore (IDA) and IE Singapore will work with industries one by one; and with the trade associations and chambers, develop specific programmes to help companies use new technologies and invest in skills.
Mr Lee said that the Government also needs an overall strategy to spot changes, to respond to successive disruptions, to make companies resilient and prepare workers to take on different jobs. "That is what the Committee on the Future Economy (CFE) is doing, chaired by Heng Swee Keat and S Iswaran," he said.
He highlighted three thrusts the CFE is taking: Building new capabilities, promoting entrepreneurship and developing skills.
BUILDING NEW CAPABILITIES
Mr Lee singled out the digital economy as a promising area in which to build new capabilities, citing logistics company Ascent Solutions, which developed a tamper-proof lock and tracking device to address the problems of theft and delays in customs clearance.
He noted that with the help of SPRING and IE Singapore, Ascent has developed and taken its device to East Africa. "From Kenya to Uganda, it used to take 20 days for a container to travel, because it had to clear 10 checkpoints along the way," he observed. "With the tamper-proof lock, there is no need to clear customs over and over again, he said. "It takes only two days!"
Mr Lee also cited HOPE Technik, a home-grown engineering SME that produces Red Rhinos and hazmat control vehicles for the Singapore Civil Defence Force (SCDF) as well as drones and specialised industrial and commercial equipment. He noted that four years ago, HOPE Technik beat top engineering firms around the world to win a tender to build a scale model of a space plane for Airbus' civilian spacecraft programme. "Maybe in 20 years, when civilians go into space and space flight is a reality for all of us, we can say that a Singaporean firm helped to make it happen!" said Mr Lee.
(Photo: HOPE Technik)
"We must build this sort of new, deep capabilities in every sector – engineering, food manufacturing, logistics. And the Government will support companies to do so."
PROMOTING ENTREPRENEURSHIP; DEVELOPING SKILLS
Beyond building up capabilities, Singapore should promote entrepreneurship, Mr Lee said. "Entrepreneurs play an important role – not just because they're doing business for themselves and doing well, and creating jobs and prosperity, but also because they are resourceful and optimistic, they give our society the confidence that anything is possible."
In his speech, Mr Lee cited the "small experiment" started at Block 71, Ayer Rajah five years ago, in which JTC rented the space to entrepreneurs and Government agencies offered co-funding. Mr Lee noted that Block 71 has been very successful and expanded to two more blocks. "We even have a Block 71 in San Francisco to help our start-ups tap the US market and the Silicon Valley network," he added.
Mr Lee highlighted a Block 71 company called Zimplistic, which developed the world's first automatic chapati and roti maker. The device, called Rotimatic, was brought to the market with SPRING's help and generated a lot of interest internationally, said PM Lee, adding that National Day Rally guests could try chapati made using the Rotimatic at the reception.
(Photo: Ministry of Communications and Information)
Mr Lee added that Singapore's schools are giving its students exposure to startup hotspots all over the world, and venture capitalists and big tech companies like Google, Paypal and Facebook are setting up in Singapore. "Maybe the next Google, Facebook or Alibaba may come from Singapore!"
Noting that a strong economy is built on a skilled workforce, PM Lee highlighted the importance of SkillsFuture and also noted that Singapore's schools are preparing its students well for the new economy. Besides upgrading workers in their present careers, he noted that the Government is also helping workers who get retrenched, or who change careers, to transition and find new jobs.