Speech by Mr Khaw Boon Wan at the 36TH ICA Conference - Innovating and Transforming Government through Information Technology in Olivia Room, Swissotel

22/10/2002

"Free-up Public Sector IP"

ICA Chairman John Riddle
IDA Chairman Lam Chuan Leong
Friends and Colleagues

I see many Government officials in this Conference, both from Singapore as well as from overseas. Up till a year ago, I too was a Government official. Indeed, like many of you, I was also active in promoting e-Government, the focus of this Conference.

IT helping Government

You have chosen the theme: "innovating and transforming government through IT". You will hear from many prominent speakers, from Australia to the US, who will share their experience in their respective countries.

They will explain how IT can be further exploited to help Government provide better service to the public. I will therefore not add to this subject of how IT can help Government.

Government helping IT

Instead, let me focus on the opposite flow of how Government can help IT, or more precisely on how Government can help grow the IT industry.

For the benefit of our foreign visitors, let me explain that Singapore is currently in the "remaking mode". 37 years after independence, Singapore is at a turning point. We know that the old Singapore model is no longer adequate. Our economic model can probably take us through another decade. But it is unlikely to deliver strong growth beyond 2010. It will have to be remade or re-engineered.

Many Committees are busily debating the strategies going forward. We have organised the various discussions under the larger banner of remaking Singapore.

Remaking the Service Industries

I myself have been leading a Sub-Committee on how we can remake the service industries so that they can be world-class and can complement our manufacturing industry as a twin engine of our economy. We have just published our findings and key recommendations.

For this morning, let me elaborate on two observations pertaining to the service industries and on how Government’s action can help or retard their growth. This has direct relevance to the IT industry. In fact the observations are pertinent to e-government initiatives and especially on how they are to be executed.

Create Sophisticated Local Demand

The first observation we made is that most services are produced where they are consumed. This is unlike manufacturing where goods can be produced anywhere in the world and shipped to markets globally.

The implication of this observation is that service companies tend to locate where the demand is. To develop service industries, we may have to create the market locally and to actively expand the local demand.

The IT industry is an excellent example of this observation. Twenty years ago, there was not much of an IT industry to talk about in Singapore. We knew that IT was going to be a strategic development with huge economic potential. We had to be a major IT player or we would be out of the global game.

The Government took a strategic decision to promote the computerisation of the Government. We decided to computerise all Government operations wherever it made sense. We pumped in huge investments in this strategy.

Slowly and steadily, we grew the local demand for IT and nurtured an IT industry which then boosted the demand in the private sector. This led on to other nation-wide initiatives like the Intelligent Island, SingaporeOne and Infocomm 21. A whole new industry was born.

This strategy of stimulating local demand to create the industry has not yet run its course. The global IT development is still very much work-in-progress. But we have graduated from the early phase of simple computerisation and exploiting IT to more sophisticated use of IT.

We are now going for more knowledge-intensive and sophisticated local demand. We are encouraging greater experimentation, more innovative solutions and cutting edge IT services. We now have more demanding consumers who have more robust needs and require higher standards and quality. This is raising the overall standard of the local IT industry and is enabling them to compete internationally.

Creating sophisticated local demand is a continuous, ceaseless endeavour. This strategy leverages on a unique strength of Singapore, that it has been innovative in public policy making. We are the first government to introduce TradeNet, a nation-wide paperless EDI (Electronic Data Interchange) system for trade documentation and customs processing. We are the first government to introduce electronic road pricing nation-wide. We are the first to auction certificates of entitlement to car ownership. We are now among the pioneers in the e-government movement.

All these initiatives require sophisticated IT support. They become valuable fertile ground for breeding world-class IT solutions and capabilities.

So even as we discuss how the IT industry can help translate e-Government initiatives into practical solutions to benefit public service on the ground, let us note the economic benefits that e-Government initiatives can unleash for the IT industry. Suitably managed, it can be a virtuous symbiotic relationship.

Exploit Public Sector IP

The second observation we made about the service industries is that in Singapore the expertise and world-class capabilities partly reside in the public sector. For example, we run some of the best airport and seaport in the world. Our public housing programme has won international acclaim. Our National Parks Board has created the first Garden City in the tropics. We are proud of our public hospitals and universities.

All these expertise and experiences reside in the public sector as public sector intellectual property (IP). There lies a dilemma. Government departments and statutory boards are rightfully domestic focused. Their mission is to enhance the quality of life in Singapore. Their mission is not to transform the world and to profit from that. That is the mission of private enterprise.

But if the expertise, or the IP, remains within the public sector, we miss the opportunity to export it and convert it into commercial gains. The corporatisation and the privatisation of Singtel, PSA, Singapore Power and the setting up of JTC International are of course, initiatives to exploit and export our public sector IP. But we may need to more aggressively and comprehensively free-up and commercialise other relevant public sector IP. As these entities corporatise, they create entire eco-systems of new business opportunities for Singaporean firms who are their suppliers.

As we formulate new e-Government initiatives and think about their execution, we should bear in mind this insight. We should not inadvertently entrap more public sector IP. The way to avoid entrapping public sector IP is to actively outsource. That is why Government has stopped being its own exclusive IT solution provider and integrator to being a major buyer of such services.

The Government has the capabilities to conceptualise how it wants to transform itself using IT. As you will hear later, it is not just putting an "e" in front of Government but engaging in more fundamental business process transformation. We then work with industry to turn these concepts into reality. In the process, new IP is jointly created as the Government and industry partners work on new solutions to problems, some of which might well be world firsts. By not insisting on locking up the IP, we give the industry partners greater financial incentives to export the IP and grow internationally. In so doing, the industry is strengthened and will in turn be able to come up with better solutions in their next job. This is a win-win situation.

Our National Library Board (NLB) provides a useful illustration of this strategy. NLB manages a network of public libraries, making 25 million book loans a year. In the old manual system, library users had to queue up for an hour to check out or to return books. This was a great inconvenience and many librarians had to be employed.

NLB decided to try out RFID: Radio Frequency IDentification technology. RFID had never been used in libraries. The risk of failure was high. But a local company, ST LogiTrack, was willing to bet on it. Its mission is to develop innovative RFID-based solutions. It invested its own money to develop a RFID-based library management system. NLB provided a useful test-bed for the experiment. As it turned out, the experiment was a roaring success. Along the way, valuable IP, in the form of a patented process was created.

With RFID, the entire book loan and return process is now automated. Books can now be borrowed at any self-service counter within the library. Books returned are updated automatically as they are slotted into book drops. There is no longer any need for a librarian to register or cancel loans. There is no more long waiting time for library users. As NLB saves on manpower cost, library users enjoy a higher level of service.

As for ST LogiTrack, it went on to win the right to roll out the system on a nation-wide basis in a competitive tender. In addition, it now has a product that it can market globally. I understand that a similar system will soon be implemented in a library in Australia and that there are prospects for similar contracts in several other countries.

That we should not inadvertently entrap IP in the public sector has wider applications, beyond the IT industry and e-Government. Let me give you an example from a totally different field.

In recent years, MITA’s Sing Singapore Committee has been commissioning local songs to promote community singing among Singaporeans. You may know some of our Sing Singapore songs, like Kit Chan’s "Home" and Tanya Chua’s "Where I belong". Because the songs were commissioned by MITA, MITA automatically holds the songs’ copyrights. The composers and singers could not reproduce or market the songs. In a way, the IP got trapped in MITA and the commercial value not fully exploited.

This year, the Sing Singapore song was Stefanie Sun’s "We will get there". MITA took a different tack and partly released the song’s copyrights. As a result, Stefanie was able to include it in her CD album ("Leave") which had already sold over 700,000 copies in the region.

By freeing up the IP, this year’s Sing Singapore song reaches a regional audience, beyond tiny Singapore!

Conclusion

These examples illustrate how enlightened models of government-industry collaboration can achieve triple wins: a win for the government, a win for the industry and a win for the primary constituency, the people.

With the many new e-government initiatives that we are embarking upon, there will be many opportunities to apply this approach. We should in fact track the progress of how our Departments are unlocking their IP as part of the regular monitoring of our e-Government initiative. To fully unleash the economic potential of e-Government, let us bear in mind the ingredients for success: an open mind, a willingness to experiment and a spirit of innovation.

On this note, I wish you all a productive Conference.

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