Ladies and Gentlemen

A very good afternoon to all of you.

First, let me start by thanking the Asian Society and Zendesk for organising and hosting this event, and to all of you here for attending this event.

2 Let me start by saying that in coming here, one of the key things I had wanted to engage both corporates as well as other partners is the message about the growth opportunities in our part of the world. By our part of the world, I mean specifically Southeast Asia, ASEAN.

3 The reasons for it are our basic fundamentals. In general, the economies of ASEAN are growing at about 5 to 5.5 percent and that is the projected growth rate. There is potential to grow at a much higher rate but even at these rates, we are already seeing significant possibilities emerging. We are talking about a region of 10 countries, with over 600 million people, and the economy of about the size of US$2.5 trillion dollars. So it is not small, it is growing and it is expected to be amongst the top four aggregate economies in the world by 2030.

4 Second, the growth in ASEAN is driven by many factors, demographic in particular. The middle class is growing, the size of the middle class is expanding, disposable incomes are growing and it is a relatively young population. Therefore, adoption of new trends and technologies, is particularly serious now in our part of the world, and that is manifested in the way the digital economy in turn is growing. The projections are that the digital economy of ASEAN will treble in about seven years, to a size of about US$240 billion. If you think about it, that is quite a significant double digit growth rate, and one that gives you a measure of the kind of activity taking place.

5 Another indicator of it would be the emergence of our own Unicorns. We have Unicorns based in Singapore in various sectors, from Grab, which is our equivalent of Uber. Also, you have companies from Indonesia, like TravelLoka and Gojek which is also in the transport space. You got companies like Razor, SEA, which are all in the gaming space. We are seeing more emerging quickly. So, both in terms of the aggregate economy and the emergence of specific companies in this space, they are indicators of what is happening - the opportunity is clear. But I will point out that the evolution of the digital economy is posing significant challenges that are not unique to ASEAN or Singapore. In fact, it is a global challenge.

6 The first is the impact on industries and business models. This is a transition that needs to be navigated both at the macro level of the economy and also the micro level in terms of particular sectors and in the case of larger countries, even regions or sub-regions.

7 The second impact is on jobs and skills. What are the jobs and skills of today and how are they going to change? What are the new jobs and skills that we require tomorrow? This is an area that we have invested significantly in.

8 The third is the nature of the relationship between the government and the people and the engagement that we have. We do not want society to bifurcate into the digital-haves and the have- nots. We want all to be able to participate, whether it is in the economic domain or in the larger space of opportunities that are being created by digitalisation. So opportunities are growing, the challenges are there and in particular, one of the challenges is the challenge to the social compact. The traditional idea of working for a company, is being challenged. If you look at the gig economy and its consequences, I think that illustrates it aptly. So what is our response? I thought I would share with you a little bit about our perspective from Singapore and what we are doing.

9 Firstly, as a small country, we are a price taker. We take the approach that it is not about resisting technological change but it is about how we embrace it, adapt to it and optimise our response. That is encapsulated in our vision for Singapore – it is articulated as a Smart Nation vision; a Smart Nation that comprises a digital government, a digital economy and a digital society.

10 Within that, we envisage every business in Singapore being digitally empowered, meaning they have got digital capabilities that will enable their business to grow well beyond their borders to exploit new opportunities. We envisage every worker being digitally skilled, meaning they acquire the skills that are necessary to be able to port into the new digital economy. Thirdly, we see every citizen being digitally connected - no matter what your age or your educational background, you are able to plug into the digital economy and benefit from all the services, including government services. That is the frame that we are using, it is a digital-as-usual approach. In other words, it is not about whether to digital, but to accept it and then adapt to it, from the government, to the economy, to the society.

11 So where are we heading in this, including what are some of the specific initiatives we are undertaking? I thought I would give you three aspects of the work we are doing.

12 The first is, we believe that with the evolution of the digital economy, there is a pressing need for more international and government-to-government engagement on the new norms, or the norms that should bind or should govern digital economy activity cross-border. What we have in the world is a lattice-structure of free trade agreements, whether it is bilateral, regional or, what the trade people would put it as unilateral deals. We have the multilateral arrangements through the World Trade Organisation (WTO)but all these are agreements from the last century, focusing on the movement of goods, movement of services.

13 What we need in the new environment is digital agreements that cover the movement of bits and bytes cross borders and it is a completely different formulation. Countries and governments need to engage on this in order to see how we can promote this flow. This is where we have initiated digital economy partnership agreements. We have initiated one trilateral effort between Singapore, New Zealand and Chile. You may think small economies are unlikely partners, given the size and the distance between these countries. But I just want to remind everyone that the Trans Pacific Partnership started as an alliance of four small countries - these three plus Brunei - and went on to attract a lot of large players. Eventually, we settled on 11. What we hope to do with this agreement is to start a discovery process into what is possible, what can be done, and find ways to build these bridges.

14 We have another effort that is taking place between Australia and Singapore, and we are looking at other possibilities as well. Our objective at the end of the day, is how can we put together more of such agreements. The JSI, an initiative that was co-sponsored by Australia, Japan and Singapore, that was at the multilateral level, and each of these efforts will have their own cadence. Our expectation is that they will reinforce each other and create a whole, which is going to be much greater than the sum of the parts, and it is going to facilitate the digital economy.

15 The second aspect of the efforts that we are undertaking is about tripartite partnership. Given the nature of the changes that we are undertaking and how far-reaching and broad that they are - unique partnerships between the government, the private sector, and the labour movement; they all have to come together, recognising that this is a common challenge. It means on the part of individual workers, is the recognition that you got to find ways to acquire skills and be prepared to upgrade yourself. The most important switch to flick is the mindset search and to say; we are ready to learn and have an attitude and a culture of lifelong learning. It is a lifelong endeavour of acquiring knowledge, acquiring skills, and constantly adapting to the environment.

16 On the part of the businesses, there are two things I want to highlight. One is the changing modalities of doing business in order to recognise the new digital realities, especially those businesses in the existing industries that need to make this transition. That, in itself is quite challenging, especially for small and medium sized enterprises. What we have found is when the leaders make the decision and are committed to it, then the organisation responds. That is an important part of the effort, in getting the leaders of these businesses to agree. The other side of the businesses’ response is the recognition that the changes that are occurring will have an impact that is quite profound on its workers. Therefore, the businesses cannot take the attitude that this is just the responsibility of the government, but that businesses themselves have a role to play in helping their workforce make these transitions and navigate them well.

17 Thirdly is the role of the government. The role of the government is to come in with appropriate complementary strategies that businesses and individuals can tap on, in order to navigate this transition.

18 What are we doing? Just to give you a couple of examples - we have a national strategy focusing on 23 verticals in our economy. And these verticals collectively account for maybe about 85% of our GDP. For each of these, we are working out a digitalisation plan. The reason you need them at that level of granularity is because what you need for the retail sector is quite different to what you need for say, the precision engineering sector of the marine and offshore sector. The recognition is that every sector has to respond, but the manner of the response may differ. So that is at the national level.

19 We have an effort, the SMEs Go Digital, to help small and medium sized enterprises plug in to the digital economy. Much of that work is done by government agencies, and they can plug in to those solutions.

20 The third aspect of that is what we do with workers - we have the TechSkills Accelerator (TeSA) programme. This is part of the national efforts to help people from non-tech sectors to acquire tech skills, and those within the tech sector to go higher up at the respective domains that they have been operating at. The cooperation between government, the private sector and the labour movement, has a very important role in this.

21 I talked about the government-to-government in the digital economy type of partnerships. I talked about the tripartite relationship between government, business and labour movement. The final point I would make is that, there is the societal dimension to this, ensuring that this transition and growth is an inclusive one. We already see this in economies, where there's this cleaving between those who do very well and then the rest. The digital transition has the potential to exacerbate that trend. Therefore, we need to make a concerted effort to bring everyone in and part of it is how we help workers do this. Whether you are an older worker in a mature industry, or a young worker in a tech industry, we need to work with you to help you to move on. The other part of itis those who are not in the workforce, but stand to benefit significantly from the new types of digital services and other kinds of benefits that they may derive from being active digital citizens. We have digital readiness programmes where we reach out to those in their 60s -70s and get the help of young students from the polytechnics and universities to come and run these programmes, teaching them one-on-one, going beyond taking photographs on your phone to performing transactions and getting information. One of the best ways to get older Singaporeans to adopt technologies is to find something that they find meaningful – maybe WhatsApp-ing their grandchildren, or watching Korean dramas – it gives people a reason to try technology and from there, they can branch off to do other things.

22 I have given you a broad sketch of the opportunities, the kind of challenges we face in trying to make that transition and the adaptation that we are trying to bring about in our economy and our society through some of those programmes.

23 The last point I want to make is that because the nature of this transition is so broad-based and all encompassing, you cannot over-emphasise the importance of trust. Workers need to have the trust that the employers have their best interest at heart and will be doing their best to bring them along in this transition. Because if they don’t, then they expect the worst and they behave differently.

24 Employers and businesses need to have the trust that, the workforce is going to approach this in a constructive way and the government will play an important enabling role to create an environment that is conducive for this transformation because it is never going to be easy. Finally, the government needs to be an object of trust, helping catalyse this transition, and coming in especially to play the role of a catalyst and to address some of the market failures. In particular, the kind of things which if left to their natural course, they may take much longer, may not be as complete, and we need to come in to augment that with programmes and initiatives.

25 That is the last point I want to make – nurturing that trust is going to be critical because without it, you will start to see many of the divisions in our society emerge in a much more palpable way.

26 Thank you very much.
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