March 2016

Express your views on the 'Smart Nation' initiative and what you think the future of technological integration in Singapore will look like.

1st Place - Tan Aik Seng

Towards a digitally geared Singapore economy

The structure and orientation of the Singapore economy has been beneficial in meeting the material aspirations of many Singaporeans ever since industrialization in the 1960s. Much of Singapore’s growth since then has been predicated on remaining relevant to changes in the global economic structure, identifying areas where Singapore’s competitive advantages can add the most value to both process and product of the various businesses. Yet, as we continue to see advances both in the capacity of regional competitors and technology, it is apparent that Singapore has to move beyond its traditional reliance on certain strategic industries to maintain our high levels of economic growth. In this essay, I will argue that successful economic modernization must be driven by a fundamental realignment of the economy. This realignment must privilege the digital technology sector, for much of the value of the future depends on growth in this parallel but visibly important virtual world. Principally, I will advance the idea that Singapore will benefit greatly from cultivating a strong technological core of entrepreneurs and engineers to revitalize the economy. Singapore of the future is unlikely to be very much that of the present, let alone the past. Only a rethink of economic strategy can ensure our survival in the increasingly competitive region.

 

Why is the present untenable?

 

Changing global economic conditions have acted to erode Singapore’s comparative advantages over the past few decades, significantly affecting the country’s ability to capture more economic value than before. Economic policies have privileged industries tied to Singapore’s geographical location on the world map. Historically being an important node connecting the Indian and the Pacific Oceans, Singapore could achieve growth by diverting resources towards the creation of a vibrant, dynamic and free trading port. In tandem, industries such as shipping, oil and gas and associated sectors have become developed – over-developed, perhaps – until much reliance has been placed on these industries for the country’s economic position. Ipso facto, these are not liabilities to the country – they provide employment and add much value to the economy. Yet, because of reliance on these sectors as well, the country has been encountering problems in the present due to changes in specific industrial conditions and more indirect but global realities. In shipping, for example, cargo volume has declined partly as a result of more efficient technologies, but also because of the growth in the Malaysian Tanjung Pelapas port. This is already an immediate threat to the Singapore economy. Also, there are policymakers in Thailand and China who are keen on creating a channel through Southern Thailand – possibly the Kra of Isthmus. The two countries have powerful incentives economically in doing so, especially for China as it pursues its political-economic objectives under the One Belt One Road initiative. Such a channel will complement the land route it already has that links it to Spain.

 

Oil and gas companies also have encountered problems linked to a decline in global oil prices. Recent depressions of oil price have reduced the propensity of global firms to explore or extract oil. With the United States increasingly contributing to global oil production, the Organization of Petroleum Exporting Countries’ (OPEC) inability to secure consensus over price-volume balance and Iranian sanctions being lifted, the overall outcome is an over-supply of oil. At the same time, the global economy has not expanded at a level fast enough to match supply of oil with demand as a countervailing check on equilibrium price. Too much uncertainty has led to local oil and gas companies and downstream firms reducing capital expenditure and laying off workers.

 

Evidently, Singapore's economy has imputed too high a degree of risk despite being diversified. For diversity is as strong as elements in the basket sharing low levels of risk and responsibility for economic growth. But as it stands, the ripple effect of these traditional yet major, physically intensive and high-risk industries contracting are almost likely to be felt across the nation. Unemployment is no longer cyclical in nature - it is fundamentally becoming a structural problem. More innovation to insulate Singapore's economy from high risk sectors and also those with high rates of obsolescence must be taken on. To this end, opportunities to be found in the future is a good way to decide how we proceed.

 

How does the future resemble?

 

A central goal of every modern government has been to increase capital in the economies they are entrusted with advancing. Opportunities of the future seem to indicate that much of economic growth can be achieved by the production of technological goods and services. The world has fundamentally realigned itself with the very real possibility that the digital world provides considerable value for the physical counterpart. Not only is it impossible to ignore the growth of technology on the economy, but to ignore the need to leverage on technological growth for economic growth proves even tougher when facts are triangulated with predictions of the future economic landscape.

 

Internationally, digital technology companies such as Google and Facebook have logged impressive growth rates. Where stock price is a proxy indicator of how consumers perceive company potential, then the commensurate rise in prices of Google and Facebook stocks clearly indicate that much of the future is being deemed strongly positive by investors. Also, between 2011 and 2014 their reported gross revenue have increased by around 45 % and 65% respectively. Another point to note is that Google and Facebook offer virtually no physical products at all – their business model has been built about online platforms that have filled an important gap in service provision around the world. Services include Internet search and social networking. In addition, companies that do produce physical technological products such as Apple record similarly impressive levels of growth.

 

Furthermore, what is of greater relevance to economic development is the creation of employment opportunities that are attuned towards the higher tiers of economic value additivity. Google today employs about 57,000 workers. Many of these workers are housed in their home country, the United States. This is in spite of the fact that their service provided is global in outreach. It points to the benefit of cultivating a larger technological-economic base – the retention of jobs that are less likely to see outsourcing to more cost-competitive regions, such as in South Asia. Because much innovation involves the need for collaboration, the physical siting of technological engineers and associated professionals are necessitated as a result. Thus, there are strong reasons to believe that most of the benefits accrued by technology businesses can remain in the home country it was created in.

 

What can Singapore do in a changing world?

 

Singapore’s ability to seize opportunities in the future therefore must be well informed by the benefits of growing an even stronger technological core. While Singapore may not produce another firm like Google or Apple, it can still focus its energy on capturing downstream value that these firms would be keen to see added along the way. Whether it prioritizes goods or services production in the field of digital technology is a decision best left to comparative advantages that is best gauged in the future. Tentatively, there is a case to be made that Singapore will greatly benefit from pursuing both as production goals. An example of a physical product it could consider developing is in virtual reality (VR). As it is, Facebook’s recent interest has shifted towards the growth of VR products. VR’s allure lies in its potential for use in multiple problem settings. Governments may employ VR in simulation of policy outcomes; businesses with VR could record more efficient work processes through innovative work process enhancements. In short, much value is seen in further refinements to existing technological capacity. The world’s desire for technological advancement is still strong. Singapore can play an integral role in augmenting the growth of technology to these firms, or even perhaps outdo such firms at the initial stages of research and development. Pioneering product development in technology can only provide benefits in the long term. Even if it cannot achieve dominance in the global digital market, Singapore nonetheless must at least be able to achieve the status of indispensable and highly preferred partners to the technological giants in the world, such as Google and Facebook.

 

With the outgrowth of a technologically competent population today, Singapore is well placed to leverage on such a strong foundation to build the economy on further. This is aided further by the relative backwardness of neighbouring countries who lack the technological know-how found in Singapore. A fundamental reconfiguration of the economy, with an eye on creation of value, therefore will find participation in the global digital industry highly attractive. There are already plans in place to enhance the digital technological base of the labour force. Leading this is the creation of a digital hub within the new Singapore Institute of Technology (SIT) campus in Punggol. Primary schools have also begun to introduce basic computer coding programmes. These developments may actually indicate the potential for easier economic realignment. If indeed true, the government is even better placed to catalyze an economic transformation that will have powerful and positive effects on Singapore.

 

At the same time, the population arguably still appears to be materially incentivized. Where rational gains are esteemed in a capitalist economic system, there are strong reasons to believe that the government’s ability to raise general pay level will more than suffice in gaining popular acquiescence. Survival of material benefits, not liberal democracy, is still an end that a preponderant majority subscribes to. Such a pairing provides a stable dyad that mutually reinforce, insofar as the state can guarantee that institutional rules are geared towards the affirmation of these two outcomes. As technological employment tends to carry premiums to salary because of its highly professional and technical nature, this is likely to gain traction and acceptance to a greater extent than jobs that pay less. This potentially can spur greater productivity, for material incentives and matching of skills to job needs are enhanced and refined. With greater satisfaction at work, productivity gains can be predicted quite stably.

 

The matching of policy to basic motivations of the people is something that sounds simple enough, yet perhaps not carried out in reality that often. Case in points is the recently launched upgrading programme, SkillsFuture. The government has provided the institutional structure and subsidized the initiation cost for the public to participate. At the same time, however, the level of enthusiasm for such a programme has been an issue not examined at a level and depth that ought to and merits congruency with policy intentions. In fact, the creation of value may be at tension with the values of SkillsFuture, which appears to desire the enhancement of existing skillsets or the picking up of ‘hobbies’ that serve more a recreational than productive purpose per se.

 

How the government promotes an economy of the future must therefore be coupled to and aim at advancing the fundamental value underscored and esteemed as a potential savior against excessive costs of economic contractions. Entering 2016, the country is likely to feel the effects of various negative factors as touched on earlier in this essay. Being a small economy reliant on the world for economic growth, these events will necessarily affect us adversely. The economy of the future must attempt to minimize the fallouts that future such events could cause on our dependent and highly sensitive economy.

 

At the same time that the government is pushing for Singapore to be a ‘smart nation’, advancements in digital technology are likely to be of aid to this cause. Digital technology’s growth can utilize the nation as a test-bed. But over and above, the greatest gains are to be accrued to the domestic political economy – in other words, both to state and to society. The only way ahead is to accept that our comparative advantages are steadily eroding under regional competition, and act on identifying or developing such advantages in valuable realms as yet under-maximized in terms of global scale.

2nd Place - Joshua Matthew Goh

The Smart Nation initiative was announced to much fanfare during the SG50 Celebrations but has somehow not stayed in the public’s imagination since then. It could perhaps be due to the slightly inaccessible nature of a “Smart Nation” concept and its call for greater technological innovation that results in its message going over the head of ordinary Singaporeans. However the Smart Nation initiative itself seems determined to change it.

 

The Smart Nation initiative is mean to take advantage of the rapid developments in infocomm technology (“ICT”) and use it to better our living conditions, create more opportunities for growth and welfare and to build stronger communities. The Prime Minister’s Office (“PMO”) has summarized this initiative not simply as a vehicle for progress but rather a common national objective:

 

“This is a whole-of-nation journey Singapore is embarking on. To succeed, we need people, businesses and Government to work together because ultimately, citizens are at the heart of our Smart Nation vision, and not technology.”

 

The fact that this initiative was launched by the PMO belies the seriousness of the Government’s commitment to the Smart Nation initiative. The more cynical among Singaporeans might see the recent announcement of satellite-based Electronic Road Pricing as a harbinger of the “benefits” of the Smart Nation initiative. However its aims are not just restricted to developing current policies but also encompasses the broader goal of improving Singapore society.

 

No doubt the Government looks to places such as Silicon Valley and seeks to either replicate their successes in Singapore or use their developments as inspiration for similar growth here. Unlike previous Government-run initiatives, the Smart Nation initiative is being sold as a cooperative venture, with the Government working with citizens and companies to co-create solutions according to the PMO. This inclusive language is most telling of the need to get Singaporeans to own what can potentially be a very difficult concept to understand given highly technical nature of ICT.

 

The Government has already taken the initiative in preparing for a Smart Nation, they recently announced the Smart Nation Fellowship; meant to attract the best and the brightest of data scientists, technologists and engineers working overseas back to Singapore for short stints. This is targeted at overseas workers who are presumably working for industry heavyweights and it remains to be seen if this patriotic rallying can dislodge them from their current and presumably well-paying employment, especially since they are already living and working overseas. This form of “national service” might not appeal to them as much. However this Fellowship is probably a stop-gap measure meant to boost the number and expertise of ICT professionals in Singapore in the short-term, however the scheme and its effectiveness pales in comparison to what I feel is the best bet on building a Smart Nation; starting at home.

 

Recently the Ministry of Education announced that they would be introducing a new subject at the GCE ‘O’ Levels; Computing. This subject would involve programming, algorithm, data management and computer architecture and replaces the current computer studies subject. I admit that I did not know of this subject while in secondary school as my school chose to focus on the more conventional subjects from the  Sciences and Humanities. I recall attending a few classes in lower secondary on basic coding, but it hardly amounted to much and we did not see much use for it. Hopefully this new subject will form the basis for a new take on the topic of ICT and encourage more people to think of ICT as a necessary part of their lives and not something that only comes to mind when people find that their office internet is not working. With technological developments slowly rendering old jobs obsolete, it is crucial that even though machines may now replace man in some careers, man still remains the master.

 

It is clear that technological integration is taking place in Singapore, the satellite ERP as well as the use of messaging apps to communicate faults or complaints to government authorities. If the Smart Nation initiative succeeds, it might usher in an era of greater accessibility and enhanced social care, given that Singapore’s elderly population is on the rise. Better communication equipment to allow elderly folk living along will allow caregivers to react faster should they meet with an accident at home, greater technological advancement might convince employers that working at home is viable, allowing workers more time to care for their children at home while filling work quotas. Therefore it is clear that there are many issues in modern Singapore that can be tackled by the Smart Nation initiative.

 

The Smart Nation initiative rests on the will of Singaporeans to invest and take an interest into how technology can shape the future. Our society is still geared towards producing students and workers who can support the professions or the needs of commerce, it would take a bold person in this world to bet on ICT as the way forward for Singapore.

 

That bold person however, might be right. Singapore faces many challenges in the short-term and the long-term; dismal economic outlooks coupled with declining birthrates and increasing regional competition all suggest that the Republic must return to what allowed it to rise in the first place; its ability to harness rising trends and dedicate the necessary resources to it. The Smart Nation initiative seems very much like this; its strength lies in the broadness of its call. It has been suggested that the innovations to be explored under the Smart Nation banner range from commercial transactions, to travel needs and elderly care. As long as it helps to resolve an issue that is facing Singapore now, it is a worthy cause. And if this mindset is kept through the implementation of the new Computing subject and the Smart Nation Fellowship and even beyond, it will be a most heartening policy. The Government has so far been very open in setting the tone of the Smart Nation initiative as a clarion call to all to better Singapore in whatever way they can, now it needs to harness to potential of the youth and to reach out to Singaporeans to make the idea of a Smart Nation accessible to them. If these are done, then it will result in something far greater than the best ICT minds coming together to work for Singapore, it will result in a nation that thinks and imagines possibilities and solutions. A nation that has moved away from the rigid thinking that pervades its social structure and is now being left behind as the world changes. To have a nation that imagines and dedicates energy into innovating rather than following is worth more than any amount of Fellowships and I only hope I would be around to see it.

3rd Place - Calvin Lee

The ‘Smart Nation’ initiative aims to chart Singapore’s direction over the next few decades to transform Singapore to become a leading city in the world for technological developments and progress. It is remarkable that Singapore has decided to prioritize this area of growth given that Singapore is already more technologically advanced than most of the region. Furthermore, this represents a departure from the traditional focus on leveraging on Singapore’s strategic location to develop its economy through trade, as the nature of IT transcends physical proximity. Singapore’s emphasis on this area of development is nothing new; its expenditure of US$1608.86 on Research and Development per capita was the second highest in the world, second only to Switzerland. What is new, however, is the explicit formulation of a cohesive government policy to achieve this goal. This essay now explores the nature of this approach, including its advantages and limitations.

 

Singapore’s strengths in achieving this goal

A major advantage that Singapore possesses in achieving this goal lies in the smallness of its size, as this enables it to more easily implement a cohesive and comprehensive infrastructure. This is a key aim of the ‘Smart Nation’ initiative; while a ‘piecemeal’ development of individual technological prowess can be achieved through increased trade to allow Singaporeans to purchase the latest technological gadgets, it is far harder and more rewarding to be able to ‘make the most of the potential, to integrate all of the technology and possibilities into a coherent and comprehensive whole’ (PM Lee Hsien Loong’s speech at Smart Nation launch on 24 November). It is hoped that when research agencies are grouped together in such close proximity, they will benefit from economies of scale as well as mutual exchange of ideas to achieve results that are more than the sum of their collective parts. This is a proven trend; it is observed that the high-tech innovation and development faculties in the close-knit Silicon Valley ecosystem are at the forefront of their fields, but such benefits dissipate as the scope of observation expands from Silicon Valley to wider California or even America.

 

It is a wise bet for Singapore to play on this factor to show that its physical limitations can be an advantage and not a hindrance. After all, Singapore has a track record in such achievements. PM Lee Hsien Loong has noted how our public hospitals have benefitted from an integrated patient record system, as compared to other countries which have spent billions of dollars trying to implement this system to lesser success (if at all), and this is also a factor in Singapore’s widespread smartphone and broadband penetration which stands at one of the highest in the world.

 

Due to the political stability arising from the super-dominance of the People’s Action Party, Singapore also benefits from being able to engage in stable long-term planning that are planned in decades and not in 4-year blocs to take advantage of the election cycle. This is a historical advantage, as Singapore benefitted in its formative years from such political stability to implement long-term building projects, such as the construction of the MRT, which began in 1983 and was only completed in 1990, a date which was already 2 years ahead of schedule. The demands of the ‘Smart Nation’ initiative are equally onerous. The ambitious Smart Nation Platform, which aims to achieve ‘pervasive connectivity, along with infrastructure and common technical architecture [to] allow citizens, businesses and government agencies to leverage technology towards improving lives in a Smart Nation’, will take time to implement across the different levels of society, while more subtle normative approaches, such as the encouragement of an entrepreneurial spirit among the youth, will similarly take decades to reap its fruits. For all of the political ramifications that such a state of political hegemony might entail, it is at least undoubted that such stability is beneficial for national development.

 

Social aspect of technology

While the economic benefits of encouraging technological entrepreneurship are apparent, it is perhaps more curious to note the Government’s stated social aims in encouraging such technological development. PM Lee has described Singapore’s ‘Smart Nation’ vision as being a ‘nation where people live meaningful and fulfilled lives, enabled seamlessly by technology, offering exciting opportunities for all’, and further described the role of technology in our ‘daily living’ and ‘communities’. Even more remarkably, PM Lee described how technology can be utilized to develop a more pleasant district to the Jurong Lake District, of all places; one would have expected his emphasis on a technology-driven ‘Smart Nation’ approach to suggest other forms of recreation that rely more heavily on technology than a park, which is attractive to many because of its peaceful lack thereof.

 

The obvious examples of how such social aims can be achieved through technology is through developments that help us more efficiently do things that we already need to do. For example, the development of the Citizen Connect Centres will help citizens access Government services, while the Smart Elderly Monitoring and Alert System and Tele-medicine systems can help provide better healthcare to less mobile individuals. Ideally, such systems can reduce the time spent on carrying out these processes through less advanced means, thus allowing us time for increased social interaction. Furthermore, such systems may aid us in increasing the quality of our interactions; medical technology, for example, is heavily dependent on the responsiveness of its care in emergency situations, and the quality of its advice is hence proportional to the responsiveness of medical technology.

 

However, the more interesting technological developments are through the use of technology to develop opportunities for social interaction where there were none before. The obvious example would be online dating portals, which have transformed the nature of modern romance altogether. More platonically, mobile applications such as Meetup have allowed individuals to, well, meet up for recreational sports, and PM Lee has also noted the development of websites such as hoodchampions.sg, which organizes neighbors to pursue common hobbies such as gardening or exercise. In a similar vein, it is also heartening to note how technology has played a crucial role in levelling the playing field for youth, as Singapore Computer Society President Howie Lau has noted that ‘tech really creates a platform for individuals to break through’ because ‘many folk in the tech industry start with different backgrounds, but with the right level of curiosity and willingness to learn, unlearn and relearn’. Indeed, through the encouragement of less orthodox and more practical learning methods such as hackathons, as well as the increased ease of access to technology in Singapore, it is hoped that technology will not only transcend physical distance, but also social strata.

 

Conclusion

Singapore’s ‘Smart Nation’ initiative charts a positive direction for Singapore’s development, and despite its bold and ambitious vision, Singapore remains well-placed to achieve this goal. Notwithstanding the economic and institutional benefits to be reaped from this vision, the social benefits that can be reaped from this approach represent an even more valuable dimension of development that Singaporeans can look forward to.