Mr Ren Xianliang,
Vice Minister of Cyberspace Administration of China,

Distinguished Guests

Ladies and Gentlemen

INTRODUCTION

1. Good morning.  I am pleased to join you today at the inaugural Singapore-China Digital Economy Forum which marks a new chapter in the growing economic collaboration between China and Singapore.  

2. At the outset, I would like to extend a warm welcome to Vice Minister Ren Xianliang and the distinguished delegation of Chinese entrepreneurs to Singapore. I am also happy to see many Singapore companies who are present here today. Your collective presence underscores the potential business opportunities arising from the confluence of two major trends: digitisation and the rise of ASEAN’s consumers.  

DIGITISATION

3. The advent and adoption of disruptive digital technologies such as big data, the Internet of Things, Artificial Intelligence, and the Cloud is revolutionizing the global economy and business models. Digitisation enables companies to achieve greater scale quicker, penetrate new markets more swiftly, understand and service their customers better, and to be more productive.

4. China has been at the forefront of this digital revolution. China has squarely embraced the digital economy, which already contributes 7% to its GDP. In 2014, total online transactions in China reached almost 3 trillion[1] renminbi. 3 of the world’s 10 largest Internet companies (Alibaba, Tencent & Baidu) hail from China. Many other Chinese enterprises have also entered this space, providing a wide spectrum of innovative online services, such as Wechat for online media consumption, and China Distance Education Holdings Limited (CDEL) for online education.

RISE OF THE ASEAN CONSUMER

5. Closer to home, the number of middle class consumers in ASEAN will double by 2020[2], reaching approximately 400 million. But ASEAN is a heterogeneous region with great diversity in culture, degree of urbanization and economic development of its 10 member states. However, the growing digital activity of ASEAN consumers will enable businesses to gain a more nuanced understanding of local consumption patterns, to create and deliver localised products and services in a more targeted manner.   

6. 194 million new internet users are expected to come online in ASEAN by 2020, and digitisation is projected to generate an annual economic impact of 625 billion Singapore dollars by 2030[3]. The confluence of these two trends presents substantial and growing opportunities for companies to target ASEAN consumers through the digital economy.  

DIGITISATION AS A KEY PILLAR OF GROWTH

7. Recognising these trends, the Government is committed to growing Singapore’s capacity to contribute to and benefit from the growth of the digital economy. Notably, this sector is expected to create exciting and good job opportunities such as 2,500 data analysts and 2,000 e-commerce related jobs by 2020. Hence, it will be a key area of focus for the Committee on the Future Economy which aims to develop economic strategies to position Singapore well for the future.

8. Singapore is well-positioned to serve as a centre for digital businesses in ASEAN, and the wider Asian region, for several reasons.

SINGAPORE’S VALUE PROPOSITION FOR DIGITAL BUSINESSES

9. First, we offer strong and highly reliable ICT infrastructure and capabilities. Singapore has good submarine cable capacity that offers high speed connectivity and 50% of data centre capacity in ASEAN. Beyond physical infrastructure, under the Research, Innovation and Enterprise 2020 Plan, the Government has committed to invest $400 mil to develop the services and digital economy in Singapore.

10. Second, we are well connected to and have a deep knowledge of ASEAN markets. Companies can draw from the large pool of regional talent here to better understand the cultural diversity and operating environment of ASEAN markets and their consumers.

1. For instance, a local company Garena offers a digital payments service, AirPay, which allows cash to be converted into online credits for e-payments. It has almost 88,400 touch points across Southeast Asia. This is critical to reach the large number of the unbanked in most ASEAN markets.

2. A*STAR’s Institute for Infocomm Research, in partnership with Baidu, has also established an R&D laboratory on foundational Natural Language Processing technologies for Southeast Asian languages. This would enhance, for example, Baidu’s search engine capabilities for input in native languages.

11. Third, we have built up a vibrant and growing ecosystem of leading digital companies in Singapore, which offer a full suite of services. This includes ICT service leaders like Accenture and IBM; professional services firms offering Asian consumer insights like McKinsey and Nielsen; and digital marketing consultants like Ogilvy One. Local service providers like Singtel and Certis Cisco are also building up strong capabilities in analytics and cyber-security. In addition, as one of Asia’s most conducive start-up environments, we have a good pipeline of tech start-ups which can inject innovation and add value to digital businesses.  

12. Companies across diverse industries such as consumer goods, financial services and manufacturing have also established strategic global and regional IT and ICT-enabled functions in Singapore. This helps to generate sophisticated demand for digital services. The Government is also generating lead demand through efforts such as the nation-wide sensor network and other Smart Nation projects.

COLLABORATION BETWEEN SINGAPORE AND CHINESE COMPANIES

13. Leveraging on these strengths, Singapore can be an effective launch pad for Chinese digital companies as they move beyond China and into ASEAN in search of new markets and opportunities.

1. For instance, Lenovo established its Global Analytics Hub here in 2013. Its aim is to use big data analytics to further enhance its supply chain management, and derive customer insights and drive engagement from Singapore.