SPEECH BY MR S. ISWARAN, MINISTER OF TRADE AND INDUSTRY (INDUSTRY), AT THE WORLD BANK GROUP’S GLOBAL INNOVATION FORUM ON 5 OCTOBER 2017, 9.10AM, EMERGING MARKETS INSTITUTE @ INSEAD

Distinguished Guests,

Ladies and Gentlemen,

Good morning.

Introduction

1.         It is my pleasure to join you today at the World Bank Group’s Global Innovation Forum.  To all of you who have joined us from overseas, a very warm welcome to Singapore.  

2.         Let me begin by congratulating the World Bank Group and its partners – Singapore’s Standards, Productivity and Innovation Board (SPRING Singapore), INSEAD’s Emerging Markets Institute and the National University of Singapore (NUS) – on this inaugural Global Innovation Forum. 

3.         Singapore and the World Bank Group enjoy a strong partnership, which was one of the reasons the World Bank Group decided to expand its Singapore office to create its first Infrastructure and Urban Development Hub here.  And, we are delighted that the World Bank Group has chosen to host the inaugural Global Innovation Forum in Singapore.  We share the World Bank Group’s perspective of innovation as a key driver of competitiveness and also of future growth, and this is reflected in our national policies and economic strategies.

 

A new phase of digital transformation is taking place globally, and Singapore is well-positoned to capture the Oppotunities

4.         The forum’s focus on exponential technologies is apt in the context of a new age of digital transformation that is occurring globally.  Digital technologies are disrupting value chains across industries but they are also creating new opportunities and possibilities. The transformation will be particular relevant in the context of Asia, to meet its growing needs, driven by rapid urbanisation and rising middle class.  The Brookings Institution projects that by 2022, the global middle class could be consuming about US$10 trillion more than in 2016, with four-fifths of this additional spending coming from Asia.

5.         Digitalisation is expected to contribute US$2 trillion in additional economic output by 2020[1].  It will also – and I think this is crucial - help to level the playing field across the spectrum of enterprises, from startups, small and medium-sized enterprises (SMEs), to the large corporations and multinational corporations (MNCs).  Firms who succeed in their digital strategy are the ones that will prevail when they participate in the opportunities created by innovation and digitalisation and are able to sustain their competitiveness.

6.              We believe in Singapore, given our infrastructure and assets, we are well-positioned to capture opportunities that arise from exponential technologies.  IMD World Competitiveness Centre ranked Singapore as the most digitally competitive country in 2017[2] - this is just one indicator. I think the larger, and perhaps more important measure, is how we are sustaining investment in capability building and I will elaborate a little further.

7.         I want to make one further point.  This emphasis on innovation and continual investment in capabilities is something we emphasize in our recent report by the Committee on the Future Economy (CFE) – committee appointed by the Prime Minister, co-chaired by the Finance Minister and myself.  The aim was to assess trends, both technological and economic, to see how Singapore can position itself for opportunities in this region and beyond.

 

Singapore remains committed to create an environment that enables innovation

8.         I want to talk about what we’re doing in Singapore to foster an innovative environment.

9.         First, because we recognise that innovation is a cornerstone of our economy, we want to foster a regulatory environment that enables innovation.  This is challenging given the multi-faceted nature of innovation that cause disruptions in many areas.  Therefore, we need an approach that allows regulators flexibility.  Between, on the one hand, facilitating innovation, and on the other hand, not compromising the overall system stability.  A case in point is fintech. Fintech innovations can disrupt financial services in a very fundamental way. But if we ignore them, then in the medium to long term, they may overwhelm the system as we know it. Therefore, what we have done through the Monetary Authority of Singapore (MAS) is to create a regulatory sandbox – a space, both physical and virtual, within which innovation can take place. Through the sandbox, we can learn lessons from it and then see how we can then extrapolate from that into a system-wide application.

10.       Another area is investment. It is important that government investment in innovation or R&D is maintained at a steady tempo and does not become cyclical by responding to buffeting from general economic cycles. The reason is because innovation is a long-term effort. In our context, we have these 5 year cycles through our Research, Innovation and Enterprise Council (RIEC). And in the most recent cycle, from 2016 to 2020, we have devoted $19 billion towards innovation and R&D efforts across a spectrum of areas - from advanced manufacturing and biomedical sciences to urban solutions and ICT.

11.       The third element is to create an ecosystem that can support the evolution of startups.  We are looking for startups to come in and try out new ideas.  This is easier said than done because there are certain areas in the world which we think of as the hubs for innovation. But what we are trying to do here (in Singapore) is, through branding and creating a confluence of efforts, create opportunities for startups from around the world to come here, and through Singapore, into the region, where there are exciting possibilities.  We have launched the StartupSG brand, branding ourselves as a place for innovative startups.  And at the same time, we are also working on various initiatives.  The most recent of which was, something that occurred two weeks back called SLINGSHOT@SWITCH, where we had about 900 startups from around the world who were here to compete, to present their ideas and also network and understand better, the market opportunities in Singapore and in the region.

12.       Another element is international networking.  Something that we have emphasized because, today, especially for startups and SMEs, it is no longer just about our domestic activities or having a linear approach to development. Indeed, international collaboration becomes a critical part of the process of ensuring that innovation is competitive and sustainable. We have launched another initiative called the Global Innovation Alliance (GIA), where we will link up Singapore with opportunities in innovation hubs around the world. We will explore opportunities not just in the familiar territories like Silicon Valley or Israel, but, importantly, also in our region – whether it is Jakarta or Surabaya, whether it is in Bangkok, whether it is in other parts of China, in India and so on. These are important hubs of innovation and areas where we believe, through greater interconnectivity, we can achieve significant outcomes, particularly those that are relevant to our part of the world.

13.       A final point I will make on our innovation efforts is on encouraging collaboration. I was just at an event earlier this week which epitomises this.  One of our large local enterprises, ST Engineering, initiated an incubation platform called Innosparks, where they bring in startups and early-stage companies with an engineering focus. And then they add to it their own engineering capabilities and market access. So it is not so much about the financial capital but it is about the intellectual capital and capabilities that are being offered. And in that process, it is a win-win proposition for start-ups, early-stage companies, it is access to new pathways and capabilities that they did not have. For the large enterprises, it is window into innovation – for them to see what is happening in the startups and how they can benefit from them.

14.       I want to just touch on one or two other things that will be relevant to the overall discussion as well. When we talk about innovation, it is about ensuring that people benefit from it, both as consumers but also in terms of the job market and the economic opportunities. And a key element of that is ensuring that their skills remain relevant and updated.

15.       This is where we have placed emphasis on lifelong learning. To make it a part of the culture under the overarching brand called SkillsFuture. Every single Singaporean, no matter what your area of industry focus. It is about understanding what learning pathways are available for your industry or your vertical and even in adjacent areas. And then creating the pathways and programmes which will enable them to acquire those skills. So we have been working on this in a very systematic way – across various verticals. We have 23 Industry Transformation Maps (ITMs), these are for 23 sectors that account for about 80% of our GDP. And in each of these, there are a few key pillars. There is a pillar around innovation, there is a pillar on technology and adoption for productivity purposes, there is also a key pillar on skills. In each of these sectors, there is a skills roadmap which will allow the people who are working in those sectors to understand the anticipated evolution that the sector will undergo and how they can participate in the programmes that will help them acquire the requisite skills.

16.       As you can well imagine, this is a dynamic process because the requirements keep changing.  But this is why we have created tripartite partnerships – between industry, unions and the government – coming together to look at sectors, for example the Electronics or Retail sector, to see what the evolutions taking place are and how people in these sectors can adapt in order to stay relevant and competitive.

 

Conclusion

17.       One last thing I want to note is that it is important to demystify innovation. Innovation is not just about deep technology or “high tech”. Very often innovation can be done in a simple way - in terms of a business model or the way you deliver a service, which can make a significant impact on people’s quality of life and what they can aspire towards.

18.       I think the work that we do as policymakers, working with international organisations such as the World Bank, and educational institutions, like Insead and NUS, must raise that awareness – that innovation is something that all of us can achieve regardless of our size as a company and the stage of our economy and regardless of where we are in the workforce. All of us have a part to play. Thank you.