A very good morning to all. Let me congratulate all the winners, because without your efforts, we would not be here today celebrating your achievements and being good testimonies to what we can achieve as Team Singapore.

Some time back, I gave a speech at the Singapore Economic Policy Forum 2018 and I talked about the eight strategies essential for us to succeed in the next lap. Out of the eight, there was a particular one on agile regulations. Whenever we talk about agile regulations, people in other countries tend to think that this is an oxymoron. Regulations by definition cannot be agile. Yet in Singapore we keep talking about regulations being agile so that we can keep pace with the times, the evolving needs of businesses, and the evolving expectations of our people. And we keep saying that in fact, we need to keep our regulations agile in order for us to create the competitive advantages for ourselves, especially in a fast changing economy. So the question is, how do we get there?

So today let me expand on what I spoke about at the Singapore Economic Policy Forum. There are two ways to look at regulations - the conventional way is to look at it as purely defensive. Regulations are here just to prevent bad things from happening. This is quite a common perspective and there is nothing wrong with this perspective. But we need another much more progressive and proactive perspective of regulations. How can we use regulations to enable innovation? How can we use regulations to promote business opportunities?

This perspective needs to complement the conventional perspective but is not so commonly understood. So for example, the conventional philosophy of regulation could be mistaken as risk avoidance. If this is the only perspective that we take, then we will do many things to minimise, if not eliminate risk. And for all of us in business, in government, we would know that as you press towards zero risk, the cost will go exponentially higher. To achieve 99% assurance will take a certain cost. To achieve 99.9% assurance will be another magnitude cost. To achieve another 99.99% will be yet another magnitude of cost. It is clearly non-linear.

So increasingly, we will need to re-orientate our perspective to regulations. It is not about risk avoidance, it’s about risk management. If we take the perspective that regulation is risk management, then there is a trade-off between minimising risk and the cost incurred to minimise or control the risk. Beyond a certain point, the cost of minimising the next delta in risk will become so high that it does not make sense anymore. This is something that all of us in business and Government have to be very careful of, that we do not go overboard and end up with diminishing returns of risk management where the cost of risk management exceeds the benefits.

Having set that up as a philosophy, making regulations today and in the future will be increasingly difficult. There are four sets of challenges that we need to overcome today. There are two conventional sets of challenges. Firstly, in order to make good rules and regulations, we need to understand the sector deeply. That means the people making the rules must understand the sector deeply. Yet at the same time, the people having deeply understood the sector, must not be captured by the sector, or what we call regulatory capture. There is always this inherent tension. The people regulating the sector, if not in the sector, may not understand the sector fully. Yet if the people regulating the sector come from the sector, they may risk regulatory capture. So this is the first challenge - how to understand the sector deeply and yet not be captured.

The second conventional challenge is this – in every regulation there is a need for us to understand the issues in the sector and beyond the sector. Take competition regulation. Competition regulations need to consider the business case, the business opportunities and so forth. But competition regulations also need to consider consumer interests. So in order for good regulations to come about, the regulators must know not just the sectoral interest, but also the wider sectoral interest and be able to harmonise and internalise the two of them.

Having said that, there are new challenges that are evolving beyond these two conventional regulatory challenges. The third challenge is this – technology is moving very fast. Will our businesses and government regulatory agencies be able to keep pace or even stay ahead of the technological developments to know what kind of rules and regulations will be most needed for the future economy? For regulators to understand science and technology, is one thing. For them to understand the science and technology that will emerge and have an impact on business, is yet another order of difficulty. So this is not easy.

The fourth challenge is this - as society becomes more complex, as our rules become more complex, it is easy, perhaps even tempting, for us to withdraw into silos and only look at our rules in isolation. But this will not do justice to the expectations of our people. The question is, how do we as a system, create the environment where the regulators do not just look at issues in isolation? Instead, they are able to look across the different sectors and derive the most optimal outcome for society.

So these are the four challenges – knowing the sector well enough and yet not being captured, knowing the sector and the rest of society well to balance their interests, knowing the technology well enough to stay ahead of time and making sure that as we run more and more complex organisations and systems, we do not withdraw into our silos. That is why, I thought today’s theme of “Transforming Regulations Through Collaboration” for the seminar is useful.

So how can we overcome these four challenges? I have three suggestions on how we can do better through collaboration. The first set of collaboration is within Government and I think we have done much to encourage cross-sectoral collaboration within Government. If you look at the exhibits outside today, and in particular, Sunseap’s offshore floating photovoltaic platform project, it is good testimony to the kind of work we can do across sectors. This is a good example of who should regulate this. It is a floating solar panel on the sea. Is it the maritime agency? Is it the water agency? Is it the Energy Market Authority (EMA) since it generates electricity? Is it the environmental agency since it has an impact? It is probably all the above and more. But for the business, there’s only one agency – it’s called Government. For a business, it does not care about how many sub agencies there may be. This is why it is so important for our public servants to understand issues not just within their agencies, but to also collaborate across multiple agencies so that we do not make the environment any more difficult than it need be for our businesses. Because we were able to overcome our internal issues and establish new rules to allow Sunseap to grow this new idea of floating solar panels in the sea, it will become a new business opportunity not just within Singapore but also beyond. So this is the first thing – collaboration across Government agencies.

There is another collaboration that we need to strengthen – between government agencies and the Trade Associations and Chambers (TACs). Earlier, I mentioned that we need to know the sectors well and in-depth. Who can know the sector well and who knows the sectors best? Very often, it may not just be the Government agency running the sector alone. We must be in constant dialogue with the trade associations and the trade associations must also build up this capability to understand the needs of their businesses well so that they can make a coherent argument and have a coherent discussion with the Government agencies. So when the trade associations bring with them their considerations and the Government agencies bring with them their own considerations, when they match these together we will be able to make much better regulations.

Not only do we need to seek to make better regulations, we need to make better regulations at a much faster rate. This means that going forward, we must intensify the regular meetings between TACs and Government agencies. It is only through such regular, frequent meetings that we build up the in-depth understanding and trust of each other. Trust between the two that we are not just pushing for our individual sectoral interests, but trust to understand each other’s concerns so that we can come up with better regulations that benefit the environment.

There is a third area of collaboration we must strengthen and that is between Government agencies and the technological agencies. If we want to overcome our existing inadequacies and put in place enabling rules ahead of time, then we need to have a deep understanding of the evolving technological landscape. We cannot do this in isolation and we can’t wait for the technologies to emerge before we start thinking about the rules. In fact, the thinking about the rules has to move in tandem with the technological developments. This is the third area where I think we must strengthen our collaboration.

Having talked about the four challenges and the three areas of collaboration that we need to step up, I am very confident that if any society in the world can get its act together and turn regulations into agile regulations as a competitive advantage for its own economy, then Singapore and Singaporeans should have every confidence that we must be one of those at the forefront.

We are small enough to be agile. We are small enough for us to know each other very well and build the deep sense of trust between regulatory agencies, associations, businesses and other societal actors. It is because of this that we are confident that going forward, if we are able to have those agile regulations in place ahead of time, we will add a new pillar of competitive advantage to our society.

Going forward, if something new like fintech appears again, we will never need to ask if this is ‘fin’ or ‘tech’. As far as we are concerned, it is fintech and all our government agencies will come together across sectors, talk to the players in the sector, businesses in the sectors, talk to technology people ahead of time so that we can get the rules ahead in time to enable new businesses to grow and flourish. If we can do that, we have every reason to expect that Singapore will be very competitive going forward regardless of technological disruptions and changing business models.

I thank you very much for your efforts because it is not just testament to your achievements, but your effort is testament to what we can achieve together as a society, making sure that Government, businesses, technical partners and societal partners, all four parties, come together ahead of time to prepare for the future.