Singapore needs more inclusive tech innovation and partnerships to spur global recovery: DPM Heng

SINGAPORE can contribute to global recovery by taking on a more inclusive and collaborative approach in deepening its tech capabilities, as the local tech sector continues to be a bright spot for businesses and workers amid the economic fallout.

This comes as the global pandemic has brought inequalities into sharper relief in many societies, along with intensified geopolitical tensions between major powers and rising risk of technological and economic decoupling, said Deputy Prime Minister Heng Swee Keat at the annual Singapore FinTech Festival x Singapore Week of Innovation & TeCHnology 2020 on Monday.

Speaking at the virtual event, Mr Heng noted that the pandemic has created "a unity of purpose" in startups and businesses from Silicon Valley to Shenzhen, as these players find new solutions to cope with Covid-19 and new technologies that will shape a post-pandemic world.

The number of international collaboration and open access publications increased during the pandemic, a trend that Singapore can be a part of.

"We must sustain this spirit of working together beyond this crisis. To build on this momentum of change, we must continue to invest in innovation," said Mr Heng.

"Singapore can contribute to global recovery by continuing to invest in innovation and working in collaboration with Asia and the world."

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To avoid widening inequality, the Republic must speed up the time that it takes for the last company and worker to access and benefit from technology.

Many small and medium-sized enterprises (SMEs) are not making use of digital technologies, much less training their workers for the digital world, said Mr Heng. "It is imperative that we bring them on board the digital economy."

While the government has been helping SMEs access business-to-consumer platforms, digital marketplaces for business-to-business commerce across geographies were found to be more limited.

The Business sans Borders (BSB) initiative was hence started to digitally connect SMEs around the world and further expand their markets. The platform aims to help SMEs access a much larger eco-system of suppliers and buyers, and also connects businesses to logistics and financial services providers. Using artificial intelligence, BSB enables SMEs to discover prices and sales opportunities in a much larger global marketplace, said Mr Heng.

"Some of them will inevitably be disrupted by technology. But many others simply need some help to use technology to raise productivity and boost their value propositions," he said.

Mr Heng also stressed that the foundation for a more inclusive and sustainable post-pandemic future lies in the creation of a more resilient global commons. One key element of this is stronger governance on the use of technology. Fair and ethical rules that are generally accepted will allow more people to trust and use technology, he said.

Strong governance applies not just to how technology is used, but also to how data is shared as many people transact with different platforms and businesses daily.

One such area is in finance. People bank with different institutions, trade on different platforms and purchase products from different insurers. "When we need to consolidate our finances, this is often onerous," said Mr Heng.

To address this common painpoint, Singapore on Monday launched the Singapore Financial Data Exchange, the world's first public digital infrastructure that allows a person to sign-in using his national digital identity, Singpass, and provide consent to retrieve personal financial information from various accounts in banks and government agencies.

With this, Singaporeans can now view their consolidated financial information on a single platform to make more informed and holistic financial decisions. Data from each source is encrypted and transmitted through the system without being stored.

Such an approach to trusted data sharing - involving both innovation and conducive regulations - can potentially be applied in other areas and in other jurisdictions, said Mr Heng.

He also said that the local fintech scene is a key focus in Singapore's quest to continue developing as a global financial hub.

Last Friday, four digital bank licences were issued in a move to liberalise the financial industry. "This will strengthen Singapore's financial sector for the digital economy, and improve access for currently underserved businesses and individuals," said Mr Heng.

A new Asian Institute of Digital Finance was also launched on Monday, hosted by the National University of Singapore and the Monetary Authority of Singapore. One of the institute's first projects is to build a data-sharing platform that can train models to improve credit assessments.

This allows lenders to make better credit decisions and offer better rates, and improve the financing of small businesses to enable a stronger post-pandemic recovery, said Mr Heng.

Blockchain is another area that Singapore is deepening its capabilities in. While the blockchain ecosystem here has grown significantly in the last few years, there are also known limitations such as the energy efficiency of processing blockchains and the ability to connect different blockchain systems.

Against this backdrop, the government is launching the Singapore Blockchain Innovation Programme that aims to expand blockchain research to the needs of the industry and also look into scalability and interoperability of blockchain solutions, said Mr Heng.

Overall, the government invests about 1 per cent of gross domestic product on research and development every year. Mr Heng said plans for the next five years will be announced later this week.

Beyond investing in innovation, Singapore is also strengthening collaboration such as through the Open Innovation Network which brought together startups and corporates to address common industry challenges.

As Singapore creates a more inclusive future, it must also do so in a sustainable manner, said Mr Heng.

"As economic recovery picks up pace, we see that emissions are also beginning to rebound. As a low-lying city state, many parts of our country will be submerged by the end of the century if we did nothing."

Within the decade, the government will deploy at least two gigawatts of solar - almost 3 per cent of Singapore's electricity needs - by 2030.

The government also aims to phase out all internal combustion engine vehicles here by 2040. It will accelerate the deployment of electric vehicles and explore smart charging technologies that can help with grid stability and enable higher solar deployment, said Mr Heng.

He noted that such sustainability efforts can in turn create economic growth opportunities. For example, the commitment to phase out internal combustion engine vehicles was one reason Hyundai decided to locate its new electric vehicle manufacturing facility here, even though Singapore does not have a traditional automotive manufacturing industry.

On a broader scale, Singapore can also contribute to a green recovery in Asia, said Mr Heng, noting that the government is exploring how the Republic can serve the region as marketplace for high quality carbon credits, and to provide technology-enabled verification systems for carbon solutions.

"We believe that growth and sustainability can go hand in hand, and technology and innovation can offer solutions to achieving both. Just as we innovated to cope with the pandemic, we must also use technology and innovation to emerge stronger from this crisis," said Mr Heng.

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