How Singapore businesses can gain an advantage in uncertainty
THE business environment is increasingly challenging, with a fast-changing macroeconomic environment, high inflation, growing pressure around climate change and sustainability, supply chain disruptions and a shortage of talent – to name just a few issues.
Against this backdrop, innovation has a significant role to play in helping businesses in Singapore manage risk and stay competitive.
This is recognised in the recently announced Budget 2024, which sets out to push innovation frontiers across the entire economy and harness technology across key sectors. Notable aspects include artificial intelligence (AI), the green transition and talent upskilling.
AI in action
AI offers a range of opportunities for businesses, from streamlining complex processes and enhancing fraud detection, to enabling deeper insights into customer behaviour, preferences and risk profiles.
And now there is generative AI, which has rapidly gone several steps further in a matter of months. Tools such as ChatGPT dig even deeper into available data to create textual or visual content. Such advancements in AI are set to unlock experiences and use cases we never thought we could achieve before.
AI will be a tool to drive growth, and is not just a shiny toy for the tech team. According to FIS’ Global Innovation Report, 51 per cent of companies in Singapore are already using AI, and a further 41 per cent anticipate adopting the technology within the next 12 months.
As announced in the Budget, Singapore will invest S$1 billion over five years to enhance its AI capabilities. Businesses here must embrace AI and find ways for it to work in harmony with the human workforce, or risk getting outpaced.
Navigating the green transition
In addition to AI, interest continues to grow in environmental, social and governance (ESG) matters. Companies are becoming increasingly aware of the risk posed by climate change and shifting consumer sentiment around ESG.
The effects of climate change are all around us and the urgency to address them is evident. This year’s Budget includes a S$5 billion fund to invest in clean energy, as Singapore works towards net-zero emissions by 2050. Singapore regulators have also previously proposed to roll out mandatory climate disclosures for public and large private companies.
Each industry has its own unique exposure to climate risks and the clock is now ticking to ensure they can measure, manage and disclose them.
This will spur investment in product, service and operating model innovation, which are likely to deliver the most visible and tangible results. We are also seeing growing interest from companies for climate risk modelling capabilities.
The best way to gain a competitive advantage is to embrace the right technologies. For example, carbon footprint tracking relies heavily on data and modelling. AI and machine learning can resolve this challenge by connecting and processing disparate data sets.
Tech talent of the future
Talent is another key issue. A formal education has its value, but when it comes to working in tech, the most essential skills will not be found in a textbook. We are moving into a world where skills and experience take the lead, and creativity and real-world application are valued above all else.
With AI enabling more automation, the ability to think outside the box and solve real-world problems has never been more critical. Many entrepreneurs, with diverse backgrounds, flourish in the Singapore tech scene because they dared to think differently.
Companies will start to look for talent in non-traditional places to discover new skills. However, as technology evolves at an unprecedented pace, companies in Singapore must also invest in a culture of continuous learning. This can be done in tandem with new initiatives and funding in the Budget to upskill and reskill employees.
Ultimately, it is not just about leveraging technology as a tool, but using it to fulfil its potential as a force for good. As we transition to smart companies and economies, the ability to understand where technology is transforming an industry and how to integrate it will help one thrive and stay relevant in the future.
The writer is managing director, capital markets at FIS
