A new creative industrial age is upon us, with traditional industrial sectors from retail to tourism being turned on their head by disruptive new entrants. Thanks in part to the advent of new technological advances, the global economy is now a landscape of constant transformation and accelerating change, and in order to survive, no company can afford to stand still.
“Companies are evolving. Industry structures are evolving. In the past, industries existed in very traditional silos. Now, the boundaries are blurring, disrupting traditional companies and jobs. That’s the challenge that we face,” says Tan Kiat How, Chief Executive of the Infocomm Media Development Authority (IMDA).
Amid this game-changing disruption, Singapore has positioned itself as a center of innovation at the heart of the world’s most dynamic economic region, with the introduction of strategic, entrepreneurial-friendly schemes, grants and policies by the government, to become Asia’s answer to Silicon Valley.
In recent years, Singapore’s robust infrastructure, ease of doing business and widespread technology adoption has seen it become a natural choice for American companies looking for a place to try out new ideas.
In 2011, U.S. banking giant Citi opened the Citi Innovation Lab in Singapore, which not only allows it to create pioneering transaction banking solutions, but provides a place for clients to test-drive them through live demonstrations. One solution created by the bank was last year’s launch of a banking chatbot, “Citi Bot” on Facebook Messenger that is capable of providing customer account information to users, a world-first for Citi in a social media network.
Payments firm PayPal Inc has also made Singapore its base for innovation, with the 2016 launch of its first lab outside of the United States. The company has since entered R&D partnerships with three of Singapore’s top universities.
They have been joined by U.S. firms as diverse as IBM, Thomson Reuters and MetLife, all of which have chosen the city-state in order to collaborate with customers, tech startups, universities and the Singapore government to roll out products and solutions for professional markets in Asia Pacific and beyond.
“The multinationals are here because of the vibrant start-up environment,” says Png Cheong Boon Chief Executive Officer of Enterprise Singapore. “Multinationals are not just using Singapore as a regional headquarters, neither are they just using it as a manufacturing location. They are using it for R&D. They’re using it for innovation because they want to tap the ideas from the start-up community in Singapore as well as from the region. They are looking at growing new business out of Singapore.”
Today, the sheer number of innovation labs that have opened in Singapore bears testimony to the confidence in the country’s proposition as an innovative ecosystem. “We try to make Singapore a great place for people to develop new products,” says Chng Kai Fong, Managing Director of the Singapore Economic Development Board (EDB). “We are
a natural place for talent around the region, and also for Americans.”
In fact, the country recently overtook tech mecca Silicon Valley as the world’s top destination for start-up talent, according to Startup Genome rankings. “It is not difficult for companies here to find talent who come from or who understand the individual markets,” says Mr. Png. “When American companies come here, it’s a melting pot. We have a talent pool that is very diverse.”
But in spite of its success thus far, the government has not rested on its laurels. Thanks to the Committee on the Future Economy’s (CFE) Industry Transformation Maps (ITMs), multinational corporations, banks, tech giants, start-ups and universities have all opened their doors to facilitate conversations, allowing for connections the likes of which are unlikely to be possible anywhere else.
“What is required to achieve a value-creating economy is a tremendous amount of collaboration between the public sector, academia, business people and individuals,” says Victor Mills, chief executive of the Singapore International Chamber of Commerce (SICC).
To ensure that the entire value chain, from multinational company to small start-up, can reach its potential in the changing global economy, the city-state’s Budget 2018 laid out a raft of initiatives to enable businesses to stay competitive and relevant, particularly on the digital front. One of these is the Productivity Solutions Grant, a restructured initiative to help SMEs in their digital transformation journey and provide support for adoption of IT solutions and equipment.
“What the ITMs do is make us think about innovation and transformation,” says Henry Tan, managing director of local business Nexia TS.
One of the largest accounting firms in Singapore providing audit, tax and professional advisory services, Nexia TS embodies the Singaporean spirit of seeking new ways of doing business for the future through partnership. “When I co-founded the firm together with my partner, we wanted to be a boutique corporate finance firm and our vision was that we would hand-hold SMEs towards growth, towards fundraising and expansion in the region,” says Mr. Tan, adding that the firm has since decided to acquire certain of these SMEs. “We acquired a data analytics company that not only will help our clients, but also our own internal process.”
Grappling with unfamiliar regulatory environments can be a barrier to businesses looking for new places to grow and create, with new ideas often stymied by out-of-date rules. But Singapore’s regulators have taken an active role in driving innovation. The Monetary Authority of Singapore (MAS) sandbox is one such example. It allows interested firms, both local and international, to test their products and services on real customers, allowing for the consequences of failure to be contained within the production environment. “Singapore is a testbed, because we can change and adapt our rules,” says Mr. Chng.
In the rapidly-changing economy of today, no company can innovate in a silo. Success will come from seeking out ecosystems in which to co-create. Through its combination of conducive regulatory environment, government policies, and vibrant business environment, Singapore has become that ecosystem – a place where new ideas are fostered, nurtured and allowed to become realities.
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