Singapore is heading towards the future. And the future – unsurprisingly – lies in digital-land.
The Finance Minister of Singapore, Heng Swee Kiat, has presented a very clear objective in the Budget 2017 speech presented in late February: jump on the digital bandwagon, so to become the country of reference in Asia for the next future. And pulling out a hefty amount of money from their wallet: S$2.4 billion (US$1.7 billion)
If you happened to dabble in the economics of the area, this move was expected – and it is a response to the establishment of the Iskandar Malaysia economic development zone in the area around Johor Baru – just on the other side of the bridge from Singapore – and its robust enticements with grants and tax breaks aimed to induce the establishing of digital companies.
Digitally serving the Asian Middle Class
The Singapore Government has spent his time doing its homework, and it shows. They have clearly understood that Asia Pacific will be the home of the majority of the global Middle Class.
This is what the OECD is predicting: by 2030, the Asian middle-class will become dominant in the world. Around 66% of this group will be based in Asia. This means two persons out of three. They were less than one out of three in 2009, less than ten years ago.
And middle-class thrives on data and digital services and products. So, the Singapore establishment is betting on the future. And they are quite sure they would win – so they are betting big.
This investment will be focused into 5 different directives.
SME support and development
Boost to Intellectual Property
Support to the companies’ global expansion
Growth of the local digital skillsets
Funds to bolster innovation
1 – SME support and development
Singapore is betting on nimble companies and startups. They wantto let them become the solid foundation which creates an enriching environment. And SMEs are quick to react and embrace the digital tools to compete in the world. The ‘SME Go Digital Programme’ wants to achieve just that: companies will be offered support to develop digital services, and to employ government-approved or off-the-shelf ICT solutions.
Companies and startups which are developing digital products will be able to receive funding and advisory support. Singapore wants to become the Silicon Island of the Pacific.
2 – Intellectual Property as a key to success
The tech companies will have access to a vast array of services to help them implement and develop IP programs and initiatives, through the assistance of the government research institute Agency for Science, Technology and Research (A*STAR) – the target is to help 400 companies develop their products in the next four years.
Also, A*Star’s Headstart programme will allow SMEs to enjoy discounted licences, and it will be extended to 36 months.
3 – Developing internationally to compete globally
The International Enterprise (IE) Singapore asserts that 37,000 local companies received support last year to increase their presence in international markets. Through the generous endowment of this plan, the Government intends to proceed full-force ahead, investing a staggering S$600 million (US$423 million) International Support Fund to help the companies scale up and internationalise.
And this action will come through a robust structural development of organizations and competencies.
The Singapore Government has set up the Global Innovation Alliance (GIA) as an aggregator of three three different elements. The first is called “Innovators Academy” – aiming to exchange local students with foreign students, and letting them work at tech companies.
The second is “Innovation Launchpads” – structures that will be established on different overseas markets, and will enable local companies connect with potential partners outside Singapore. The third is called “Welcome Centres” and will put in contact foreign companies with Singaporean companies to work on common projects.
GIAs are expected to be opened in Bijing, San Francisco, and other countries in ASEAN.
Another noteworthy project is the “Skillsfuture Leadership Development Initiative”, which aims to transform Singaporean workers into leaders, through specialized courses. The Government expects to train around 800 new leaders over the next three years.
4 – Raise up the local digital culture and critical skills
The digital capabilities are going to become a must: the Government aims to invest more than S$250 million (US$160 million) into developing this kind of skills, via different programs and courses (both long in-presence and short e-courses), and will focus on one critical field: data and cybersecurity.
As data becomes the most substantial investment and asset of the digital companies, there is going to be a huge demand for specialized workers in the field.
Also, to optimize the capabilities and skillsets of the Singaporean population, more efforts will be put into organizing nation-wide job banks and job matching services.
5 – More freedom for the pioneers
Singapore will become more flexible to accommodate the needs of the new technology players. It aims to establish areas where the companies could conduct their research uncluttered from local regulations (which to this day are very efficient, but somewhat strict), and will do its best to promote the adopting of new technologies for the good of the country.
Fields like Health and Transportation will be given a robust support, as well as the Financial and VC sector, especially if applied to innovative companies and products.
The government will also be investing money in innovation through established programs. These include a S$150 million (US$105 million) Public Sector Construction Productivity Fund, to develop better construction tech solutions; a S$500 million (US$352.5 million) to be placed into the National Research Fund (NRF); and last, a S$1 billion (S$705 million) for the National Productivity Fund (NPF).
All in all, it seems that Singapore is moving, and moving fast towards the future.
In the furniture sector: education and communication go digital
This influx of money, and the rationale behind it means that the Singapore Government is covering its bases to develop a robust digital infrastructure. And this means two main areas of intervention for the affected SMEs which operate in furniture: digital communications and e-commerce, so to present their productions in the area and overseas, and to profit from the digital demand of Asia, which is growing at much higher rates than the rest of the world; and the technical skills and infrastructure needed to achieve this goal, that is, the infusion of technical skills through training courses, especially in e-learning.
We can see that the modern development of web and social media have affected strongly the furniture industry in the most recent times. It is a new phenomenon – and it is evolving as it is developing, so it is a situation very similar to the Gold Rush of the 800s – everyone knows that there is a huge market, everyone is going there, but no-one has a real map of the opportunities offered by the development of the market, because we are still developing the tools that we are using every day to make it happen.
This is a very competitive – and interesting – market, and the ones who will profit more from the situation are the most innovative companies who want to expand further and occupy new markets and mindshares.
A sound digital strategy is – for sure – the key to beat the competitors.
And the combat ground will be on the displays of the mobiles.
The average ASEAN user already using the internet via mobile 21% more than the world average.
Techinasia, in this article, tells us that at the end of 2015 “there are already more mobile subscriptions than people around Southeast Asia” and the number is continuing to grow.
This means that the attention-grabbing actions to stay relevant will be fought mostly in the internet sector, ands the companies must be very attentive to that, if they want to continue to grow in the area or worldwide, that is. To profit from this long wave, the companies have to invest in developing a professional digital presence online. Glitzy websites in Flash and shoddy company e-mails based on public providers are not acceptable anymore to compete internationally – as their overall quality will be measured and defined by their web presence and social media interactions, which will become an all-important factor, on a par with the quality of their products.