Digitalisation in Singapore


published on July 25, 2018 
Interview with Dr. Paul Weingarten


If the topic of digitisation in Germany is written on the agenda, it can be expected that you will not just get a plain definition for the term. The repeatedly mentioned keywords are “disruptive technologies”, “innovative business models” or “autonomization”, which in turn is often summarized under the term “Industry 4.0”. But today we want to talk about Singapore.


Please give us a brief insight into what is meant by the term digitization in Singapore.

In Singapore, digitization is mainly connected to “advanced manufacturing” and “Industrie 4.0”, i.e. to the transformation of manufacturing processes. Focus is laid upon robotics, automization as well as upon the use of cutting-edge technologies. The industrial transition becomes particularly evident in the fields of research and development. Singapore has already placed significant investments in state-of-the-art institutions focusing on the analysis of manufacturing data, virtual process mapping as well as on digital solutions for manufacturing processes. In 2018, the Singaporean government continues to invest major financial support into the digitization of small and medium-sized companies. This special focus on “Industrie 4.0” is related to the stated goal of having Singapore take the lead in the field of “Smart and Green Megacities” in the near future.

Digitization is a cross-industry and cross-company topic. How do you assess the current situation in Singapore - Has society already internalized the topic, do companies understand the change or is it more likely to try and endure the topic? Which sectors are already on the road to success, which are lagging behind, maybe even traditionally?

Digitization has reached the social and political core of Singapore. Nevertheless, some industrial sectors still rely on electricity and traditional assembly line production (“Industrie 2.0”). Even in modern Singapore, many industrial companies still shy away from venturing investments in automization or even digitization projects. Further to the high tech industries (e.g. precision mechanics, electronics), the IT service sector as well as to research, development and education, digital workflows are gaining more and more ground in the field of logistics. Singapore also tries to promote the digitization of the chemical industry which is rather considered to be a latecomer in this field. These modernization efforts are supposed to not only increase the efficiency, but to also result in reduced emissions.

What challenges and opportunities do you see for companies that already work locally to master this rather difficult mammoth task?

Aiming at taking a lead role in ASEAN, Singapore actively promotes the digitization process. Companies investing in digitization programs may thus benefit from the government´s creative drive and maybe even from public subsidies. On a regional scale, Singapore´s rapidly progressing digitization clearly outperforms the neighbor countries. Major challenges might arise though from the existing legal framework. In particular, the Personal Data Protection Act – regulating the collection, storage and processing of personal data – and the new Cybersecurity Bill will definitely increase the compliance requirements to be met by the companies. Successfully integrating trained workforce into the new digital workflows or headhunting qualified personnel with IT expertise might prove to be another key challenge.

What points must be given special attention in the transformation in the Philippines (for example: cybersecurity, data protection, change management, cloud computing, ERP systems, (tax) compliance systems, digital payroll, value change, blockchain technologies, etc.)? Do you see local cultural, social or economic advantages that speak in favor of an easier transformation?

The technical changes related to the digitization also involve legal implications on different levels. First of all, focus should be laid upon data security. The Singaporean data security legislation is regulated in the Computer Misuse and Cybersecurity Act. Within this Act, several offences regarding computer use and data handling are penalized. The Cybersecurity Bill also needs to be respected, stipulating strict requirements when dealing with crucial information structures. Last but not least, the Personal Data Protection Act also requires attention whenever and wherever personal data are involved.
The overall economic and social conditions for a continuous digital transsformation couldn´t possibly be any better. Singapore is considered to be particularly innovative, disposing of an excellent digital network. The government has been setting a good example for years already by practicing paperless administration (E-governance). Furthermore, the government continues to encourage business companies to sustainably support and promote the digitization process, offering attractive funding incentives. The population as well proves to be strongly technophilic – the insular state counts more smartphones than inhabitants.

The digital change needs to be lived up to and promoted by the company leadership in order to prevent the transformation from being jeopardized. Does the local government provide support and funding opportunities for the first steps towards digital transformation? Are there investment programs to attract ambitious digital pioneers? Have incubators been installed in order promote innovative business models and to accelerate e.g. the establishment of start-ups?

The Singaporean government already introduced several initiatives aiming at supporting business companies upon implementing state-of-the-art technologies, and at attracting more start-up companies to the insular state. Looking at the 2018 budget, the promotion of innovation is confirmed to be one of the country´s major economic pillars. In this context, the government offers the so-called Productivity Solutions Grant which comprises several loan schemes and may in fact cover a major part of the expenses incurred upon implementing digital transformation. State support is also available for digital training programs, e.g. in relation with data analysis or cloud computing. Additionally, as of 2018 the applicable tax deduction for research and development expenses will be raised. Last but not least, the Agency for Science, Technology and Research and SPRING Singapore operate several platforms providing medium-sized companies with valuable information regarding digitization. We have to bear in mind though, that not all of these support and funding programs might be accessible for foreign enterprises. 

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