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Opinion

Small countries can punch above their weight in the global digital economy

The most important factor in achieving outsize impact is talent

| Singapore
A mosquito-trapping robot used by LHN group, which runs the Coliwoo hotel chain, in a hotel in Singapore.   © Reuters

From Lew Chuen Hong, chief executive of Singapore's Infocomm Media Development Authority.

Governments, economies and societies are increasingly digitalized. The consequences of whether a country can successfully ride the digital wave is disproportionately greater for small countries and, in some instances, existential.

The new digital era presents unique opportunities. Many of the constraints faced in the physical world, such as size and geography, do not exist in the digital domain. It allows small countries to generate outsize influence and punch above their weight. This requires strategic investments in hard and soft digital infrastructures, in talent and in innovative regulations.

Equally important is the need to catalyze collaboration between governments, industry and society stakeholders to redefine technology for a better future. A strong digital economy requires robust digital infrastructure. The need to be at the forefront of hard infrastructure is a given -- pervasive high-speed last-mile fiber broadband and cutting-edge fifth-generation, or 5G, mobile network coverage.

In this regard, small countries possess advantages. Singapore achieved gigabit fiber internet to all residential and commercial customers in 2013, and this supported the proliferation of digital services. We continue to be at the forefront of 5G deployment, with 50% nationwide coverage ahead of the end-2022 target.

There is also a need for a new class of soft infrastructure, which we term "digital utilities." Utilities, unlike digital platforms, are neutral and open underlying architectures not controlled by a specific company. Businesses can then build value-added services or platforms on top of it. Key utilities include digital identity, enabling digital invoicing and payment, digital attestation (the means to prove authenticity and provenance) and digital data flows.

An example is SGTradex, which Singapore launched in July 2021. A neutral data-sharing utility, it facilitates trusted data-sharing across many partners in the often-fragmented supply chain ecosystem. This strengthens the financing integrity of trade flows, provides a secure means to transfer title ownership and enables optimization of logistics functions for maximum efficiency. By providing common standards and trusted functionalities, we enable secured transactions and data flows so that any business set up in Singapore is "born digital."

The key to digital impact, however, is talent. Talent is scarce, even more so in a small country like Singapore. It is therefore key to invest heavily in a disciplined manner, to continuously upskill our workforce at all levels from fresh graduates to midcareerists, and across universities and polytechnics. This requires working closely with industry to run structured on-the-job training and development and to be close to the fast-evolving needs of industry.

Digital technologies are impacting and disrupting all industry sectors, thus enabling our workforce to remain competitive globally. Around 80 out of the top 100 tech companies have a presence in Singapore. We also have one of the highest proportions of women in our digital and tech ecosystem.

There is also a need to invest in uplifting the broad base of enterprises. At the heart of every economy sit small and medium-size enterprises. They represent about 90% of businesses and more than 50% of employment worldwide. Broader change can only happen if we empower this large base to harness digital opportunities. COVID-19 made digitalization much more visceral for small companies, and we observed significant uptake for our SME Go Digital programs.

Going forward, it is key to maintain that momentum and lock in these gains. This ranges from providing affordable yet advanced digital solutions, which are increasingly powered by AI, to meet key business needs such as sales or inventory management, to a "CTO-as-a-service" program, where aggregated demand allows SMEs to tap chief technology officers whom they would otherwise be unable to access or afford.

Small countries often have more open economies and can lead when it comes to catalyzing cross-border economic integration in the digital domain. Singapore has worked closely with our Association of Southeast Asian Nation neighbors on the development of the ASEAN Data Management Framework and a set of model contractual clauses. This reduces negotiation and compliance costs for cross-border data flows.

Similarly, we worked with like-minded partners to pioneer digital economy agreements, the digital twin of traditional free trade agreements. Partnerships today include Chile, New Zealand, Australia, South Korea and the U.K. By aligning digital rules and standards, supporting trusted data flows and encouraging cooperation in areas like digital identity, AI and data innovation, companies cannot only be born digital, but be born global.

Finally, there is a need to carve out space to think ahead. Digital and tech cannot be viewed in isolation. Digital is a commons. The impacts, both risks and opportunities, happen at the intersections of tech and other domains: tech and maintaining trust, tech and doing good, tech and building the next wave of products, and how tech holds the potential to tackle the pressing issue of sustainability.

The Infocomm Media Development Authority's Asia Tech x Singapore Summit, which begins today in Singapore and will run until Friday, will bring together business, government, society and industry thought leaders from around the world to help shape that collective digital future. The digital future is here. It is up to all of us to seize the opportunities.

Small countries, if they are nimble, can make an outsize impact.

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