Introduction
I moved to Singapore several years ago, to an economy dominated by financial services, wealth management, consulting, healthcare, operational and hub services. A shift or natural diversification from the electronics and semiconductor industry was also underway as Singapore embraced technology. Venture Capital firms were formed and several North American and European firms came to town.
Being well located, well administrated and preemptive in finding growth strategies has helped Singapore grow into the bustling, prosperous metropolis it is today. As a city that has successfully pivoted from Entrêpot to manufacturing hub to services center, it now has its sights set on embracing the bleeding edge in technology.
The 143 page future economy report released earlier today tackles all these issues and presents a comprehensive view of what Singapore needs to do, in order to stay competitive, prosperous and to thrive in a world that is becoming increasing protectionist and populist in its mindset. Here are some of my biggest takeaways from the report:
- Improve global ties: Improve, consolidate and strengthen existing relationships with countries, and work with "like-minded" partners who have a similar liberal stance on trade.
- Promote trade throughout the ASEAN economic block, and invest in the region through infrastructure projects: Singapore is one of the largest foreign institutional investors in India and China and is aggressively building infrastructure in these countries.
- Create "deep talent" and preserve and curate "deep-knowledge" in Singapore: Singapore has to up-skill its population and empower them to contribute more to the global economy. Given that talented foreign professionals are entering and exiting Singapore continuously, a skills gap has been created. This systemic issue needs to be tackled urgently. The government wants to push hard to ensure that core subject matter knowledge and skills are grown and retained in the country.
- Boost private sector capital investment: Singapore's been doing this systematically over the last couple of years. Incentivising venture capital firms to set up shop in Singapore, and providing "patient" capital are some of the approaches Singapore will take. Essentially, the country needs to be patient or take a long view on innovation and wait for different patterns of thinking and innovation to set into the country's mindset.
- Greater digitisation: Encourage digitisation and digital transformation of traditional businesses.
- Create highly productive clusters: Create "clusters of mutually-reinforcing economic activities" such as Punggol and Jurong East. Essentially, creating a synergy between education, industry and the economy through geographic proximity (As observed in San Francisco and neighbouring Northern California).
- Progressive fiscal changes: Although Singapore already has progressive individual and corporate tax structures, Singapore wants the tax regime to help combat rising costs of living but also remain pro-growth at the same time.
- ITM's for each industry: Anticipate and react to changes in different industries - Singapore wants to devise "Industry Transformation Maps" (ITMs) for its major industries.
What the "Future Economy Plan" means for FinTech:
Needless to say, the strategies outlined above will benefit the FinTech scene in Singapore. We can look forward to progressive regulation, more startups daring to experiment with interesting technologies, an advisory and nurturing role played by government bodies such as the MAS, more patient, high quality venture capital aimed at solving regional and global problems and a shift in the way people think about their finances and the role of technology in their savings, transactions and investments.
Conclusion
These points are by no means comprehensive, I highly encourage you to read the original here. The next few years are going to be very interesting for Singapore and the rest of the world, and I look forward to seeing these strategies implemented in a way that they shape the economy of the future.