In an attempt to boost innovation in private sector, Singapore’s government has decided to support technology startups by buying their products and services. The general practice around the world for decades has been to provide grants or some kind of subsidy to small and medium sized tech startups as well as to tech conglomerates as an incentive to fuel innovation. That approach is being replaced with a demand driven model. The city-state had recently announced the broader objectives of the various reforms geared towards making it a Smart Nation. The change in policy, from grants to buying the services of tech startups, is one of the strategic moves to boost the Smart Nation initiative.
The eventual objective of this strategy is to spur innovation in private sector, to fuel growth of small to medium sized tech startups and to re-skill people so they don’t get stuck with jobs that are becoming increasingly obsolete. There has been substantial erosion of the conventional middle class and that needs to be stemmed, not by holding onto jobs that are of depleting significance but by creating new jobs that will stand the test of time in the near future. It is quintessential that technology and digital integration leads to equitable growth so it can help everyone, especially the vast middle class in Singapore.
Vivian Balakrishnan, Singapore’s foreign minister and also the minister-in-charge of Smart Nation, has reportedly said the city-state intends to remain an omnipotent trading hub and also emerge as a high tech hub. Trade has always been one of the pivotal foundations of the Singaporean economy and is along with banking and manufacturing the formidable triumvirate. The significant push towards a cashless society and digital integration to facilitate technological innovation comes at a time when trade has been stagnant, manufacturing has been on relative decline and there are conservative estimates in the growth of banking or financial services to be precise. Automation, high tech jobs, open data markets and digital services are the future and Vivian Balakrishnan is trying to get the private sector to play a crucial part in this transformation.
As reported by Bloomberg, Vivian Balakrishnan doesn’t believe in grantocracy as the incentive of subsidies often doesn’t pan out well for either the grantor or the subsidized. According to him, buying the services and creating a demand driven model will contribute to a digitally integrated economy. The economic viability of such startups or initiatives of established tech firms will lead to increased spending on research and development which can transform Singapore into a global center of innovation fueling innovation and re-skilling people for jobs of the twenty-first century.
Balakrishnan sees a cashless society as inevitable. It is only a matter of time before the imperative happens. He also sees conventional jobs being irrelevant and obsolete, as has been witnessed over the years all around the world. Only those who can adapt to the new world and learn new skills will find jobs. Preserving the jobs and hence incomes of the middle class is only possible through technological innovation, retooling and re-skilling.