SINGAPORE - Disruptive change is the "defining challenge" facing Singapore's economy, Prime Minister Lee Hsien Loong said in his National Day Rally on Sunday (Aug 21) night.
The Republic is dealing with a host of economic issues, including slower growth, strengthening social safety nets, and helping people upgrade their skills. But chief among these is the relentless pace of technological change sweeping many industries, Mr Lee said.
He cited the taxi industry as an example of a sector which has been turned on its head by disruptive technologies, with ride-sharing apps like Uber and Grab competing with taxis for passengers.
There are similar stories in other industries, such as retail. Brick-and-mortar stores in Orchard Road have been hit hard by the growing popularity of online shopping, he noted.
Singaporeans are buying more things online - even groceries - and are also shopping on overseas sites like Amazon and Taobao.
Still, it is not all doom and gloom and this disruption is creating new jobs, he noted.
The growth of e-commerce means rising demand for logistics services, which Singapore has an edge in thanks to its status as a transport and financial hub. There are also new opportunities in industries like data analytics and digital marketing, Mr Lee added.
To make sure Singapore is prepared to cope with disruptive change, the Committee on the Future Economy (CFE) - a taskforce formed to retool Singapore for the future- has highlighted three key focus areas.
These are: helping companies build new capabilities, promoting entrepreneurship, and developing workers' skills.
The Government will help companies build new capabilities in areas like the digital economy, Mr Lee said.
He pointed to some companies already making progress in this space, such as logistics firm Ascent Solutions. The company developed a tracking device called iSpot, which prevents theft from containers and speeds up the customs clearance process.
Besides digital, Singapore also needs to build deep capabilities in other sectors and help its small- and medium-sized enterprises (SMEs) compete with the best in the world, said Mr Lee.
The Republic also has to continue promoting entrepreneurship.
Besides creating jobs and prosperity, entrepreneurs give society the confidence "that anything is possible... That through our own actions, we can change the world for the better".
Block 71 in Ayer Rajah Crescent - the heart of Singapore's entrepreneurship scene and home to a thriving community of start-ups, venture capitalists and incubators - has been very successful and has expanded to include an offshoot in San Francisco, Mr Lee noted.
"Our start-ups are growing fast, and gaining investor attention," he added.
"Perhaps the next Google, Facebook or Alibaba may come from Singapore."
One company that came out from Block 71 is Zimplistic, which has invented Rotimatic - the world's first automatic Chapati and Roti maker.
It is developed by Ms Pranoti Nagarkar, a mechanical engineer by training, and her husband Rishi Israni, who does software. They got SPRING's help to bring the product to the market.
"Put in flour, oil and water, press a button, and out comes fresh hot chapati and roti, one per minute," he said. "You can try Rotimatic Chapati at the reception and tell Pranoti and Rishi what you think about it!"
Lastly, the CFE is also working to develop workers' skills to prepare them for the new economy.
This starts with equipping students with cross-disciplinary skills, and extends to helping those already in the workforce upgrade and deepen their skills. The Government is also helping retrenched workers to transition into new careers, Mr Lee said.
"This is how we can progress together, and thrive in a competitive and dangerous world."