As the leader of a small country, Luxembourg's Prime Minister Xavier Bettel sees technology as a force of tremendous opportunity in areas such as financial technology, logistics, satellites and space science.

But the highly disruptive nature of 21st century technologies also requires governments to demonstrate political leadership by constantly anticipating and adapting to technological shifts, and to put in place laws and policies to keep in check any consequences, Mr Bettel said yesterday.

He made the point during a lecture he delivered at Singapore Management University (SMU) on what political leadership means in the digital age.

Mr Bettel gave the example of Uber. The ride-hailing firm will create jobs, but his government wants to put in place a framework to ensure Uber drivers adhere to social obligations such as paying taxes and social insurance, and contribute to state funds for retirement pensions before starting operations.

"We need to be actively structuring the future without interfering unnecessarily. We want to push innovation where it's needed while managing the temporary trade-offs," he said.

About 300 tertiary students, diplomats and government officers attended the lecture.

"If we do our job correctly, we don't have to be afraid of innovation and its consequences."

Social media platforms like Twitter have shrunk the world by making instantaneous global communication possible, but the downside is oversimplification and the rise in importance of public opinion, he said.

"The public is your jury - that is the situation we live in," he added.

"Nowadays, every person with a mobile phone has the possibility to communicate, to share, to promote someone to win elections but also to destroy someone, and we should realise this," he said.

The speed at which information travels today has also made fact and fiction harder to differentiate, and there is now greater expectation for politicians to give simple solutions to complicated problems, he added.

This has given rise to populists who, "for the difficult questions, will have the easiest answers", he said. "Even if it's not possible, even if it's a lie, it sounds good in your ear, at least for five minutes," he added.

"Very often, these five minutes are the ones where you have to make a choice, to mark a cross."

In short, to vote.

This is why there is a greater need than ever for governments to inculcate the "critical spirit" of discerning for oneself whether information on social media should be trusted, said Mr Bettel.

"It's very important to educate people, especially the young, on technology and on information, to have this critical spirit to tell the difference between what is right and wrong," he added.

He said far-sighted political vision has enabled Luxembourg and Singapore to thrive next to far larger neighbours, while staying nimble and having coherent policies that keep the effects of technology positive and the country competitive.

But while a country must never forget its culture and values, trying to preserve the status quo is not the the way to keep one's identity.

He said: "It's important to keep your roots, your culture and your language, and it's important to know where you come from, but also to know where you want to go.

"We want to stay what we are, but that doesn't mean we want to stay where we are, because this would be the end of a country."