BEIJING - New technologies will have an impact on a wide range of sectors and jobs, but there are ways to respond to make the most of the coming disruption while minimising harm, Finance Minister Heng Swee Keat said on Saturday (Nov 25).
Responding to questions from students of Tsinghua University, Mr Heng said a more globally integrated and digital economy means competition can come from totally unanticipated sources, pointing to home-sharing firm Airbnb, for example, which now has the largest network of "hotels" in the world.
Other sectors that are seeing significant change include manufacturing and finance, where fintech (financial services using innovative technology) firms threaten to disrupt banks.
"I believe that the digital economy will cause a lot of changes in many sectors, not just in financial but in practically every sector that you think about," he said.
Cryptocurrencies, for instance, have the potential to cut out the middleman in sectors where they have long played the role of a trusted go-between. But it is their underlying technology, called blockchain, that has the potential to cause significant change to many industries, said Mr Heng.
"You now have a machine, an algorithm, that can be that trusted partner, and can match demand and supply much more efficiently," he said.
"It is something that is worth monitoring very closely, because it will have some impact on many transactions, particularly in the services industry, an industry which depends on a high level of trust."
But the disruption on the horizon is also about creating value and eliminating inefficiencies in the market, rather than disruption for its own sake, said Mr Heng.
"In the old days many (fintech) companies said 'I'm going to disrupt the big companies'," he said.
"I noticed that many of them are now realising that there is also a lot of scope to work with major financial institutions, to match the strengths of existing financial institutions with the agility and innovativeness of a fintech to see what new value they can create."
On Saturday, Mr Heng also visited Didi Chuxing, where he was shown how the ride-hailing platform was able to lessen traffic jams in gridlocked cities by sharing its data and analytics with local governments. The platform has also helped bus operators kept afloat by state subsidies become profitable again through on-demand services.
Answering a question about universal basic incomes, Mr Heng said it is important to have a better understanding of the future and to navigate carefully, adding that it is "very hazardous" to try and predict it.
The practical approach is for each person to stay relevant in the face of change, he said.
This involves governments looking at re-designing jobs both for an aging population and for a world where technology can do much more, and to ensure that people have skills for the future.
On cashless payments, Mr Heng said Singapore started on the back foot but is now making an effort to catch up.
"We will continue to make some progress, but at the same time we must never underestimate the pace of change, and we just have to move a little faster than before," he said.