Governments must play an active role in ensuring the benefits of digitalisation are fairly distributed, Prime Minister Lee Hsien Loong told Asia-Pacific Economic Cooperation (Apec) leaders yesterday.

While free markets and private enterprise are required to drive innovations that have opened up new frontiers for trade and commerce, efficient and fair economies are just as important, said Mr Lee. "It cannot be entirely laissez-faire," he said. "We can leave it to the markets to work this out, but there will then be much disruption and hardship as sectors undergo restructuring, and obstacles to taking advantage of the new opportunities."

He urged countries to mitigate the "winner takes all" effect of technological disruption, as not doing so can result in reactions that prevent governments from promoting economic integration and cooperation. Fiscal transfers and investments in education, training and human resources can help spread the gains more evenly, he suggested.

Making globalisation and digitalisation more inclusive was key on Apec's agenda this year, amid a pushback against globalisation.

Mr Lee also urged fellow Apec leaders to help businesses and workers adjust as technology disrupts industries and business models, and causes some jobs to disappear. "We are seeing middle managers and professionals worrying about automation and how artificial intelligence could be displacing workers. They ask: Is AI helping them do their job better or (is it) doing their jobs and making them redundant?"

To assuage their anxiety, governments can provide incentives for them to upgrade their skills, and also the right environment, frameworks and rules to allow for innovation by businesses, he said, citing Singapore's SkillsFuture for the Digital Workplace initiative for workers.

"These are real political pressures which we have to deal with and, at the same time, move forward and adapt to the digital age," he said.

Tham Yuen-C