Singapore will need a greater appetite for risk and more tolerance for failure if it is to become an innovation-led economy, said Mr S. Iswaran last night.

The Minister for Trade and Industry (Industry) told students at the Singapore Management University that it is essential that Singaporeans develop a mindset that fears losing out on opportunities while also viewing failures as stepping stones towards the next breakthrough.

"As we move towards a more innovation-led economy, there is a greater need... to take calculated risks and accept setbacks as a learning experience." While global growth has been sluggish, he noted that there are two new areas of opportunities for Singapore - exploring new geographical markets and the digital economy.

Mr Iswaran singled out India as a market with strong growth potential while also highlighting a recent Ministry of Trade and Industry (MTI) study which showed that Indonesia, Malaysia, the Philippines, Thailand and Vietnam have overtaken the United States as the largest final-demand market for Singapore. To that end, he encouraged new graduates to seek overseas posting, especially in emerging markets.

"Apart from helping to understand the business culture, consumer preferences and operating environment in these markets, it will have an indelible impact on your personal development," added Mr Iswaran, who was speaking at the eighth MTI Economic Dialogue.

"Such attributes and experiences are also recognised and valued by companies seeking novel growth opportunities."

He also highlighted strategies for Singapore companies to tap opportunities in the digital economy - such as using e-commerce platforms to reach customers in new markets, as well as data analytics.

Mr Iswaran later handed out awards to two recipients of the Economist Service Scholarships - Ms Sarah Liu and Mr Joshua Wong, who will be studying overseas. The scholarship scheme was launched in 2011 to encourage young talent to become public sector economists.