Emerging Stronger Taskforce: 6 key shifts and what they mean for Singapore

Singapore must act quickly to find new ways of staying relevant, says the Emerging Stronger Taskforce. ST PHOTO: GIN TAY

SINGAPORE - As Singapore refreshes its economic strategies for a post-pandemic world, the Emerging Stronger Taskforce has identified six key shifts that present opportunities for growth. It noted that some of these structural changes were already happening before Covid-19 struck, but the scale and nature of the crisis have accelerated the pace of these shifts.

1. Changing global order

Even before Covid-19, a tide of nationalism had turned some countries inward, and seen greater bifurcation and fragmentation of the global order. There have also been intensifying geopolitical and economic tensions on multiple fronts such as technology, finance and trade.

The task force said Singapore must act quickly to find new ways of staying relevant. As greater volatility sees a premium being placed on neutral and trusted locations with strong political, financial and legal institutions, Singapore must harness this premium in partnership with its neighbours in Asia and South-east Asia, the fastest-growing production base and consumer market in the world.

2. Accelerating industry consolidation and churn

Businesses are likely to consolidate in response to the economic and financial crisis, reinforcing the market dominance of large private companies with available capital to acquire distressed assets. This could limit the potential for Singapore companies, which may already be more cautious about investments.

Singapore will have to double down on industry transformation efforts, particularly in growth areas, to help companies develop new capabilities, become more productive, and find new ways of working together. The collective effort of industry and government will also be needed to tackle complex challenges like climate change.

3. Rebalance between 'efficiency' and 'resilience' in supply chains and production

In complex supply chains, the balance is typically tilted towards efficiency for better cost savings. But this has left companies with little buffer and flexibility during the pandemic, and they had to scramble for alternative supplies. Many have moved to diversify their operations. Governments have also re-evaluated local resilience, especially in areas such as healthcare, food and deep technology.

Against this backdrop, Singapore's hub status can help the country meet the international demand for resilience and robust supply chain management. But it must maintain its connectivity to the world, enhance its industrial production capabilities, and strengthen the business ecosystem.

4. Accelerating digital transformation and innovation

Businesses around the world were forced to turn to technology in the past year, accelerating the trend towards a more digitally connected global economy. Singapore companies can capitalise on this by digitalising their business models, accessing new markets overseas, upskilling the local workforce and tapping the global talent pool to work remotely.

Research and development has also intensified, and product development cycles have become shorter, particularly in sectors like biomedical sciences and healthcare. A culture of pervasive innovation will help prepare companies to respond nimbly to these demands.

5. Changes in consumer preferences

With people forced to stay at home for long periods last year, many turned to shopping online and virtual services, entertainment and communities. As economies reopen, behaviours have not returned to pre-pandemic norms.

Consumers are also likely to be more conscious about standards of safety, health and hygiene, as well as environmental sustainability. In the near term, dampened demand for travel will spur alternatives, such as hybrid business conferencing formats or staycations for leisure, and businesses have to anticipate new needs and adapt.

6. Increased focus on sustainability

Calls for more sustainable environmental, economic and social practices have grown in recent years, with people more conscious of climate change and inequality.

The pandemic has further put the spotlight on sustainability, as countries and businesses look to gird themselves against similar economic shocks in the future.

These developments have created new opportunities in the green economy, and businesses will have to develop new strengths. There is also growing realisation that economic growth must be sustainable and inclusive and uplift all Singaporeans.

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