Countries need to have the right mindset towards technological advancements and be ready to embrace changes, to help their people realise the full benefits of digitalisation, said Prime Minister Lee Hsien Loong.
Speaking at the Group of 20 (G-20) Summit yesterday, he outlined the ways governments can help workers and businesses affected by the onset of digitalisation and new technologies.
But he said that ultimately, it boils down to the question of mindset.
"Are we optimistic or pessimistic about the future? Are we confident in our ability to deal with major change? Do we believe human ingenuity and creativity will improve our lives, or do we fear that it will cause us more problems?" he said to leaders of the world's major economies at a working lunch on digitalisation, women's empowerment and employment.
Mr Lee noted that the integration of digital technologies with jobs and everyday life has brought great hope and also great fear.
On the one hand, many people are excited about developments such as personalised medicine, artificial intelligence and deep learning.
"These buzzwords have generated entrepreneurial energy and exuberance, and conjured up a brave new world where anything is possible," he said.
But on the other hand, digitalisation has also brought about great fear, with blue-collar workers and professionals worried that they will lose their jobs as a result of technological advancements, he said.
Singapore, like many other countries, has seen workers displaced and industries disrupted by new technologies.
In reality, this fear is not as grave as imagined, he added.
But in order for people and companies to feel hope, deep transformation is needed, he said.
Companies and industries need to change the way they do business and adopt new technologies, while workers have to change their mindsets and learn new skills, he added, saying this is where governments can play an active role.
To help companies enter new markets, as well as develop and adopt new technologies, he said, governments must provide the right environment, institutions and programmes.
They also need to set the right frameworks and rules to promote innovation, and prevent established ways of doing things from holding back progress, he added.
Mr Lee cited the sharing economy - from sharing car rides to rooms, bicycles and umbrellas - that has caused disruption to traditional companies.
Banning these businesses will deprive people of the benefits they offer, he said. At the same time, they cannot be left unregulated since there was " often good reason to regulate their traditional equivalents".
Mr Lee said new ideas and players must be allowed to emerge, while incumbent players still get a fair chance to adapt and compete.
Workers will also need new skills and the confidence to thrive in the new world, he said, and governments can train and equip them.
For instance, Singapore has the SkillsFuture programme, which promotes lifelong learning among workers, and has also rolled out basic coding programmes for schoolchildren.
Besides training workers, governments also need to help those at risk of being displaced adapt to the changing job market, Mr Lee said.
He pointed to schemes like Singapore's Adapt and Grow programme that trains displaced workers, matchmakes them to new jobs, and subsidises their wages as they make the transition.
He cited clean-room workers of electronics plants who received help to move to the medical device industry.
These workers learnt to do micro-stitching to make artificial heart valves, he said.
Summing up, Mr Lee said: "When it comes to digitalisation and jobs, we must not yield to our fears and anxieties. It is wiser for us to be optimistic and work hard to make our hopes come true."