Globalisation and technological change create much value, yet can cause profound dislocation to workers and businesses.
To deal with these challenges and thrive in a digital age, Singapore must stay open to seize opportunities, and be inclusive so that these opportunities are equitably distributed, said Minister for Communications and Information S. Iswaran yesterday.
"Unless there is a fair distribution of the larger benefits, the natural instinct is to push back against greater competition and disruptive change," he said.
"Sustaining such a mindset is challenging in normal times, but especially so in times of economic uncertainty when you have to stand on principle, conviction, and go against the grain and popular sentiments. That requires political will and strong leadership."
Addressing 300 business and government leaders at the Asia House Global Trade Dialogue held at the Mandarin Oriental hotel, Mr Iswaran said the volume of cross-border data flows in 2017 was nearly 150 times that of 2005. In South-east Asia alone, the digital economy is expected to treble in size to US$300 billion (S$407 billion) by 2025.
The digital transition will disrupt jobs, business models and economies, said Mr Iswaran, who is also Minister-in-charge of Trade Relations.
Global consulting firm McKinsey estimates that by 2030, 14 per cent of the global workforce, or about 375 million workers, may have to find new occupations.
Trade agreements that were conceived in a pre-digital era are not designed for these new economic realities and trade patterns, Mr Iswaran said. "It is therefore in our collective interest to update global trade agreements or strike new arrangements, to facilitate the flow of data and digital transactions."
Hence, Singapore has embarked on negotiations for digital economy agreements with like-minded countries such as Australia, New Zealand and Chile. These pacts will establish clear and harmonised international rules, and allow free data flow between countries with appropriate safeguards.
But it is critical that globalisation translates into benefits at the micro level, Mr Iswaran said, especially for small and medium-sized enterprises (SMEs) and less skilled workers who may disproportionately bear the burden of adjustment.
The Republic achieves this through the SMEs Go Digital programme, which helps small businesses adopt new technologies by defraying part of their cost. They are granted favourable intellectual property licensing terms and work with scientists seconded from research institutes of the Agency for Science, Technology and Research.
To help SMEs understand the relevance of complex trade agreements and to venture abroad, the Government conducts education and outreach activities, training courses and business missions. Since 2016, about 1,800 firms have benefited from these efforts, added Mr Iswaran.
Enterprise Singapore has also come up with an online tariff finder for companies to determine preferential margins for their products in each market, along with rules of origin criteria and documentation. Rules of origin are used to determine the national source of a product, as certain duties and restrictions depend on the source of imports.
For workers, they can practise lifelong learning and upgrading through the SkillsFuture programme, and by tapping skills and training road maps for 23 industries, Mr Iswaran said.
He stressed that inclusivity cannot just be a broad statement of objective or strategy. To be truly effective, it must be taken down to the level of individual industries, companies and individuals to address specific needs and challenges.
The Government must collaborate with unions and industry to build workers' skills and companies' capabilities, he said.
"Staying open and being inclusive has underpinned the Singapore story and our journey thus far. I believe these values will endure as our cardinal points as we work with our partners from around the world, to navigate the path towards a digital future rich with opportunities and possibilities for our people."