- Singapore has adopted a tech culture with ease. However, the island nation state lags behind in one key area that could end up shortening its tech strides, if left unchecked: business agility — the ability for companies to react quickly to changes in the environment.
- The corporate history of Singapore is one of companies either created by the public sector or arriving from abroad. In both instances, the need to compete, adapt, and digitally transform has not been so relevant.
- One overwhelming difference between the two countries is the scientific dominance of Switzerland. In the COVID-19 world, science has proven itself an investment as necessary for a country as technology and basic infrastructure. Switzerland discovered that a few decades ago; Singapore has just started.
Singapore is growing as a tech hub at a rate of knots. This article explores ways it can improve its business agility – arguably its missing ingredient – by looking 10,000 km westwards to Switzerland, for some learnings.
On the face of it, Singapore seems to have it all in terms of tech: money, talent, some of the best IT infrastructure in the world and the legislation to back it up.
Compared to Switzerland, it has adopted a tech culture with ease. It rolled out its second 5G network in September, while various Swiss cantons were busy halting such initiatives over health concerns.
Digital payments are not yet fully developed in the central European federated country, either. In Singapore, digital payments are increasingly offered by non-bank, technology companies, which have found Southeast Asia’s unique combination of high mobile penetration rates and significant unbanked or underbanked populations conducive for customer acquisition.
Indeed in the IMD Digital Competitiveness Ranking 2020, Singapore was an impressive second, behind the US. Switzerland sat somewhat in the wings at third.
However, the island nation state lags behind in one key area that could end up shortening its tech strides, if left unchecked: business agility — the ability for companies to react quickly to changes in the environment. In the same IMD ranking, produced by the IMD World Competitiveness Center, it rated relatively poorly in this criteria, down at 19 of 63 economies assessed.
In Switzerland, by contrast, companies (and especially small and medium ones) have been very agile at incorporating new technologies, from artificial intelligence and blockchain to automation and big data.
It’s not only about being digital but digitally agile
There are various possible reasons for Singapore’s weaker business agility. Set alongside Switzerland, with Nestlé, Roche and Novartis et al part of the country’s furniture, having no historical tradition in housing global corporations stands out as one. As if overnight, 80 of the top 100 tech firms in the world now have a presence in Singapore.
While there are some exceptions — homegrown leading financial services group DBS headquartered in Singapore, for example — the corporate history of Singapore is one of companies either created by the public sector or arriving from abroad. In both instances, the need to compete, adapt, and digitally transform has not been so relevant. But now the world is changing and lasting technology dominance will require countries to excel in a combination of institutional (regulation, infrastructure) and corporate and cultural factors.
Economic competitiveness can be viewed as a cycling race. In order to win, a competitor needs to have a good bicycle and be a good cyclist. The bicycle is the government; the cyclist is the private sector. In Switzerland, the key to success has been that its cyclists (its companies and entrepreneurs) are innovative and agile, and they have adapted to a non-stellar bike.
Switzerland is landlocked, with no natural resources. It used to be a poor country, and yet Nestlé has become the largest consumer goods company in the world, thanks to a simple innovation: soluble coffee. But there are no coffee beans in Switzerland!
What Asia does well
Singapore is a success story because it was created anew by the vision of its leader — it is a perfectly oiled bicycle. But because of that, its private sector has become somewhat complacent and overly reliant on the public sector to invest, educate, and drive the big economic and technological changes.
Indeed, countries like Singapore and South Korea excel because the public sector has invested in technology and talent, and has passed good regulation, so digital transformation has been made easier. Not surprisingly, in these countries the use of technology (digital payments and commerce, for instance) are much more extended than in continental Europe.
The other side of the coin, however, is that this has created a certain complacency in the business world, meaning that companies find it difficult to foster the type of business agility that Switzerland does so well.
One comprehensive analysis of digital agility in firms in the wake of COVID-19 carried out by Workday found that, owing to a lack of digital agility, nearly three quarters of leading Asia-Pacific organisations (71%) struggled to make changes to their financial plans for the year, with 63% unable to realign their organisational structures.
Some 56% of organisations were unable to track their people’s skill sets to form special task forces in response to the pandemic and 44% were found to be unable to manage new approval and business processes.
Unlike other countries in which salaries in the public sector are lower, in Singapore the public sector is able to attract talent from the private sector and pay corporate-level salaries.
Singapore should better consider the science
In the COVID-19 world, science has proven itself an investment as necessary for a country as technology and basic infrastructure. Switzerland discovered that a few decades ago; Singapore has just started.
One overwhelming difference between the two countries is hence the scientific dominance of Switzerland, in line with its European counterparts. Looking forward, countries will need to think of science, and scientific infrastructure, as a pillar of their prosperity and sustainability.
Regional comparisons are always interesting. South Korea and Singapore are similar in that their competitiveness models are public-sector driven. Japan is closer to Switzerland, where the private sector has developed on its own.
A new work permit to help Singapore attract foreign tech talent, the details of which were announced a few days ago by Singapore’s prime minister, is in line with everything Switzerland continues to do to rank number one globally in the talent arena: attract and retain foreign talent, minimise – if not eliminate – brain drain and encourage companies to promote and develop talent within the organisation.
Singapore already has the good education system required to further foster talent, and this was a major driving force behind it topping the IMD World Competitiveness Raking in 2020.
There’s no point comparing apples with oranges, but small competitive economies can definitely learn from each other, and so Singapore – take heed. Both individuals and companies must adapt to technology fast enough to incorporate the changes brought by digital innovations.