David T E Lim, Acting Minister for Information, Communications & The Arts - Keynote Address World Congress on IT 2002, Adelaide Convention Centre Australia, 1 March 2002

David T E Lim, Acting Minister for Information, Communications & The Arts - Keynote Address
World Congress on IT 2002, Adelaide Convention Centre
Australia, 1 March 2002

Ladies and Gentlemen,

Innovation is present not just in research laboratories or factories of the future. It is present in all aspects of our lives.

Innovation, coupled with enterprise, drives the new global economy. It arises from the need to solve a problem, desire to change things for the better, to explore new possibilities, to create a different future. It comes from human ingenuity.

In the global economy that is now emerging, investment capital will flow to where the greatest opportunities for reward can be found. These opportunities will be found in those places - cities, countries and regions - where new value creating ideas can be realized.

The ICT industry is foundational to the creation of value in this new world economy. This is why governments promote the ICT industries, because they want to use this to gain competitive advantage for their countries. Workers welcome this, because it means better jobs and higher living standards. Businesses invest in the ICT industries, because they believe that this industry offers growth and profits. And consumers are happy that new technologies and services provide them greater access, convenience and choice.

These interests are coincident and aligned. Governments, businesses, workers, consumers, all have a stake to see more widespread use of ICT, and to see the ICT industry grow.

Translating this strategic intent into effective policies, practices and investments is however a much more difficult task. As Michael Porter, a thought leader in the field of competitiveness said, "competitiveness requires that we do everything right at the same time". Growing the ICT industry also requires that we do many things simultaneously well.

This morning, I would speak about two aspects of this challenge:

a. Firstly, I would share briefly some stories about how Singapore built a robust ICT industry and a competitive environment.

b. Secondly, I would like to outline some of the ICT opportunities in Asia and how we can make full use of them.

Singapore's ICT industry contributes about 6% to our GDP. 7 out of every ten persons in Singapore uses a mobile phone. 2 homes out of every three own computers, and 3 out of every 4 of those homes have Internet access. Broadband infrastructure reaches more than ..99% of homes, and one out of every 4 Internet users surf on broadband. The ICT sector by itself employs about 51,000 employees, but there are more than 105,000 .... computer professionals across the entire economy.

Yet 20 years ago, Singapore had only one mainframe computer for the entire government, and just 850 computer professionals in the whole country.

In 1980, the Singapore government decided that Information Technology would be a key competitive tool for economic development. In 1981, we set up the National Computing Board. It had three goals - first goal was to computerize the civil service, the second was to train and develop computer professionals, and the third was to develop an ICT industry. By 1990, it had achieved all three goals.

23 computer centers had been set up in the civil service, operating more than 250 application systems. By then, the total pool of IT professionals had exceeded 10,000, and the IT industry in Singapore was bringing in more than $US1 billion in revenues.

Education was the key strategy. In computerizing the civil service, we had to educate a whole generation of civil servants who had grown up with pen and paper, not just on computing technology, but also on concepts like data management, and on-line transactions. We also set up new training institutions, so that a decade later, we were able to graduate in one year the total number of IT professionals that we had when we started. Today, we produce 5500 infocom professionals a year.

After 10 years, we had built enough of a foundation to take the second major step forward, and a blueprint to make Singapore into an "Intelligent Island" was drawn up in 1991. Our broad goal was to make IT pervasive in all aspects of economy and society within 15 years. We envisaged computers in every home, and multifunctional computing devices that could do a whole array of things. It was part plan, and part dream.

Along the way, the Internet Revolution took place. By the mid-1990s, it was clear that the Internet would fundamentally change the way we worked with each other, as email, e-transactions and e-services opened up a whole new way of communicating and doing business.

Laws were quickly drafted to support this change in business practices. In 1993, we had introduced the Computer Misuse Act, as we realized the potential harm that mischief-makers could do to disrupt the economy and society as we became more and more dependent on information technology. In 1998, we passed the Electronic Transaction Act. Amongst other things, this Act gave legal recognition to transactions on the Internet, and facilitated electronic-commerce. And we also made amendments to other relevant acts, such as the Copyright Act in 1999, to encourage more software and content to be developed in Singapore.

By 1999, we recognized that computing and telecommunications were worlds had collided and meshed. We therefore decided to re-organise, and bring together the government authorities in charge of IT and Telecommunications into a new body, which we named the Infocom Development Authority. That same year, we opened and liberalized our telecommunications sector, two years ahead of plan. It was a costly move, as the Singapore government had to compensate the incumbent telecom company, as well as a new licensee, which had committed to a second fixed line network but had not yet rolled out access. Total compensation was about US $1 billion (net of tax).

However, that strategy has proven to be the correct one. Over the past two years, telecommunications bandwidth had exploded by 400 times, rising to 20 terabits of high speed submarine cable bandwidth to more than 30 countries today. Liberalisation has also brought telecommunication costs down sharply for consumers and business. For example, a call to the US cost 95 cents per minute before liberalization fell to as low as 9cents per minute after competition was introduced.

Over the past 20 years, the progress we have made in growing the ICT industry in Singapore can be attributed to a number of key factors.

Firstly, a clear and strong commitment by government to develop the industry, to lead by example, and to provide incentives for the private sector to do likewise. The computerization of our civil service is an example of the former, and the provision of various tax incentives and grants for companies to invest in and use ICT is an example of the latter.

Secondly, we invested in people, infrastructure and institutions to produce the professionals that industry needs, do research, develop standards, and promote the use of new technologies. Over the years, we have set-up, merged, and shut down numerous institutes dedicated to these objectives. They were set up quickly to meet a particular need, and as our needs changed, we also changed the institutional support structures.

Thirdly, we adopted an open partnership approach. The growth of the ICT industry in Singapore owes much to the contribution of global companies and talents who play a catalytic role in introducing technologies, bringing their experience and expertise, and creating pathways to new overseas markets for the ICT industry in Singapore. Likewise, it was the partnership between government, labour and business that enabled companies to re-tool and re-engineer their processes to make full use of ICT to raise productivity.

Fourthly, we make constant efforts to stay current, and to adjust our strategies to keep pace with change. Today, we are continuing to develop new programs to encourage innovation, and the emergence of clusters of innovation capability in our ICT industry. For example, our PATH program - Pilot and Trial Hotspots - funds industry ideas for innovative applications of ICT technologies and services. Another program, FastTrack@School, is a joint project by 31 companies to create a broadband learning environment for 40 pilots schools.

We recognize that investment dollars alone are not enough for success. Rather, we are bringing together people and organizations with complementary capability to collaborate and work jointly on new ideas. For example, venture capitalists bring not just funds, but deep understanding of market entry strategies. Patent lawyers advise not just on legal formalities, but help structure IPO strategies to protect the value of winning ideas. Marketing experts advise not just on market opportunities, but share their deep knowledge of the regions' cultural characteristics and business customs, and help draw up business plans.

Essentially, we are now focused on creating clusters of capability in the ICT industry. We have built up the components areas of the industry -content creation, computing capacity, and communications linkages. Elsewhere in the government, have also introduced other measures to bring about a more creative environment and a more conducive context that encourages original and innovative ideas. Now we want to move further to connect up these components, and to exploit fully the opportunities that are thrown up by the overlap of convergence of these capabilities.

Furthermore, we are no longer focused only on the ICT industry in Singapore. We are also reaching out to explore how we can work in partnership with global companies in region markets. One policy innovation that supports this is our recently completed FTA with Japan. This agreement broke new ground to create a comprehensive cooperation program in areas such as PKI harmonization, broadband content creation and exchange, telecom regulation, cross-recognition of data protection marks and IT skills qualifications. Non-Singaporean companies, large or small, can also take advantage of this agreement, so long as they are engaged in substantial business in Singapore.

In short, we have moved our focus beyond just being an Intelligent Island, to being a Connected Island - connected by wired and wireless networks at home, connected to the global economy, and connected in cyberspace.

This is an appropriate point for me to move on to the second part of my speech, and that is ICT Opportunities in Asia.

Asia is a diverse market. Over the last 20 to 30 years, different parts of Asia have emerged as leaders in ICT, each by their own strategies and with their own success in the adoption of infocomm technologies.

For example, Japan is a leader in the development of embedded software that drives everything from washing machines to CNCs. Japan is also a leader in wireless innovations. NTT Docomo, with close to 30 million subscribers, is the world's most successful mobile Internet service today. Korea is a leader in broadband usage, partly because of the Korean language, but more so because of broad consumer support. Australia is an innovator in IT Services and Outsourcing. India is the largest source of software programmers. Companies like Infosys and Wipro have grown explosively over the last twenty years, rising from obscurity to global recognition worldwide as leading contract software powerhouses. But the most exciting market is China. China's mobile telephony growth rates are astonishing - last year, there were more than 100 million subscribers, up from only 1.6 million in 1994. By 2005, this number is expected to exceed 300 million, and will be the world's single largest mobile phone market.

Diversity is also Asia's opportunity. Each country, state or city offers a different strength, and a different market proposition.

At the macro level, Asia's market opportunity is obvious. More than half of the world's population - 3.7 out of 6.1 billion - lives in Asia. It has a younger workforce compared to the US and Europe. Most significantly, Asia's middle class is expanding rapidly, and will consume much more ICT goods and services in the years ahead.

According to Dataquest, the number of Internet users in Asia is expected to surpass those in the US by 2003. Others have forecasted that almost one US$1 trillion e-commerce revenues will be generated in Asia by 2004, a quarter of the estimated global e-commerce market.

Unlike Europe, Asia was slow to conduct 3G auctions. But this means that it has been spared the costly drag that the high priced auctions will have in Europe. Telecommunications will continue to experience high rates of growth, as Asia carries on with investments to meet market demand.

Asia's growth in ICT will naturally be concentrated in its cities. There are obvious reasons why this will be so. Firstly, Asia's cities are dense concentrations of middle and high-income earners. They have the buying power. And as a sophisticated and discriminating customer base, they will seek out the best values in ICT products and services. Secondly, the high population density in cities provides economies of scale in start up infrastructure and distribution costs. Thirdly, the concentration of talents in cities provides a knowledge base for companies to invent new products services in collaboration with other ICT and related companies.

But the diversity of Asia also poses some challenges to growth. We will need to align policies and standards to open up e-markets. Laws and protocols to support secure transactions are needed, as are rules and regulations to protect intellectual property rights while promoting market growth. Post 911, ICT security to thwart and prevent cyber threats has also become a bigger concern, and policies for cross border data flows will need closer co-ordination. We also need physical standards for connectivity, and to create larger markets products, services and content. Not least, we need to tailor products to Asian culture, providing man-machine interfaces that reflect Asian ways of doing things - from the way we conduct business meetings, to the things we do in our free time.

A tripartite approach, comprising government, industry and thought leaders, is needed to deal with this myriad of inter-related issues. This is the idea behind Singapore's proposal to form an Asian Belt of IT Cities, to bring about a more Connected Asia. By bringing together important leaders from the leading ICT cities in Asia at relevant forums, we can discuss policies, formulate plans, and create open and welcoming environments for businesses to thrive and grow.

Along these lines, I am happy to say that SITF, which is the ICT industry's main business association in Singapore, will organize an International Conference in conjunction with CommunicAsia 2002 in June this year. CommunicAsia itself has become one of Asia's largest trade show for telecommunications and IT products and services, and the addition of this conference will add to the much-needed dialogue to grow Asia's ICT industry.

Ladies and gentlemen: ICT is both a large and significant contributor to the GDP of Asian countries, as well as a critical component in the productivity and competitiveness of all other industries. This industry will grow. Partnership and collaboration is essential for us to tap this growth, because of the inter-related and multi-faceted challenges we face.

I hope that in the months and years ahead, those of you present at today's conference will join in the efforts to create a more connected Asia, and in so doing, unleash the power of ICT.