Infocomm Does Matter for Singapore!

Dr Lee Boon Yang, Minister for Information, Communications & The Arts (MITA) Opening Speech - The Opening Ceremony For IX 2003 Conference And Exhibition Singapore Expo, 1 Expo Drive

Dr Lee Boon Yang, Minister for Information, Communications & The Arts (MITA)
Opening Speech - The Opening Ceremony For IX 2003 Conference And Exhibition
Singapore Expo, 1 Expo Drive
Singapore, 30 September 2003

Distinguished Speakers
SiTF Members
Ladies and Gentlemen

Infocomm Growth amidst Turbulent Times

The Asian economy was one of the fastest growing in the world before the Asian financial crisis in 1997. Unfortunately since then, it was struck by wave after wave of crisis and adversity beginning with the dotcom crash, global terrorist attacks, global downturn and most recently, SARS.

The infocomm sector has not been spared the impact of these shock waves. Fortunately, the infocomm industry has already developed an underlying resilience. This is based on the fact that people and businesses still need to communicate and IT has become an integral part of life.

According to the latest figures from IDA's Annual Survey on Infocomm Industry 2002, the revenue of Singapore's infocomm industry grew by 5% last year, to reach S$32.17 billion. Better news lies ahead. The companies surveyed also predicted that revenue growth would continue to be positive at about 4.5% in 2003 and 7.5% in 2004. Based on the companies' projections for manpower needs over the next 2 years, the forecasted demand for infocomm jobs remains positive with a marginal increase of 0.2% in 2003 and 1.2% in 2004.

Does Infocomm Matter ?

While prospects appear positive for 2003 and 2004, growth rates are not what they used to be during the heady years of Singapore's early computerization efforts. Has infocomm lost its lustre?

IT consultant Nicholas G. Carr caused a stir with his article entitled "IT Doesn't Matter" which was published in the May 2003 issue of the Harvard Business Review. In it, Carr argued that the strategic value of IT has declined as its use and availability became more pervasive. Due to its pervasiveness, IT was becoming less of a differentiating factor for companies. Indeed, the IT industry was becoming an "infrastructure" industry, just like railroads and electric power, important but will not ensure survival or profitability on its own.

The reaction to Carr's article was swift and furious. But having read Carr's article, I felt that some might unfortunately have misread Carr's message. Carr did not dismiss the value of IT, nor declare that it was dead. Carr's message was that IT had become so successfully embraced by all that it ceased to be the source of competitive edge for any one firm. The historic examples and Carr's logic should not be lightly dismissed.

Carr's¹ article attracted many responses which provided insightful perspectives. One such response came from Dr John Seely Brown, who is here to speak at this conference today, and John Hagel III. They expounded that while IT on its own rarely confers strategic benefit, IT is "inherently strategic because of its indirect effects - it creates possibilities and options that did not exist before." More interestingly, Brown and Hagel noted that: "IT may become ubiquitous but the insight required to harness its potential will not be so evenly distributed."

I could not agree with Brown and Hagel more. In Singapore, we remain highly committed to IT, not for its own sake, but for the possibilities it can create. As a small country, some might say an unnatural one, persistent exploitation of all technologies, including IT, will allow us to multiply our effectiveness. So while Carr may be correct in treating IT as an utility pumping bytes of information around, like genco sending kilowatts around the grid, what makes for business success and competitive edge is the quality and nature of the ideas and knowledge in the bytes.

For some years now, our air force pilots have trained on simulators in addition to actual flying practices. Simulator training has honed the flying skills of our pilots in land and air space scarce Singapore. Our national servicemen are encouraged to go online to brush up on their technical knowledge and combat skills before reporting for their annual in-camp training so that the disruption from such training can be minimized. These computer based training not only complement actual combat/field practice, but also help to optimize limited training time and facilities.

Since 1989, when the TradeNet system was implemented, traders have been able to get their permits approved within 10 seconds, down from 2 to 7 days before TradeNet was implemented. Instead of filling in as many as 35 documents previously, companies now only need to submit one online form². This had opened up huge possibilities for exporters, traders and supply chain manager.

The recent SARS outbreak, while an unfortunate occurrence, also demonstrated vividly how infocomm technology could be used to make a critical difference in a crisis situation:

• The thermal scanners for military applications were, within days, modified for use at Changi Airport, for real-time mass scanning for body temperature;
• Hundreds of thousands of Singaporeans sought the latest updates on the SARS situation at home and abroad via the Internet and SMS;
• In May, the increase in new broadband subscribers was 40 per cent above the average monthly increase seen in the first quarter, as students and workers were compelled to work from home;
• Patients in hospitals stayed in touch with their loved ones through video conferencing. Those under Home Quarantine Orders could simply appear before web-cams in their homes, to demonstrate that they were indeed behaving in a socially responsible way by staying home.
  

Powering up the Singapore Infocomm Engine

The applications and benefits of IT, which I have just mentioned, is but the tip of the iceberg. Since its formation in December 1999, the Infocomm Development Authority of Singapore (IDA) has put in place various plans to ensure the continued growth of the infocomm industry. The full liberalization of the telecommunications industry in April 2000 massively increased Singapore's connectivity to the world and reduced telecommunications costs. The $300 million Infocomm 21 plan have increased broadband adoption, trained and re-trained people for new infocomm careers and narrowed the digital divide. Singapore has also made its name as a "digital living lab" where new technologies and business models can be tested before being refined for deployment in other markets. For example, through the Call for Collaboration under IDA's Connected Homes Programme, 32 companies such as Philips Electronics, National Computer Systems, Korean company LG CNS and Australian company Portus are able to test the viability of their integrated solutions in over 400 households. In terms of being a Living Lab for Web Services, IDA and Microsoft launched the .NetMySingapore initiative last year which makes Singapore the first in the world to rollout community-based web services nation-wide.

Local enterprises have done well for themselves too. Eight of them will be launching their "Made-In-Singapore" solutions at the iX exhibition today. These innovative solutions represent a diverse range of applications. There are secure on-line document management solutions that allow organizations to store, retrieve and safeguard their information, anywhere in the world. There is a solution that monitors web pages for changes on a regular basis so that web defacement and brand vandalism can be detected. Other solutions provide web-based, real-time and continuous monitoring of the security and integrity of "smart" cargo containers and their contents.

In March this year, IDA announced that it had identified 5 new areas which could provide new growth opportunities for Singapore, namely:

• Web Services & Portal;
• Value-added Mobile Services;
• Wireless and Wired Networks;
• Multimedia Processing & Management;
• Security & Trust Infrastructure.

I am pleased to note that good progress has been made in all these areas.

In web services, S$20 million have been committed in 13 projects to pilot the use of web services in diverse sectors like high-tech manufacturing, insurance, property management, healthcare, arts and entertainment, banking, professional education and travel. These projects will create 88 new jobs and generate infocomm revenue of S$46 million over the next 2 years.

In value added mobile services, IDA had initiated three Calls for Collaboration (CFCs) for (i) innovative ideas in the use of mobile telephony for payments, (ii) workplace productivity improvement and (iii) development and deployment of Java-based solutions. These projects will generate an estimated business spending of S$38 million over the next 2 years. Another two CFCs were initiated earlier this year, and we should see them bear fruits next year.

In the area of infrastructure for wired and wireless networks, IDA is in partnership with Intel, 5 regional telecommunications companies and their vendors to test roaming between wireless networks and to develop standards that can be eventually adopted worldwide for seamless interconnectivity between wireless and fixed networks.

In multimedia processing and management, the goal is to make Singapore a key node in the trade of digitised information. Digital distribution represents a revolutionary way for audiences to enjoy music, movies and games. Just 3 weeks ago, on September 9, Singaporeans experienced the world's first "live" concert via digital cinema. David Bowie performed "live" in London but audiences from countries across Europe, North America and the Asia Pacific such as Japan, Australia, Hong Kong and Singapore were able to not just listen in but also to take part in an interactive Q&A, all thanks to satellite technology beaming the images and sounds into digital cinemas.

Next month, football and rugby fans across the Asia Pacific will be able to view the UEFA Champions League and upcoming Rugby World Cup on their computers. This will be made possible by Real Network using Singapore as a distribution hub to stream full matches to viewers across the region.

Last but not least, security and trust infrastructure. With memory of the SoBig.F virus and Blaster worm still fresh, one cannot over-emphasise the need for online security. IDA will be setting aside S$21 million to help promote the growth of the infocomm security industry. The 4 focus areas are: Factor Authentication, Perimeter Defense, Identity Management and Monitoring & Response.

Looking ahead, intelligent harnessing of ICT remains a key strategy for the nation at large and for the Government in particular. The Government has set aside a budget of S$1.3 billion to be spent over the next 3 years in the second phase of its e-Government Action Plan.

This plan is a good example of how business innovation, combined with IT, delivers real value. The critical insight that led to the success of Singapore's e-Government effort was the promise to put the citizen (and here we include business users as well) at the centre of our e-Government efforts. This citizen-centric view led to the creation of integrated services so that despite having "many agencies", the citizens transact with "one Government". For example, those intending to set up pubs no longer need to submit applications for 6 permits³ from different Government agencies, they can now just send one application to the Police instead. Furthermore, a response is usually ready within 2 weeks. This is e-Government at work!

We need the same spirit of innovation across the entire economy. With 83% of businesses already using ICT⁴ in some way, the next frontier will be solutions that improve cluster competitiveness. It is not what each company can do with ICT, but how effectively that company exploits ICT to build up its relationships and networking with suppliers and customers for greater efficiency all round. In short, we need to focus on cluster-level competitiveness. By making each cluster more competitive, we are helping Singapore business gain that decisive edge over their competitors. Even as Singapore works to adjust its costs to more competitive levels, we should exploit ICT to give our industries and the companies within them a competitive advantage.

IDA will continue to be a technology evangelist, because we believe in the power of technology and its possibilities. But it will do so with an equal emphasis on business needs. In other words, IDA will identify business problems that are crying out for solutions. We agree with Carr that just investing more in IT and buying more fanciful packages will not automatically translate into better bottom-lines. We need to be smart users to make IT work for us. The combination of supply-push and demand-pull, a virtuous cycle of competitiveness and judicious ICT investments will provide sustainable growth for the IT industry.

Conclusion

As the vigorous debate in the Harvard Business Review has so aptly demonstrated, bringing together great minds will cause sparks to fly. The ensuing debate should, however, bring greater clarity. I am very happy that the SiTF has tapped on the collective networks of its members to bring to Singapore a truly distinguished cast of speakers. I am confident that the exchanges during this Conference will provide many valuable insights for all participants.

In closing, I would like to wish all of you a most fruitful exchange of information and insights.

Thank you.

Notes:
¹ Published in the June 2003 issue of the Harvard Business Review.
² "Crimson Logic's Experience in E-Trade & E-Government" by Lee Yi Shyan, Chairman, Crimson Logic.
³ One-Stop Public Entertainment Licensing Centre (OSPEC)
⁴ Source: IDA's Annual Survey of Infocomm Usage in Businesses 2002 (224.89KB)