PM Lee highlights impact of technological disruption in May Day Rally speech
In his May Day rally speech, Singapore’s Prime Minister, Mr Lee Hsien Loong, highlighted technological disruption in the transport, banking, and retail and logistics industries and talked about what it means for Singaporean businesses and workers. He started by outlining the threats posed by the tensions between the US and China and the imposition of mutual trade tariffs and moved on to what Singapore needs to do domestically to strengthen its economy.
Ridership apps like Grab and Uber have radically transformed the taxi industry in the last few years, with 1 in 2 rides being booked on these applications. This has forced taxi companies to adapt quickly to the changing landscape. Some have partnered with Grab or Uber, while others have introduced their own dynamic pricing. The regulator, the Land Transport Authority (LTA) has also had to keep up, setting rules for the new companies and revising rules for taxi operators, to level the playing field. PM Lee also talked about the Consumer Commission of Singapore (CCCS) stepping in to examine the sale of Uber’s business to Grab, in order to ensure competition in the industry and choices for commuters and avoiding driver lock-in.
The PM further pointed out that the industry is in flux in many countries. Last month, PM Lee visited Didi Chuxing (Didi), the Chinese transportation giant, with 20 million drivers and 450 million users. In addition to rental cars, Didi Chuxing provides other services as well, such as on-demand buses. They know where the commuters are, and hence they can schedule and route the buses for pick-up. In some cities, Didi Chuxing collaborated with the city government to operate the city’s traffic light system, to flow the traffic through the city more smoothly. Didi is working on self-driving vehicles and they believe that self-driving cars will be a reality in 10 or 15 years’ time, maybe even sooner for public transport.
In Singapore, buses are still driven by bus captains, who are assisted by controllers sitting in the depot. The controllerss monitor where the buses are through GPS and guide the drivers. They manage the flow, making sure the buses arrive one by one, and not three and four at once.
PM Lee said, “I do not think bus captains will have to worry self-driving vehicles because I do not expect to see driverless buses on the roads anytime soon.”
Singapore’s MRT trains are mostly automated but still the operators place somebody in the trains to be in charge, so that they can respond straightaway if something goes wrong. It would be the same with buses, even after they become self-driving.
Bus captains will still be required. Driving will be easier and less laborious. They will be able to monitor what is happening and make sure the computer does not make a mistake. This will enable bus captains to provide better service, expand their jobs, look after their passengers and give their passengers a safer and more reliable ride.
Obviously, this means that the bus and train captains will have to adapt. PM Lee said that they can take the cue from Singapore’s taxi drivers, who have adapted well to the market changes after initial complaints.
“Most taxi drivers were already smartphone users; they just needed to learn how to use the new apps. Even the older drivers did not have much problems because the apps are easy to use, and the companies provided training,” said PM Lee.
Unlike transport, the changes in banking have been happening for much longer. Banking has shifted from a brick and mortar business to online and mobile transactions.
PM Lee reminded the audience that there were concerns when ATMs were first introduced in the 1980s. People were worried about getting the right number of notes, about getting robbed, about their PIN being stolen. But ATMs became popular, because it removed the need to travel all the way to the bank or to queue up to withdraw or deposit money.
Internet banking started 20 years ago, enabling people to log on from their computer, transfer money and pay bills from the comfort of their home.
Now, banking is in its third phase of mobile banking, where people can do banking transactions on theirsmartphone, on-the-go, anytime, anywhere. With platforms like Singapore’s PayNow, which was launched last year, people can pay someone directly, if they know the person’s identification card number or smartphone number. In China, everyone is using WeChat Pay or AliPay for everyday transactions.
PM Lee said that Fintech will bring a fourth phase of disruption in the finance industry. Fintech companies are starting to disrupt traditional financial institutions. For example, there are fintech firms that compare different insurance plans. There are robo-advisors that use artificial intelligence (AI) to offer financial advice, tailored to needs and circumstances, including age, family, expectations and earnings. AI is also helping banks detect money laundering and terrorism financing.
“MAS has done a lot to make Singapore a popular place for fintech companies and it is creating many new jobs and opportunities, especially for young people. Just in these last two years, we have had 2,000 Singaporeans take up jobs in fintech companies. MAS is also working with our banks to plan ahead, build their digital capabilities, reskill and redeploy their employees,” the PM said.
As banks rationalize their branch networks, they will have to reskill and redeploy the frontline staff – the bank tellers, the counter staff, the call centre agents. They are working at it together with MAS, Workforce Singapore and the unions to develop Professional Conversion Programmes (PCPs), starting with consumer banking. For example, UOB has developed a Professional Conversion Programme to retrain frontline officers to understand data analytics, and provide financial advice using digital platforms.
Retail and logistics
E-commerce is replacing traditional brick and mortar stores, saving customers a lot of time and some money.
Technology has transformed the delivery process too. Sensors are tracking the location of items, warehouses are managed through robotics and cloud computing helps run the whole operation.
The PM mentioned visiting NTUC FairPrice’s High Tech Distribution Centre in Joo Koon equipped with robotics, radio-frequency identification (RFID), and an automated storage retrieval system. FairPrice recently rolled out a new Transport Management System, in collaboration with the Agency for Science, Technology and Research (A*STAR) , which enables FairPrice to fulfil a lot more orders, and faster.
Singapore's largest home-grown supply chain solutions company, the YCH group is testing the use of autonomous vehicles and drones, augmented reality and virtual reality systems.
These new technologies will help overcome Singapore’s land and manpower constraints, and help businesses stay competitive.
E-commerce needs logistics and retail businesses to work very closely together. PM Lee pointed out that this is not just about transforming individual industries one by one, it is about cross-industry collaboration. It means that retail employees must learn to work with new technologies, pick up new skills in logistics, like supply chain and inventory management. At the same time, the logistics workers have to understand the retail business, and learn new skills in the area. The Industry Transformation Map for Retail, which includes a skills map describes this in detail.
What do the three examples show?
Firstly, that technology is improving lives, helping people live and work better.
PM Lee said, “It is giving us all, more options and opening up more possibilities and the changes are positive changes. We have to embrace them. We cannot stop them. We cannot hold it back.”
Secondly, it shows that companies have to upgrade to meet changing customer demands, and to compete with one another, not just in Singapore but also abroad. The Government must support companies to upgrade, so that Singapore can renew its economy and stay competitive.
Thirdly, workers have to adapt, to embrace the change, to pick up new skills and take on better jobs. PM Lee urged workers to take advantage of the many schemes to help workers. There are many one to two day courses available, supported by SkillsFuture credits, subsidised by the Government, and recognised by employers.
“Take them up, take advantage, learn something new, make yourself more employable. I know that it is not easy to change. I know it is coming fast and furious, and many workers worry about the pace of change. But the Government and the Labour Movement, we will walk with you and support you all the way.”
“For younger Singaporeans not in the workforce, you will have sound education and market-relevant skills that will be sought after in the job market. For those already in the workforce, especially the older ones, we look out for you, and support you with all these schemes and programmes, make you more employable,” the PM said.
Read the complete transcript of the speech here.