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PM Lee highlights impact of technological disruption in May Day Rally speech

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.

Transport

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.

Banking

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.

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