Think of Singapore and you might think of a bustling financial center.
Major manufacturing hub.
Thriving technology haven.
But when the coronavirus hit in early 2020, that image came to a standstill.
Singapore, like much of the world, was sucked into the throes of the pandemic,
forcing businesses to shutter and life to go on hold.
Staying closed was not an option for long, though.
As the Asia Pacific headquarters for many major corporations,
ensuring business continuity is critical.
I’m taking a look at how key industries are supporting that drive to revive the economy.
Even before the pandemic hit Singapore shores, the Southeast Asian island nation was positioning
itself as a strategic business hub, in a world increasingly fraught
with trade tensions and supply chain concerns.
But when a spike in Covid-19 cases led the country into an eight-week lockdown,
authorities moved quickly to cushion the impact, unveiling more than $73 billion in stimulus
as the country weathered its first recession since 2009.
Although the crisis hit the country hard, it has presented opportunities for manufacturing
and services firms, which are key components of Singapore’s economy.
In 2019, the manufacturing sector alone contributed 20.9% of Singapore’s nominal GDP.
The services industry, which includes sectors such as business, information and communications,
finance and insurance, made up close to 70%.
At the height of the pandemic, manufacturing was the only sector to grow,
led by demand for biomedical goods.
Multinational manufacturer 3M was among the companies to lead response efforts,
turning its manufacturing lines 24/7 and doubling its global production of N95 respirators.
We were able to leverage learnings from SARS.
And so, we made the conscious decision to invest in additional capacity
in preparation for the next pandemic.
In having that, it helped us a tremendous amount, to be able to respond very quickly.
In the first half of the year, the company produced over 800 million respirators globally,
including from its plant in Singapore, which was in the crosshairs
of a White House administration trying to prioritize supplies for the U.S. market.
During that period, Malaysia closed its borders due to the pandemic,
affecting 3M’s Malaysian workers who commuted daily to Singapore.
The company had to work closely with Singaporean authorities to temporarily rehouse
its Malaysian staff in Singapore, as the border closure threatened to affect output.
With the movement control order circuit breaker, we had some of them make the conscious decision
– which again, I think shows how our employees have stepped up – to say,
'I’m going to stay away from my home and my family and live in a hotel.'
And they’ve been living in a hotel since late-March and they’re still here,
helping to keep our operations running.
As the economy reels from the pandemic, central banks have been working with private lenders
such as banks to roll out support.
That includes measures to ease cash flow constraints for the thousands of
small and medium-sized businesses, or SMEs, in the country.
As with any economy, you’ll find the SMEs are always the foundation,
the bedrock, of every economy.
They, first and foremost, are responsible for a lot of the economic activities
of a country, and therefore they also employ many people.
SMEs account for 99% of businesses in Singapore and 72% of the workforce.
During the peak of the outbreak, DBS — Southeast Asia’s largest bank — provided $3.5 billion
in temporary bridging loans to keep many of them going,
with an emphasis on vulnerable, micro-enterprises.
So all in all, about 8,600 loans have been approved, about $4.9 billion,
of which about 7,500 loans — about S$2 billion — are for the micro and smaller SMEs.
The shifting economic landscape has also led many businesses to quickly adapt to new ways
of working, including moving much of their operations online.
That’s something Microsoft has been helping with from its Asia Pacific headquarters in Singapore,
through its products such as Azure cloud computing and Microsoft Teams.
We’ve seen two years of digital transformation in two months as a result of Covid.
While these developments happened out of necessity, Singapore has been investing heavily
in digitization efforts in the public and private sectors for years.
Accelerating the digitalization of these SMEs could lead to a faster economic recovery.
A recent survey of more than 1,400 SMEs in Asia Pacific found that many companies
are still in the early stages of their digital transformation or indifferent to it.
It is estimated that by 2024, the digital transformation
of small and medium-sized businesses in Asia Pacific could add $2.6 trillion
to $3.1 trillion to the region’s GDP — and that was before the pandemic.
I think across every industry we have seen a shift of focus.
In some cases, it might be more in keeping their data secure and getting it to the cloud.
In others, it may be more around collaborating and how do they keep
their employees and their customers connected?
And then in others, it’s fundamental changes in their business models
so that they can actually prepare for the future.
And I don’t think they will go back.
It’s not just companies rebuilding for a new digital economy, either.
Those fundamental changes have also altered people’s behaviors, prompting many of them
to look for new ways of conducting personal and professional business.
That means businesses have to empower employees to find new ways of working.
Teams usage went up by 500%, so just to show you the amount of
dependency for people to be able to continue to work together, it’s huge.
And we’ve really had to work hard to get these things deployed quickly.
In some cases, over the course of 48 hours.
For DBS, that was a case of expanding its digital banking system to enable more people
to manage their finances remotely.
I have seen a 30% year-on-year increase in digibank adoption.
And as we look into the profiles of those, a reasonable percentage of those
were actually our senior citizens, 62 years and above.
So that has certainly changed.
The bank now has 3.4 million digital users, 29% of whom conduct their finances entirely online,
which it says indicates the transition toward a new economic landscape.
As we speak, we have about a million customers who are completely digital.
So, we can see that actually the foundation has been built.
This time was actually quite necessary or helpful to shift behaviors.
And actually, those behavioral shifts were quite natural and quite automatic.
But the work for businesses adapting in a new normal doesn’t quite end there.
As Singapore’s economy embarks on a path of recovery, companies also have an important
social role to play in bringing the community along with them.
We are going to have to be so agile and continue to work with local experts and government
to understand what is changing in the landscape.
Working with other multinationals, working with small and medium-sized enterprises to
really glean information that we can pull together and take action.
For Microsoft, that’s a matter of using its pool of employment data, from its products
such as networking service LinkedIn, to help ready citizens for a new future.
The company has already pledged to provide free training to 25 million people this year,
to equip them with in-demand digital skills.
Ultimately, what we are trying to do is support people by identifying trends and knowing where
the next generation of roles and jobs will be.
Helping them to skill up in order to be ready for that.
And then helping them to make sure that they can find those roles and they can navigate
and be able to source what’s next for them.
That plays into the bigger role of multinationals within society, according to DBS, which aims
to bring about more creative solutions in areas beyond its traditional remit.
That includes community projects, such as sourcing food from struggling F&B businesses
to provide 700,000 free meals to those in need.
It’s one of several initiatives born out of a $7.6 million DBS Stronger Together Fund.
You can do community service, which is important.
But if we can also bring together, like in my case, I brought my SME customers along,
supported them while feeding those who needed to be fed, while rallying our people and our
customers and members of the public, to kind of, fulfill this purpose.
So this actually goes back to our DNA, right.
The reason we were started 50-odd years ago was to facilitate the development of Singapore.
So we started being called the Development Bank of Singapore.
So, as we play this important part, right, in the whole development of Singapore
from the third world to the first, what next?
I think this purpose continues to be in our DNA.