Singapore's Digital Transformation Journey.

• Author: Erh, Joey

1. Introduction

   Digital transformation in Singapore has come a long way from when it just started in the 1980s. Through the implementation of various government policies, masterplans and programmes over the years, Singapore has risen to become one of the most digitally transformed countries in the world. At the international level, Singapore appears to be in a relatively good position in terms of digital adoption and transformation. The IMD World Competitiveness centre, which evaluates digital competitiveness in terms of knowledge transfer, business readiness and educational investment, ranks Singapore fifth amongst the sixty-four countries evaluated (IMD 2021). UNCTAD also ranked Singapore fifth amongst 168 countries in their readiness for frontier technologies index (UNCTAD 2021).

   Connectivity and usage of Internet applications are both high as well. Based on 2020 data, Internet access is high at 98 per cent of resident households (IMDA 2021a); 92 per cent of individuals use the Internet, which is higher than the figures recorded in Malaysia (90 per cent) and Thailand (78 per cent), but lower than Brunei (95 per cent) (ITU 2022). Overall households' access to computers (1) is at 89 per cent and is even higher for households with children under 15 (99 per cent) (IMDA 2021a). In terms of usage, individuals mostly use the Internet for communication, leisure activities and getting information. Notably, there has been a rapid increase in the use of the Internet to deal with government/public organizations (from 34 per cent in 2016 to 73 per cent in 2020) and to purchase or order goods and services (37 per cent in 2016 to 68 per cent in 2020) which does seem to indicate that Internet usage is becoming increasingly pervasive in Singapore (IMDA 2021a). On the business front, business usage of computers is at 91 per cent while usage of the Internet is at 93 per cent of all enterprises (IMDA 2021b). Business usage of e-payment has also been on the rise, reaching 85 per cent in 2020 (IMDA 2021b). Overall, the digital acceleration index by enterprises has been on the rise in the last three years, from 28.2 in 2019 to 35.3 in 2021 (IMDA 2021b).

   Singapore's information and communication sector has also grown exponentially. In the last five years, the information and communication sector's GDP has grown by 61.9 per cent (from 2016 to 2021) to S$28.4 billion (current prices) which has resulted in a growth in GDP contribution from 4 per cent to 5.3 per cent (DOS 2021). The industry's revenues have also been on the rise in the last four years (2015 to 2019) with more than 70 per cent of the revenue sourced from overseas markets (IMDA 2021c).

   The successes in digital transformation that Singapore enjoys today can mainly be attributed to the government policies implemented rigorously since the 1980s. At the time of writing, the Singapore government has implemented a total of seven national masterplans in digitization or Information Technology (IT) development and five masterplans dedicated to the development of e-government. Due to the pervasive nature of digitization, there have been other masterplans not developed for the sole purpose of digitization but contributed towards digitization efforts as well. Examples include the Industrial Transformation Maps (ITMs) and Research Innovation Enterprise 2020 Plan (RIE 2020).

   This paper attempts to illustrate how the Singapore government helped the country to digitally transform into what it is today. Specifically, it answers a series of relevant questions, such as: What were the goals of the government interventions? What was the type of policies that were implemented? How were they implemented? And how have these all changed over time?

2. Singapore's Digital Transformation Journey

   Singapore's transformation journey can be broadly divided into five phases:

   * Phase I: The National Computerization Plan and Civil Service Computerization Programme (1980-85)

   * Phase II: National Information Technology (IT) Plan (1986-90)

   * Phase III: IT2000 and the National Infocomm Infrastructure (1991-99)

   * Phase IV: Infocomm 21, Connected Singapore, Intelligent Nation 2015 (iN2015) (2000-16)

   * Phase V: Smart Nation (2016-22)

   Within each phase, the government policies had a different objective that depended on the economic climate, technology advancements and priorities of the time. Through reviewing the digital transformation plans of several countries and existing frameworks such as the Digital Economy for Africa Initiative (D4EA) (World Bank 2020a) and the Connect Harness, Innovate and Protect (CHIP) framework (World Bank 2020b), six common themes have been identified:

   * Economy: Growing the Information Communication Technology (ICT) industry

   * Economy: Digitizing

   * Manpower Development

   * Infrastructure Development (physical, legal and systems)

   * E-government

   * Society

   The analysis of Singapore's more prominent digitalization policies across the various phases can be conducted through these themes. Doing so allows the comparison of themes across phases, which helps the identification of change in trends, types of policy tools used and focus of the government over time. Although the policies may be broadly categorized into these six themes, it is important to note that they do not work in silos. It is often the case that a policy with a certain thematic focus has effects that spill over to other themes or is used in conjunction with policies that have been classified as other themes to achieve a specified goal.

   The following section is a non-exhaustive coverage of the Singapore government's digitalization efforts, which features policies that are novel and noteworthy.

   2.1 Phase I: The National Computerization Plan and Civil Service Computerization Programme

   Launched in the early eighties, the Singaporean government launched its first "digitalization" initiative, the five-year National Computerization Plan. It included the implementation of the Civil Service Computerization Programme (CSCP) to grow the local IT industry and manpower to meet the industry's future needs (Hioe 2001). Established in 1981, the National Computer Board (NCB) was formed to plan, coordinate, implement and support the various computerization efforts across the government and the economy. Due to the inter-ministry nature of their work, the NCB was established under the Ministry of Finance to provide the agency with the clout required for its operations (Wong 1996).

   2.1.1 Economy: Growing the IT Sector. Given Singapore's small size, growing the industry required these firms to export their services and products to large overseas markets instead of only focusing on the local market. While the local companies had a certain level of expertise, they were inadequate for software development (NCB 1984). To address this issue, the government provided learning opportunities for the IT industry via the CSCP projects. By participating in these government projects, local firms would be able to hone their expertise through experience and subsequently be skilled enough for export (NCB 1982). Foreign companies that were leading experts in the industry were also attracted to Singapore to set up their regional headquarters and software development centres; the latter enabled joint development of projects which helped with the transfer of technology (NCB 1982). Collaborating with the Economic Development Board (EDB), NCB tapped into EDB's network of overseas offices to attract multinational companies (MNCs) to Singapore (NCB 1982). In addition to attracting foreign investment to Singapore, the overseas office in Boston served as a means to gather information on the latest trends and technologies in the IT sector (NCB 1982).

   2.1.2 Economy: Digitization of the Private Sector. With the government being such a big proponent of digitization and with multiple IT projects in the pipeline, they were hoping to "lead by example" and encourage the private sector to computerize their processes by exemplifying the benefits of doing so. Local companies in Singapore were relatively small and were likely to adopt a "wait and see" approach with regard to computerization. The government's strong advocacy of digitization was not only to improve its internal processes but to exemplify the benefits to the rest of the economy to encourage them to take action (Teo and Lim 1999).

   The government adopted a myriad of policies to encourage local firms to digitize. To mitigate the high costs involved in digitization, firms were given tax incentives that allowed them to write off their computer hardware equipment under an accelerated depreciation scheme and no import taxes were levied on software or hardware (NCB 1984). "Soft approaches" included encouraging firms to adopt IT via trade associations, professional bodies and the Small Enterprise Bureau (NCB 1982). At the same time, increasing awareness and adoption of IT in the private sector simultaneously help boost the demand for local IT services (NCB 1984).

   2.1.3 Manpower Development. As Singapore had just started its computerization journey, the number of IT professionals in the country was also insufficient to meet the demands of the market. Through a survey conducted by the NCB in 1982, the projected demand for computer professionals by 1985 was 3900 (NCB 1984). However, another survey conducted by the Ministry of Trade and Industry in 1980 showed that there were only 850 computer professionals locally; the demand largely exceeded the existing supply (NCB 1984). Other than the overall quantity of professionals, there was a shortfall in experienced professionals as well. In response to the government's encouragement, firms were employing individuals that were less experienced than required (NCB 1984). Due to the rapid adoption of computers, these issues were not unique to Singapore and were faced by newly industrializing countries.

   Addressing these shortcomings, the NCB adopted several methods to help...