There is no one-size-fits-all, textbook strategy for Singapore companies in dealing with disruption, although fostering top management buy-in and building narratives and a culture to ignite entrepreneurial activity will go a long way.
This was a key finding from a thematic discussion held on Wednesday by the Group on Disruptive Technologies under the Committee on the Future Economy (CFE).
Chaired by Janil Puthucheary (Minister of State for Communications and Information, and Education) and Caesar Sengupta (vice-president of product management at Google), the group's function is to examine the impact of disruptive technologies on the Singapore economy and recommend proposed responses.
Wednesday's discussion - one of the many CFE-related consultations happening throughout the year and the first on disruptive technologies - saw some 50 representatives from across 12 sectors share ideas on how to respond to disruption: a state where new technologies create potential for economic displacement or provide opportunities for entirely new economic sectors to emerge.
This is timely, because "all" industries will be disrupted in the next few years, reported Anand Nandakumar, director of Deloitte's strategy consulting unit Monitor Deloitte. He was there to present results from the Monitor Deloitte Singapore Disruptive Digital Technology Survey conducted in May on the economy-wide implications of disruptive technologies.
In particular, the retail trade, infocomm and financial sectors are likely to face significant disruption in the shorter term (2-3 years) due to their high digital potential, he said. Even so, every sector will be impacted differently and there is a need for customised approaches, he urged.
A challenge here however, is an apparent lack of nimbleness. While half of the survey respondents view disruption as important, just under half of them deem their companies to be late adopters or laggards, said Mr Nandakumar. As well, Singapore companies still have a preference for the "sure thing" ie, tried-and-tested products or business models, which he said may hinder innovation efforts.
This preference could hold more true for incumbents, which have been found to tend towards a "cautious, empirical" approach to commissioning technologies, and not cannibalizing their core business model, according to a research report, which was presented at the discussion by secretariat members of the Group on Disruptive Technologies.
Incumbents should be distinguished from startups and SMEs (small and medium enterprises) when it comes to strategies for managing disruption by virtue of their distinctive concerns, the members added.
SMEs, for instance, have been found to view the potential payoff from investing in innovation as "not enough" due to their cost structures and operating environment, and that beyond using technology to drive operational efficiency, few know how to harness it for strategic advantage.
Startups, which typically operate in nascent markets, share that "regulatory grey areas" make it harder for them to grow and succeed, and that funding philosophies (eg, the need to show revenue) and operating realities (eg, the mission to build a community first) can be better reconciled.
Leadership is ultimately key, said Kuok Meng Ru, managing director of Swee Lee Music, and Lim Chee Kean, chief of Ascent Solutions. Both men, who at the discussion shared their respective company's experience in embracing disruptive technologies, agreed that innovation efforts live or die by management priorities and incentives; it "has to be top-down".
Google's Mr Sengupta, speaking to reporters on the sidelines of the discussion, stressed the importance of culture in enabling disruption, and entrepreneurs and companies to venture and grow organically.
He said: "Singapore should develop a culture of creation. It should also think about how to leverage its location, well-positioned to benefit from the huge growth in the region."
Dr Puthucheary told reporters that there is "certainly room" for the Singapore government to be more of an innovator and flexible regulator, even with its obligation to public accountability. "We need a process so that our legislation or regulation is able to catch up with technological changes. It's something we're looking at."
The minister added that the discussion on Wednesday is a "deep dive", bringing together diverse people to identify commonalities across different domains and to propose recommendations for later in the year.
The nearly-three-hour-long discussion also featured close-door, breakout discussions through which participants - split into six groups and led by facilitators from the secretariat - brainstormed responses to disruptive technologies.
This article was first published on June 2, 2016.
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