Singapore

Index performance

Survey highlights

• 45% of surveyed firms have five or more digital partnerships

• 53% say their business unit uses data analytics to a ‘large’ or ‘great extent’

• 35% store all or most their business unit’s data in the cloud

#1

Overall

#1Digital

infrastructure

#4 Human capital

#2

Industry connectivity

Overview

Singapore is the top-ranked country in the Asian Digital Transformation Index. The city-state’s strong performance is thanks primarily to its well-developed digital infrastructure, which is made easier by the fact it is a small island country with a concentrated population. In addition it scores highly thanks to a supportive and co-ordinated set of government policies in support of infrastructure development, business use of technology and entrepreneurship more generally. Singapore also compares favourably with other Index countries in the nurturing of technology talent and in industry connectivity—firms’ innovation interaction with digital partners, networks and communities. Key areas for improvement —much the same in all Index countries—are building talent pools with advanced digital skills (i.e. not just engineers) and expanding data sharing to enrich its firms’ digital partnerships.

Overall Score

Average 45.8

1. Singapore 75.6

2. South Korea 72.5

3. Japan 70.7

4. Hong Kong 65.7

5. Taiwan 65.1

6. Malaysia 42.0

7. China 33.9

8. Thailand 23.9

9. India 19.3

10. Philippines 18.8

11. Indonesia 16.0

The environment for digital transformation

Singapore has long been acclaimed for its efforts to build a strong business environment. It has topped the World Bank’s Doing Business rankings for 10 years in succession, and for six years has ranked second in the World Economic Forum’s Global Competitiveness Index. In the latter it also receives high marks in several technology-related criteria, such as quality of STEM (science, technology, engineering and maths) education, international technology transfer and firm-level technology absorption. It should thus be no surprise that Singapore is ahead of its regional counterparts in the Asian Digital Transformation Index.

Wynthia Goh, chief digital officer, Asia, with Aviva, a global insurance provider, believes Singapore merits such high rankings: “The physical [technology] infrastructure here is excellent. The regulatory structure is also very strong; in the financial services industry, the regulator plays an important role in encouraging digital development. It has a keen awareness of the need for the industry to transform itself, and actively encourages such transformation in a variety of ways.”

Singapore-based executives surveyed by the EIU agree, albeit with reservations. About one-third of respondents say development of the digital transformation environment has been “very successful,” although the majority (55%) deem it no more than “somewhat successful.” They ascribe as much importance in this endeavour to the government’s ICT infrastructure policies as to favourable tax policies. (In most other Index countries, the latter are deemed to be the most important factor.)

Singapore receives the highest possible scores in the Index in several infrastructure indicators, such as 4G mobile network coverage, ICT investment and ICT laws. In the human capital category, the country earns the highest possible score in STEM education. This serves to underscore Singapore’s strengths in developing top-notch IT engineers and developers. According to Ms Goh, it is one of the reasons Aviva decided to establish its Asia-Pacific centre of digital expertise here (see ‘Aviva’s digital garage’). She acknowledges, however, a shortage of talent in Singapore (as elsewhere in the region) with expertise in more advanced digital areas, such as data analytics.

The frontline: digital transformation of businesses

Singapore businesses are no strangers to the use of such technologies. In the survey, over half (53%) of executives say their business unit currently utilises analytics tools to some extent.

The greatest impediments to digital transformation at respondents’ companies (top responses)

And 47% say their unit uses embedded sensors (the core of the Internet of Things) in their products or processes. Over one-third of companies in the survey store most of their data in the cloud and access most of their business applications there. Moreover, data analytics and cloud computing are certain to become key areas of focus of companies’ digital transformation efforts in the future, judging by the survey, whereas until now such efforts have mainly been focused on the use of social media.

Mobile has also been an important focus of digital development for many companies, including Aviva—which is not surprising given the extremely high mobile device penetration and usage rates in Singapore. Ms Goh says that Aviva’s efforts to improve its customers’ digital experience via mobile have figured prominently in its digital transformation efforts.

Singapore businesses appear to be benefitting from their investments in digital transformation. Over two-thirds of survey respondents (67%) say such investments have already proven their value. Digital transformation efforts have led almost eight in 10 (78%) surveyed firms to alter their business model in some way.

1. Digital Infrastructure

Average 47.9

1. Singapore 80.1

2. South Korea 74.4

3. Hong Kong 70.7

4. Taiwan 66.5

5. Japan 63.5

6. Malaysia 53.7

7. China 36.4

8. Thailand 22.5

9. Indonesia 19.3

10. Philippines 18.8

11. India 17.9

2. Human Capital

Average 46.0

1. South Korea 82.2

2. Japan 80.2

3. Hong Kong 76.1

4. Singapore 74.5

5. Taiwan 68.0

6. Malaysia 42.5

7. China 28.9

8. Thailand 20.6

9. Philippines 16.3

10. India 10.8

11. Indonesia 5.7

3. Industry Connectivity

Average 39.7

1. Japan 78.9

2. Singapore 64.7

3. Taiwan 57.8

4. South Korea 55.2

5. Hong Kong 40.4

6. India 33.6

7. China 33.3

8. Thailand 31.9

9. Philippines 20.5

10. Indonesia 11.0

11. Malaysia 9.2

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The chief benefits currently being gained from digital transformation initiatives (top responses)

Digital connections

The Index assigns Singapore a relatively high score for the strength of its digital partnerships (ranking second on this measure behind Japan). Indeed surveyed executives see their firms as active players in digital partnerships—collaborative associations with other companies, networks or communities. Almost half (45%) are involved in five or more such partnerships, and nearly one-quarter (23%) in more than 10.

The chief benefits such partnerships have yielded include productivity improvements, faster speed to market and enhanced brand awareness. The most important prize gained from digital collaboration has, however, been more innovative ideas for new products and services. Ms Goh reports that Aviva’s digital garage works with start-ups and other innovators, who share ideas and expertise with the company’s own specialists. “We expect that, some of the time, we’ll be able to build new services for customers internally, but at others we’ll partner or engage in co-creation with start-ups providing interesting services or solutions. This is part of the idea of the Singapore garage.”

Some companies develop new ideas for products or processes with the help of informal open innovation communities. Over half of surveyed executives (57%) report their firms have benefitted extensively from involvement in such communities.

Nonetheless, there is recognition amongst business leaders that their digital partnerships could yield much more. A clear majority (75%) of respondents say their firms need to become much better at leveraging their digital partnerships. The latter, after all, will be integral to their ability to drive through the digital transformation of their businesses.

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Aviva’s digital garage

When it comes to building and tapping digital expertise, multinational companies enjoy obvious advantages of scale and resources over smaller ones. The right talent to manage and execute major digital initiatives may be lacking in one region, but they can be run from another where expertise is greater. In the case of Aviva, a global insurance provider, that has usually been its London headquarters where it established a centre of digital expertise which it calls a “digital garage” in 2015. Now, however, the firm’s growing digital initiatives in Asia are supported by a Singapore-based “garage,” which groups under one roof around 100

of the company’s top technology engineers, creative designers and customer-facing staff working in the region.

Wynthia Goh, Aviva’s chief digital officer for Asia, says its Singapore hub brings together digital expertise in one location to support the projects of all its individual country operations in Asia. She explains that it would be difficult at present to build such capabilities in every country. In the Singapore garage, however, “we have digital product design teams, we have UX experts, we have digital marketing experts, we have innovation experts and

analytics experts. This is a pool of talent that we are able to centrally locate in Singapore, a good base from which to support many of the countries in Asia.” That extends as far as Aviva operations in China and Indonesia.

The major focus of the garage’s activity at present is using data analytics to devise more user-friendly interfaces for its customers. This includes development of a single customer portal showing all their Aviva products on one screen. It also involves the creation of products for newly profiled customer segments, such as young, single urban-based professionals.

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