Seek 'green shoots' across sectors, global supply chain niches, says Chan Chun Sing at BT Budget Dialogue

AS SINGAPORE recovers from the Covid-19 crisis, there are many "green shoots" to be sought, whether in emerging sectors, in niches across global supply chains, or in the green economy itself, said Trade and Industry Minister Chan Chun Sing at The Business Times Budget Dialogue 2021, presented by OCBC Bank.

Downside risks remain, around the pandemic's course and global vaccination efforts; big power geopolitics; and domestic challenges facing some countries in South-east Asia, he said.

But a year on, Singapore has moved out of "survival mode" to look at how to emerge stronger, with government efforts shifting further towards helping businesses seize opportunities, said Mr Chan, at the hour-long session along with OCBC Bank's head of global commercial banking Linus Goh.

Firms themselves have been eager to adapt, particularly towards the later part of 2020, said Mr Goh. "What we have observed is many companies being able to take advantage of opportunities," he added.

Last year, it was very much about maintaining capacities and capabilities during the crisis, whereas now it is about building capabilities, said Mr Chan.

Some downside risks themselves bring opportunities. During the pandemic, Singapore's position was strengthened as it was able to maintain supply chain links and continue to serve as a hub for financial services and trade. As global vaccine distribution proceeds, Singapore might also become a hub for this, said Mr Chan.

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And as firms look for places to site long-term investments and ride out geopolitical uncertainty, Singapore can serve as a trusted jurisdiction where talent can be brought in from all over the world and intellectual property is protected, he added.

Asked where "green shoots" can be seen, Mr Chan replied that these do not refer just to specific sectors such as ICT and professional services, but can be found across sectors.

Even in conventional industries, there are critical nodes in the global production chain, he said. "Regardless of which industry, we should try to look for those critical nodes, so that we cannot be easily displaced."

"Green shoots" can also be found in the form of new markets, said Mr Goh, noting that during the crisis, firms were able to ride on digitalisation to reach as far as Latin America.

For local firms, expanding beyond Singapore is crucial if they are to scale up - not just controlling costs but boosting their topline, said Mr Chan.

The speed of evolution and the concept of "speed to market" are also key competitive advantages today, and the government has a role in enabling this through its approach to rules and regulations, he added.

He cited the example of the Monetary Authority of Singapore's regulatory sandboxes for new financial services, and noted the biomedical sector as one where regulators should work closely with the industry for efficiency and speed while upholding trusted standards.

Another potential growth area is the green economy itself. After being an early leader in water management, the next step for Singapore is developing energy management solutions that can be exported, said Mr Chan.

As a trusted jurisdiction, Singapore also has an advantage in areas such as green financing or developing a carbon trading market, he said.

Firms have become more aware and more willing to address issues of sustainability, as real demand surfaces, said Mr Goh. "They have discovered markets, customers who require standards to be fulfilled," he said.

OCBC is doing its part to encourage this by offering sustainable finance solutions to SMEs.

Both in the area of sustainability, and more broadly, the government can facilitate change but companies and workers should make the most of such aid to transform and seize opportunities, the two panellists said.

Asked by moderator Wong Wei Kong, editor of The Business Times, about how to handle the "casualties" of transformation, Mr Chan suggested reframing it in terms of "recycling our capital and labour".

With or without a pandemic, any market economy will have a certain amount of churn, he said: "The question is, how do we help the churn to be much more efficient."

Firms and workers should be able to pivot out of a sector quickly without losing time and wasting resources, and should then be helped to get into new sectors, he added.

As for sectors that are struggling but still aiming for recovery, such as aviation, "there are opportunities for us to see how we can move out faster compared to the competitors in the region and beyond", said Mr Chan.

For instance, while some business travel may be replaced by teleconferencing, there will still be demand at the higher end - and Singapore is positioning itself to capture this, with initiatives such as Connect@Changi.

The full coverage of the dialogue will be carried in Friday’s edition of The Business Times.