Speech By Mr Heng Swee Keat, Minister For Finance, At Funan’s Topping Out Ceremony, On Friday 28 September 2018 At 9.15am, At The Funan Showsuite28 Sep 2018
Mr Ng Kee Choe, Chairman of CapitaLand Limited
Mr Lee Chee Koon, President & Group CEO of CapitaLand Group
Distinguished Guests, Ladies and Gentlemen
1. Good morning.
2. I am happy to be back at the Funan Showsuite today, to celebrate Funan’s topping-out ceremony. Earlier on when I saw those videos, I must say that it is very exciting, particularly the first two videos on what we can look forward to, and on the last video on the process of building this place. Earlier on hearing Kee Choe, indeed growing up in Singapore, many of us have fond memories of the old Funan mall. I remember it as “Funan the IT mall”, though some of the younger ones here may know it as “Funan DigitaLife Mall”, but regardless of the name, it was the go-to place in Singapore to find any IT or electronic gadgets that you needed.
3. But Funan did not start as an IT mall. The original Funan Centre, when it opened in 1985, was a general shopping centre. It was perhaps better known for all the music shops on the third floor, or the food at the air-conditioned food court on the seventh floor. However, following the late 1990s’ tech boom, it was the sixth floor, the Computer Mart, that expanded and eventually occupied a large part of the mall.Just as how Funan adapted to the previous tech boom and re-branded into the IT mall we knew and loved, Funan is now undergoing the next stage of transformation, to prepare itself for the digital economy.
4. Indeed, the rapid pace of digitalisation and ICT development experienced over the last few years, is expected to accelerate even further in the decade ahead. McKinsey Global Institute calculated that global cross-border data flows have increased 45 times since 2005, and is continuing to grow. Closer to home, we have also seen the explosion of data. For example, Singapore’s mobile data consumption has risen 300-fold compared to just a decade ago.
5. For those who are prepared, the digital economy can be a significant growth opportunity, both domestically and in the region. Many companies across various sectors are thus already leveraging on the latest technologies – cloud computing, big data, artificial intelligence, among others – to transform their businesses and derive new revenue streams.
6. But for those who are not ready, they can fall behind or have to catch up. Digitalisation has lowered barriers and cross-border business costs, and also enabled the instantaneous creation and trade of digital goods and services. As a result, the digital economy does not have defined national borders, and local businesses now face the full brunt of global competition. When I was a student reading Economics, the big distinction among sectors in the economy was ‘tradeable’ or ‘non-tradeable’ sectors. “Non-tradeable” means that it is not open to cross border trade. Indeed, your “pop and mom” shops are in many ways in ‘non-tradeable’ sector in many places. But with e-commerce, even traditional ‘non-tradeable’ sectors like retail are now under pressure from global eCommerce giants. Just look at the US. Long-time retail giants such as Walmart and Macy’s have been closing stores amid falling sales, and well-known toy retailer Toys ‘R’ Us also filed for bankruptcy in September last year. On the flip side, Amazon doubled its net sales revenue in 3 years. In the region, we see the rise of many of the Chinese firms including Alibaba and they are giants in their own rights.
7. With technology so deeply interwoven into our daily activities, even shaping our preferences as a consumer, retailers have to transform and adapt to this new ‘normal’. The redevelopment of Funan mall is a positive example of this transformation. The new Funan mall will be Singapore’s first “Online & Offline” mall, with omnichannel retail infrastructure to offer consumers a holistic, yet personalised retail experience. Powering all of this is an ecosystem of sensors, data analytics and even facial recognition tools to better understand consumer shopping habits and preferences. These are good ideas that have gone into the rejuvenation of Funan, and I would like to commend CapitaLand, and your partners, for the hard work and innovation throughout this redevelopment process.
8. There is still much more that needs to be done to make Singapore a leading digital economy in the world, and the Government will continue to support more companies through their own transformation journeys. Under the Research, Innovation and Enterprise 2020 Plan (RIE 2020), we will continue to invest significantly in research and development, for domains such as Urban Solutions and Sustainability, and Services and Digital Economy. In June this year, we also launched the Open Innovation Platform, a virtual crowd-sourcing platform to enable Singapore-based companies, or “Problem Owners”, to collaborate with “Problem Solvers”, consisting of start-ups, other companies and research institutes, to solve real business challenges and develop innovative solutions. With these plans, hopefully more companies can follow in the footsteps of CapitaLand, and continually re-invent ourselves in the face of technological changes.
9. Ending on a lighter note, my Treasury staff are eagerly anticipating the mall’s opening, and I am also hoping that it will enhance the attractiveness of working in The Treasury. I look forward to seeing these innovations and ideas come into fruition, and I am very happy to see all the great things that are coming and will make this a great place to live, work and play.
10. Thank you very much.