Singapore will set aside an additional $200 million over the next few years to enhance its digital capabilities for workers and businesses, announced Minister of Finance Lawrence Wong in his Budget 2022 speech on Feb 18.
The country will also upgrade its broadband infrastructure with the view of increasing broadband access speeds by about 10 times.
In addition, the government will invest in future technologies including 6G cellular technology to “ride the next communications and connectivity wave”.
"The use cases for such high speeds are still nascent, but there are many new possibilities for augmented and virtual reality tools, limited only by our imagination," says Wong in his speech.
Businesses will also be able to adopt advanced integrated solutions that include leveraging on artificial intelligence and cloud technologies from April 1 under the Infocomm Media Development Authority's Advanced Digital Solutions initiative.
The initiative was launched in 2020 to help businesses adopt solutions such as robotics.
Enterprises that take part in the initiative will receive up to 70% in funding support.
Following the announcement, the research team at OCBC Investment Research see data centre REITs such as Keppel DC REIT as a beneficiary on Singapore's focus on building up its digital economy.
“[The focus on building its digital economy] will enhance Singapore’s competitiveness in establishing a data centre ecosystem and attract key players such as hyperscalers,” says the OCBC team.
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Other SGX-listed REITs with data centre holdings such as Mapletree Industrial Trust (MINT) and Ascendas REIT (A-REIT) will benefit from the focus, too.
On the move to enhance Singapore's digital capabilities, Thomas Schaumburg, partner and Southeast Asia digital transformation and technology lead at Capco says, “To thrive as an innovative economy, Singapore has to push ahead with promoting smart and digital savvy enterprises, as this will help address the shortage of talent and build scalable business models as a platform for growth.”
“Besides the focus on productivity, developing the brand of Singapore as a global innovation hub and competing with the UAE will require continued investment in technology-enabled start-ups through grants and tax incentives,” he adds.
Ng Wee Wei, Singapore country managing director at Accenture says she is “heartened to see more support” for businesses in their digital transformation journeys.
“These enhanced schemes provide a targeted, tailored approach for SMEs at different stages of their growth and digitalisation journey. With the additional support, they will be able to overcome the challenges of not having the resources to find digital solutions that best meet their needs,” says Ng.
“This will contribute to a more innovative and entrepreneurial business climate and promote a healthy and well-performing ecosystem where SMEs can thrive. Helping SMEs develop technological solutions more readily now will also position them to create new value at the intersection of digital technologies and sustainability. Businesses that pursue the path of twin transformation, a combination of digital and sustainability transformation, are 2.5 times more likely to be among tomorrow’s strongest-performing business,” she adds.
Vaibhav Dabhade, CEO at Singapore-headquartered software-as-a-service company, Anchanto, says: "As digitalization continues to be one of the biggest enablers of growth and recovery in a post-pandemic world for the retail sector, the additional $600 million in grants will come as a valued support to address concerns of traditional retailers still struggling with the nuances of digital commerce and logistics. This budget will enable businesses to equip themselves with the right technology, bring in more agility in their business, implement winning omnichannel strategies, and meet consumer demand.”
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The team at KPMG sees the latest budget highlighting the need to keep upgrading broadband infrastructure and to invest in future technologies such as 6G. " Certainly, the pandemic has turbocharged the trends towards digital acceleration in all sectors of the economy," says the team.
"As we look at the current trend of Metaverse and the virtual world, we are seeing an exponential need for data streaming, high velocity and low latency data. New technology, such as 5G and in the future 6G, will drive the push for more creative ways to integrate immersive experiences within our real world and adjacent “worlds”. These provide opportunities for businesses to engage with consumers differently and market their products. To best capitalise on these emerging technologies, there will be a strong need to drive new ways of working, while encouraging lateral thinkers and problem solvers," adds the KPMG team.
Photo: Bloomberg
