Singapore's Smart Nations program is focused on making every aspect of life, from transport to water systems to even garbage disposal, more efficient. Under that program, the government is placing sensors in cars, roads and homes to measure how things run, and then tapping that data to make them run better.
When asked why his country is able to foster innovation, Singapore's foreign minister and head of its Smart Nation initiative, Vivian Balakrishnan, told CNBC that a large urban population and a lack of bureaucracy in its single-tier government are part of what makes the city state an ideal laboratory for new ideas.
"We are a single layer of government. So we may not have invented the autonomous car, but in terms of speed, the change in rules and regulations, we can do so far more quickly than in many other places," Balakrishnan said.
While Singapore continues to rise in the field of innovation, its long-time competitor Hong Kong slipped two notches in World Economic Forum's Global Competitiveness index in 2016 to ninth place. The WEF cited innovation as the weakest factor in the city's performance.
Nicholas Yang, Hong Kong's secretary of innovation and technology, told CNBC's "Squawk Box" on Thursday that innovation is a continuous process, and that it was a topic outgoing Chief Executive CY Leung had been focused on.
Leung called for financial and policy support to promote growth in Hong Kong's technology and innovation sectors in his final policy address in January this year. He also announced 18 billion Hong Kong dollars ($2.3 billion) would be invested in the sector.
Yang also highlighted the need for changing Hong Kongers' mindset from short-term profit to longer-term growth.
"You've got to think about what innovation can and technology can do in terms of social improvements. And this is something that the current administration is trying to do it's not just economic growth it's also social improvement," he said.