The rise of the ecosystem economy
The Rise of the
Ecosystem Economy
Think about it. Digitalisation is re-shaping the world
Physical borders no longer pose a limitation for competition; digital platforms have replaced and outmaneuvered traditional market operations, disrupting the system of intermediaries. Big data, cloud computing and machine learning offer a quantum leap forward in capabilities, and all these changes are taking place faster than ever before, through flexible, scalable systems.
In its recently published Digital Economy Framework for Action, the Singapore government identifies further shifts. It says that within these new ecosystems, “...value chains will converge. Barriers to entry will shift from large capital investments to large customer networks as distribution models shift from a single point to that of multiple nodes. Today's nascent ecosystems are the building blocks for tomorrow’s industry sectors.”
Today’s nascent ecosystems are the building blocks for tomorrow’s industry sectors.
Re-think the Strategy
Those who fail to rethink, and who remain fixed on industry silos are at risk of being left behind not just by customers, but also by investors.
The United Nations’ trend spotting World Investment Report 2018 talks widely of the new industrial revolution (NIR) and its effects globally, powered almost entirely by digital transformation.
United Overseas Bank (UOB) is a leading bank in Asia that is harnessing technology to make the banking experience simpler, smarter, safer and consistent for its customers across the region. According to its 2017 annual report, UOB had invested $1.2 billion in technology over the past four years to improve its digital capabilities and to create financial solutions that its customers need and to help enterprises grow.
For example, UOB launched UOB BizSmart, a cloud-based integrated business solution, to help small- and medium-sized enterprises (SMEs) reap the benefits of digital technology to increase productivity for better business performance. The solution enables SMEs to automate administrative processes such as accounting and payroll, which in turn reduces the time spent on administrative work.
Says Dennis Khoo, Head of Digital Bank and Digital Banking, UOB, “Through solutions such as UOB BizSmart, we are able to help SMEs benefit from the use of digital technology and to become more efficient and competitive.”
Over the past two years, more than 3,500 SMEs across the region have signed up for UOB BizSmart.
Companies with traditional customer networks are finding themselves searching for new partners and digital platforms to plug into. Grocery chains are turning to e-commerce platforms to reach customers tired of the in-store experience. Many companies are considering or implementing multiple sales channels, listing their products on several platforms, from Taobao to Amazon and Lazada. Change is well underway …
UOB is also collaborating with other organisations as part of an ecosystem to support SMEs in their growth ambitions.
In 2015, UOB partnered Google, SPRING Singapore, Enterprise Singapore and other industry players on Go Global, an initiative to help Singapore’s SMEs to expand their businesses internationally. Through a web-based learning portal, SMEs in Singapore can access digital tools and banking solutions to take advantage of export opportunities. In 2017, the initiative enabled more than 2,500 SMEs to digitalise their business and to venture overseas.
In the B2B space, Singapore based company Jing King Tech Group introduced cloud based BPO services, smart cards and biological recognition to their portfolio, now a complete suite of solutions for the banking and government sectors.
Anthony Ong, Group CEO, says that traditional businesses hoping to move into the digital economy need to change their mindset and look past fear of digitalization to its merits.
“A digital platform allows these traditional businesses to go beyond the sector they are focusing (on). It allows them to cross borders.”
— Anthony Ong, Group CEO of Jing King Tech Group
The New Ecosystem Economic Players
Singapore itself is well-placed in this march to the new horizon
Already in 2018, it’s topped the 2018 list of best performing smart cities globally, and the government recently announced it’s ready to lead a collaborative push across ASEAN to pioneer even more smart city projects.
Singapore-based Sea (formerly, Garena). It rose in the digital space, creating a platform for games, before expanding into e-commerce and e-payments for the region.
Fintech company, Fundsupermart, which has moved from selling unit trusts to become a fully-fledged online financial portal, offering insurance, stocks and bond products for investors across the region.
Carousell – the Singapore-based online marketplace for buying and selling secondhand goods that grew from a local digital platform to being active in seven markets within six years – borders simply had no impact. With over 158 million listings across all their markets, it has grown from a team of three to one of 200.
Singapore: Where World-Class Digital Business Can Thrive
Already, we are seeing successes. Taiger is an Artificial Intelligence (AI) company from Europe that's now headquartered in Singapore, driving a boom in the region’s AI capabilities and already a global force, with offices in Spain, Hing Kong, Vietnam and the US, as well as projects in South America.
Another tech startup, CXA Group – a benefits consultancy, brokerage services and insurtech solution solutions provider – was founded in Singapore in 2013. CXA launched with just three Fortune 500 clients and grew rapidly. By 2017, CXA had set up its own operations in Hong Kong, Shanghai and Beijing and expanded its digital footprint across 20 cities in Asia including India, Indonesia, Japan, Malaysia, Philippines, South Korea, Taiwan and Thailand. CXA's continued growth is evidenced by acquisitions in Singapore and China. It has received $33 million in two rounds of VC funding and is currently valued at US100 million.
These are two truly world-class businesses that are thriving. There are many others emerging.
“Singapore plays an important role in the digital economy in this region,” says Rowena Bhagchandani, co-founder and CEO of independent advertising agency, BLKJ, and the woman who may soon be entrusted with positioning the major players of these new ecosystem economies.
“Globally it depends on three things: the ecosystem to support and build new world-class digital businesses; the availability of talent in key tech areas; and the most important is a culture of innovation and hunger, which basically means that we also need to accept failure.”
– Rowena Bhagchandani, co-founder and CEO, BLKJ
Failure, of course, has two meanings in this context. The context Bhagchandani refers to is fail-fast thinking that ultimately breeds innovation, adaptability and resilience. Encourage it, and you foster a dominant force that can impact not just a region, but the entire world.
Speaking at a recent conference, Tan Kiat How, CEO of Infocomm Development Authority of Singapore, reiterated the simple truths of what is happening all around us right now. “Digital technology is transforming every sector in every work place; every business can be a digital business, every worker empowered by technology, every citizen connected,” he said.
“Singapore is building on many investments and foundations laid over many years, putting in place infrastructure and manpower, developing skills, supporting companies so they can grow and thrive in the region.”
– Tan Kiat How, CEO of Infocomm Development Authority, Singapore
A World of Digital Possibilities Awaits
Visit Singapore Digital (SG:D) web pages to learn more about the nationwide movement to unify Singapore's digital efforts, and find invaluable resources such as the Digital Economy Framework for Action.