The rise of digital and data flows in Singapore

Diaan-Yi Lin, senior partner and managing partner in McKinsey’s Singapore office, discusses how digital platforms have transformed global trade flows, and how this affects Asian countries such as Singapore.

What are the top trends influencing Asia’s rising share of global flows and networks?

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The biggest trend affecting global flows and networks across Asia is the rise of digital and data flows. Historically, trade flows have been driven by governments, large MNCs, and international financial institutions. However now, with digital technologies and platforms, the cost and ability for businesses to be done globally has changed.

Consequently, even small companies and individual entrepreneurs can participate equally on this global scale. When we surveyed companies, over 85 percent of tech-based startups report some type of cross-border activity.

How do these flows impact countries like Singapore?

Singapore today is usually ranked number one or two in indices that measure the intensity of these digital flows—usually called connectedness or innovation indices—which is completely disproportionate to the size of its very small land mass, population, and economy. Many other Asian countries as well, especially China and Indonesia, are quickly rising on these league tables as the intensity of these digital flows continue to exist in these countries too.

What are the implications of digital globalization for money makers?

Digital globalization makes policy choices much more complex. Value chains are shifting, new hubs are emerging, and economic activity is transforming.

How should companies and governments prepare for this next phase of globalization?

Three things will be important: the right infrastructure, the right institutions, and the right business environment.

You will need infrastructure that is secure and speedy, and provides connectivity. You need institutions that are able to set standards around valuing and protecting data, and the right business environment that encourages innovation and this ‘fail fast’ culture.

It is only with these things that companies and citizens will be able to fully participate in this increasingly digital economy.

For companies to participate, continued investment in new types of talent will be required. This means talent that is much more able to operate in this digital technology world, and companies will of course have to continue to reimagine business models

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