AS SINGAPORE emerges from the Covid-19 crisis, there are opportunities to be sought not just in emerging sectors but across all industries, said Minister for Trade and Industry Chan Chun Sing at The Business Times Budget Dialogue 2021, presented by OCBC Bank.
There are downside risks that remain - around the pandemic's course and global vaccination efforts; big power geopolitics; and domestic challenges facing some countries in South-east Asia, he said.
But a year on from the pandemic, Singapore has moved out of "survival mode" to look at how to emerge stronger, with government efforts shifting further towards helping businesses seize opportunities, said Mr Chan during the hour-long dialogue alongside OCBC Bank's head of global commercial banking Linus Goh.
Firms themselves have been eager to adapt, particularly towards the later part of 2020, said Mr Goh. "What we have observed is many companies being able to take advantage of opportunities," he added.
Last year, it was very much about maintaining capacities and capabilities during the crisis, whereas now it is about building capabilities, Mr Chan said.
Some downside risks themselves bring opportunities. During the pandemic, Singapore's position was strengthened as it was able to maintain supply chain links and continue to serve as a hub for financial services and trade.
As for the ongoing distribution of Covid-19 vaccines around the world, Singapore might also become a hub for this, said Mr Chan.
And as firms look for places to site long-term investments and ride out geopolitical uncertainty, Singapore can serve as a trusted jurisdiction where talent can be brought in from all over the world and intellectual property is protected, he added.
Asked where the "green shoots" of recovery can be found, Mr Chan said that these refer not just to specific sectors such as infocomm and communication technology and professional services, but occur across sectors.
Even in conventional industries, there are critical nodes in the global production chain.
"Regardless of which industry, we should try to look for those critical nodes, so that we cannot be easily displaced," the minister said.
"Green shoots" can also be found in the form of new markets, said Mr Goh, noting that during the crisis, some companies were able to ride on digitalisation to reach as far as Latin America.
For local firms, expanding beyond Singapore is crucial if they are to scale up - not just controlling costs but boosting their topline, said Mr Chan.
Apart from digital platforms, firms can leverage wider networks such as the Singapore Business Federation's GlobalConnect@SBF initiative and the Southeast Asia Manufacturing Alliance.
The government can also make better use of overseas consular and trade offices to link companies up with contacts elsewhere, he said.
The speed of evolution and the concept of "speed to market" are also key competitive advantages today, and the government has a role in enabling this through progressive rules and regulations that enable good ideas to be trialled, he added.
Mr Chan cited the example of the Monetary Authority of Singapore's regulatory sandboxes for new financial services, and named the biomedical sector as one where regulators should work closely with the industry for efficiency and speed while upholding trusted standards.
But while the government can facilitate change, companies and workers themselves should make the most of such aid to transform and seize opportunities, said the two panellists.
Asked by moderator Wong Wei Kong, the editor of The Business Times, about how to handle the "casualties" of transformation, Mr Chan suggested reframing it in terms of "recycling our capital and labour".
With or without a pandemic, any market economy will have a certain amount of churn, he said.
"The question is, how do we help the churn to be much more efficient," said Mr Chan. Firms and workers should be able to pivot out of a sector quickly without losing time and wasting resources, and should then be helped to get into new sectors.
As for sectors that are struggling but still aiming for recovery, such as aviation, "there are opportunities for us to see how we can move out faster compared to the competitors in the region and beyond", said Mr Chan.
For instance, while some business travel may be replaced by teleconferencing, there will still be demand at the higher end - and Singapore is positioning itself to capture this, with initiatives such as Connect@Changi.
Another hard-hit sector that has managed to be nimble is wholesale and retail trade, said Mr Goh.
Some players have gone beyond being traders, using their knowledge of sustainable sourcing and market demand to facilitate transactions and even develop new products.
Firms that stick to arbitrage may be made obsolete by computers, but value-adding - by providing assurance and trusted quality standards, or offering complementary products and services - changes the game, said Mr Chan.
Overall, by evolving faster to meet new demands, "we will get ahead of the competition as everybody's trying to recover", he said.
"That will really distinguish us from the rest of the competition who might be trying to get back to the pre-Covid days, whereas we have made the determination ourselves that we are not going back," said Mr Chan.
Even as gross domestic product recovers to pre-Covid levels, that will be a strictly quantitative return. "Qualitatively, it is quite a different situation altogether," he said.