How can local businesses stay ahead?
The impeccable strategy that helped propel Singapore to first-world status in a span of fifty years might need to be revised in light of the rapidly changing global landscape, according to a report by the Singapore Business Federation (SBF).
The SBF highlighted five megatrends that will shape Singapore's future economic strategies and businesses' future approach. Citing a study by PwC, the SBF showed how Singapore companies can position themselves to stay ahead of competition in coming y4ears.
1. Demographic and social change
The world is generally getting wealthier while populations in developed countries are getting older.
"This is creating all sorts of new opportunities, particularly for companies in the sectors in which richer consumers typically spend their money. Demographic and technological changes are causing massive economic shifts, both between and within countries, and thus equally momentous swings in consumption," the report said.
2. Shifts in global economic power
China is cementing its trade dominance in Asia with its One Belt, One Road initiative and the launch of the Asian Infrastructure Investment
Bank (AIIB). Across the world, the United States is also pivoting to Asia through the successful conclusion of the Trans-Pacific Partnership (TPP) negotiations, representing nearly 40% of global GDP.
"Singapore is in the confluence of these two major shifts and therefore in a unique position to capitalise on the opportunities," noted the report.
3. Rapid urbanisation
More people are living in cities, with the world's urban population forecasted to jump by 72% by 2050. Much of the growth is taking place in developing countries, but developed markets also have plenty of needs that businesses can pounce on.
"Rapid urbanisation brings major implications for businesses as they refocus their offerings, marketing and distribution towards an increasingly urban customer base with distinct needs and consumption habits. Singapore should see its connections not just with countries, but also with cities and regions. Municipal governments are clearly looking for urban solutions. In this respect, Singapore-registered businesses should ride on Singapore’s success to offer solutions such as urban planning and water management," said the report.
4. Climate change and resource scarcity
Climate change and dwindling resources will result in a greater focus on corporate responsibility and sustainability.
"Businesses must take the lead in mitigating environmental damage and tackling climate and resource challenges, while simultaneously striving to make their organisations more agile and resilient. If businesses are to rise to these challenges, sustainability will be vital. Corporate responsibility has evolved from a ‘luxury’ to a business imperative," noted the study.
5. Technological breakthroughs
The competition is simultaneously increasing as emerging-market companies fight for the same consumers that mature-market companies are targeting. Technology has also lowered the barriers to entry in many industries, and some of the most disruptive new players could come from completely unexpected quarters.
"Indeed, the impact of digital disruption is now so pervasive that no business in any sector – from the smallest family business to the largest multinational – is immune from it. Singapore’s Smart Nation initiative as well as her focus on the Future Growth clusters needs to factor in such disruptions to be well-positioned to ride the next wave of growth," said SBF.
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