Lack of trained human capital is to blame.
The Singapore government has launched Smart Nation plans to increase productivity, but their implementation is still likely to cause mixed results, BMI Research said.
According to the firm's analysis, programmes that are aimed at developing data analytics capabilities and cybersecurity, as well as efforts to harness data to improve productivity, are longer term goals that will take Singapore time to develop due to the lack of trained human capital.
Even Prime Minister Lee Hsien Loong himself said that there was a worldwide shortage of engineers, programmers, data analysts, and technicians, and he spoke of the need to build up Singapore's talent pool.
Moreover, the Lion City remains vulnerable to cybercrime due to its status as a financial hub. It scored 83.5 in BMI Research's Financial and Cybercrime sub-index, not far off from the Asian average of 83.4.
BMI Research said the economy relies heavily on Internet-based interactions, so security and stability and highly important for the country.
Singapore is also just starting to build infrastructure to harness big data.
"However, given the government's commitment to shifting the country towards productivity-driven growth, we believe that Singapore will likely continue to develop its digital infrastructure capabilities, boding well for longer term growth," BMI Research said.
On the upside, the initiatives to develop 5G capabilities and improve the digital capabilities of small and medium enterprises (SMEs) likely to be the first to see results.
Singapore has always had significant potential to develop a 5G network and the Internet of Things (IoT) due to its "strong fundamentals."
Moreover, BMI Research noted that it keeps on tapping the private sector to support the development of the fintech sector, particularly in the mobile e-payments segment.
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