We are witnessing a fractured world order due to fractious domestic politics, caused by digital disruption. The signs are obvious – strategic tension between the superpowers, political polarisation, anxiety over the future of jobs and anger over sharpening inequality.

There is a clear chain of causation. Technology drives human progress. Early masters of technology accumulate and wield disproportionate power. Hence, major technological breakthroughs always cause revolutionary economic shifts that disrupt society and politics, in turn, altering the global balance of power.

We have seen all this before. The Industrial Revolution in Great Britain transformed its agrarian society and economy. Demand for labour led to urbanisation as feudalism gave way to capitalism.

But the exploitation of labour and vicissitudes of work created a backlash, which later gave rise to trade unions and the Welfare State.

At the same time, industrial Britain’s search for raw materials and new markets saw trade expeditions dispatched, the navy strengthened and outposts established – as Singapore was exactly 200 years ago. Thus emerged an empire on which the sun never set, and a century of pre-eminence for Great Britain.

Henry Ford’s moving assembly line created an accelerated cycle of mass consumption and mass production.

A new Gilded Age of increasing inequality emerged as capitalists consolidated their wealth. Across the globe, reactionary responses led to growing extremism – fascists on the right, and communists on the left. Economic rivalry and political miscalculations sowed the seeds for the world wars.

It was the United States, which, having outdone all other countries in technological advancement, emerged from World War II as a pre-eminent global superpower.

It generously launched the Marshall Plan for Europe and reconstruction of Japan. It set the rules and underwrote the post-war international order. The United Nations, the International Monetary Fund and World Bank, and World Trade Organisation were created. These formed the foundations of a rules-based multilateral system, which gave newly independent countries like Singapore a small seat at the table.

Globalisation in the post-war period was again driven by technological revolution.

Winners and losers

While the net impact of globalisation is positive – and Singapore has benefited profoundly – we should not overstate its benefits.

There have always been winners and losers, and many have felt left behind. Blue-collar workers in the West have seen wages stagnate, jobs migrate and inequality grow, and are increasingly aggrieved.

Now, a new digital revolution is upon us – the rise of smart technology due to machine learning.

In 2016, Google’s Alpha Go program beat the human professional Go player Lee Sedol without handicaps for the first time. This represented a quantum leap in artificial intelligence. Go, unlike chess or Sudoku, has more combinations of moves than there are atoms in the universe, and it cannot be solved via standard rules-based programming.

We find ourselves in a new digital Gilded Age.

The winners are supranational tech companies like Google, Amazon, Apple and Facebook, with rapidly growing economic and political influence. The losers are those unable to skill up and who have lost jobs because of disruptive technology.

The pace of change is accelerating. New jobs will be created, but not fast enough to replace the old, exacerbating the scale and severity of dislocation.

Machine-learning and pattern-recognition technology enables machines to see, listen and speak, and could soon make many middle-class white-collar jobs redundant. Already, we are seeing a breakdown of domestic consensus and increasing political polarisation.

This has profound effects for the strategic landscape. The US-China relationship was previously mutually beneficial and interdependent. But their relations are now shifting from engagement to strategic rivalry. Why?

The fight over data

While countries used to compete over land and capital, the fight is now over data. In this technological contest, the stakes are higher than before – because, in the digital arena, global markets are consolidated, and the “winner takes all”.

We see this contest in the race among the major powers to become the world leader in 5G networks. So, even if the US and China manage to settle their trade disputes, it will no longer be business as usual.

Because of the pervasiveness of technology, we expect a strategic contest to be waged in other arenas – defence, energy, cyber security and outer space.

Alongside the contest for technological mastery runs a contest over its governance. Whose preferred paradigm will regulate the emerging global commons such as cyberspace and outer space?

Should they be democratised, or subject to the free market, or state controlled? Discussions on cyberspace and outer-space regulations are only still in their nascent stages.

In this age, smart technologies and big data hold the keys to the future – and those with the keys will retain economic and geopolitical relevance, shaping global rules. This technological contest and its impact on the economy also disrupt the conduct of foreign policy.

So, what is a small country like Singapore to do in this brave new world we find ourselves in?

Staying relevant

A new digital revolution is upon us, and Singapore must master these new technologies if we are to stay relevant. To stay close to the cutting edge, we must hold true to the “first principles” of our foreign policy.

In a word, it has always boiled down to “relevance”.

In a lecture delivered in 2009, (founding prime minister) Lee Kuan Yew said: “Singapore cannot take its relevance for granted. Small countries perform no vital or irreplaceable functions in the international system. Singapore has to continually reconstruct itself and keep its relevance to the world and to create political and economic space.”

These words still ring true today.

First, we must remain open to the world, and continue to engage all major powers in a disciplined and principled way, remaining helpful, reliable and neutral.

Building walls to shelter our population from change is not an option. We must actively create the conditions that will attract others to keep coming.

We will continue to strengthen our air, sea and digital connectivity, and entrench Singapore’s hub status in new communications routes such as the new Maritime Silk Road – the submarine cables that transmit data.

We must also strengthen our “convening power”, not only for meetings like the US-North Korea Summit last year, but also for assembling multicultural teams to build new technologies. We do not wish to be compelled to choose sides in this technological contest. Singapore remains convinced that synergies will be more powerful when we cooperate to create common rather than competing platforms.

Second, Singapore will continue to fortify the rules-based international order and contribute actively to shaping new norms to govern the global commons.

Our position on cyberspace and outer-space regulation is unequivocal – all must be involved in shaping the new rules, and the concerns of small states must be taken on board. Singapore will continue to send our best people to these expert group negotiations to make a positive contribution.

Third, we must continue diversifying our partnerships to capitalise on new opportunities – many of which are right on our doorstep.

Our region is young, dynamic, and there is a rising middle class. There is boundless potential. We can create new partnerships by building thicker and deeper linkages across Asean.

We took a first step in this direction with the establishment of the Asean Smart Cities Network under our Asean chairmanship last year. It was very well received by our neighbours; 26 pilot cities developed action plans from 2018 until 2025, while several project partnerships were launched.

In future, the development of technology will not be driven top-down by state institutions, but by a trilateral collaboration between the state, the private sector and consumers. So I was very proud that Asean took a step towards harnessing that productive dynamic.

Disruption brings challenges, but also many opportunities. Singapore will never be a global superpower. But we must master technology if we are to remain successful and preserve our independence to make decisions based on our own sovereign interests.

The sweet spot

We can remain in a sweet spot by playing our cards right, just as we have for the last five decades. We did this in the 1960s when we industrialised and caught the off-shoring wave.

In the 1970s, we bet on the right horse by doubling down on logistics management with our container port and airport. We then moved on to electronics in the 1980s and life science later. We can do it again with big data and smart technology.

For Singapore to be successful, all Singaporeans need to be fully prepared to collectively face this age of disruption. This is why economic restructuring is a key priority for the Singapore Government.

The Government is committed to improving our education system and upskilling schemes such as SkillsFuture.

We will also make appropriate adjustments to our social security system to give Singaporeans confidence to navigate these disruptive times.

Since independence, we have relied on our people’s ingenuity and tenacity to survive. The times we live in require us to double down on these qualities. The Government will do its best to prepare Singaporeans, even as we explore new markets, build creative partnerships and facilitate businesses. Companies and individuals now need to be entrepreneurial and adventurous, seize new opportunities and remain resilient.

If we do not ride the technology wave, we will sink under it. But, if we succeed, we can navigate safely through our current Gilded Age into a new Golden Age.

 

This piece was first published in The Straits Times on 1 February 2019.
Dr Vivian Balakrishnan is the Minister for Foreign Affairs. The transcript of the dialogue and question-and-answer session with Dr Balakrishnan at IPS’ Singapore Perspectives 2019: Singapore.World can be found here.

Photo by Jacky Ho, for the Institute of Policy Studies, NUS.