Alibaba Cloud Summit [Infinity 2018]

Opening Address By Minister Vivian Balakrishnan, at the Alibaba Cloud Summit (Infinity 2018)

Good morning, everyone. A warm welcome to Singapore.

I understand that this is the first large-scale summit for Alibaba Cloud, and we are glad you are having it in Singapore. I am also glad to welcome Alibaba Cloud operations to Singapore.

Let me start with a story. We are now on Sentosa island. When you are not stuck in the conference and you go out to the beach and look South, if you look carefully, you would be able to see some oil tanks. You will see Pulau Brani, refineries, and tanks. The story I wanted to share is that in 1973, there was an oil embargo. This affected oil supplies all over the world. One of the key decisions that Mr Lee Kuan Yew, our first Prime Minister made, was to call in all the bosses of all the oil majors and said, “Look out there and you will see all the tanks. In fact, there is enough oil in there for two years of Singapore’s supply. But right now, because of the oil embargo and I know that there is a shortage of oil all over the world, we are not going to touch a single drop of oil in those oil tanks that belong to the multinational oil majors.” “And if we need anything,” Mr Lee said, “We will buy it from you at the full market price. And if you have to exercise restrictions on supply, Singapore will also be subject to the same restrictions that you will apply all over the world.”

If you stop to think about that: in the midst of the crisis, to make this assurance to the CEOs who sit on huge supplies out there, within sight - this was about confidence. This was why, over the years the oil majors have continued to invest big sums of money into Singapore. Although we do not have a drop of oil and we are not a major market in our own right. It is about confidence, reliability, trust, and integrity.

Fast forward to what’s been happening in the IT space. We all know that the transistor was first discovered and invented in Silicon Valley in the late 1940s. By the 1950s and 1960s, computers were invented. In the 1970s, you had mainframes. By the late 1970s and early 1980s, we had the advent of personal computers. For those of you old enough, you would remember your first Apple II Plus or IBM PCs. But these were standalone computing units. And Microsoft’s initial vision was a computer on every desk.

But the mainframes and the personal computers led to a new situation where today computing is pervasive. And in fact, the price of computation is trending down to zero, it has been commoditised.

And then the next wave was really about connectivity and broadband, and especially mobile connectivity – the iconic item in everyone’s pocket, of course, is the smart phone. And what that meant was that everyone and every machine was always on and always connected. Now you add up these two trends - pervasive computing and ubiquitous connectivity - and the fact that the price of computing and connectivity have trended towards zero, it is these two trends that have led to cloud computing. We were discussing earlier, in fact, Alibaba has been a bit late into the game. I know that Alibaba Cloud started in 2009, but it only came out of China and into the global international stage in 2015. And here we are in August 2018, to welcome your global operations for cloud in Singapore.

I want to share one other story. Twelve years ago I met Eric Schmidt, who was the Chairman of Google. He came to Singapore to look around. They were at that time deciding whether or not Google would have their data centre in Singapore. I remember the conversation I had with him. We both decided that it was not a good idea. Why? Electricity is not subsidised in Singapore; land and labour is expensive in Singapore. I told him, maybe you can go to Iceland, dig a deep hole to harvest geothermal energy, and for cooling you would just open the windows and it is cold. It does not make sense in Singapore where electricity, cooling cost and land costs are expensive. I thought that was the end of that.

Fast forward to today: not only is Alibaba Cloud in Singapore, all the “Internet majors”, Google, Amazon, Microsoft, Facebook - everyone has got data centres here. And why I am so happy to have been wrong twelve years ago, is because in fact, this is a repetition of the oil story. All the “Internet majors” have to be in Singapore. Because of confidence, trust, reliability, and neutrality. You see, data is the new oil. And that ability to be an honest, reliable, neutral, and safe pair of hands, is just as important as it was 50 years ago for oil, as it is now for the next 50 - the next century - for data. So I am here to say welcome to Alibaba, and to say you have made the right choice.

We all understand data centres and cloud, and you would also take my earlier point that computing and connectivity are commoditised. If you were simply a telco today, your revenues, your margins would fall. The real value today is in the ability to derive insights, artificial intelligence, robotics, big data analytics, and deep learning. That is where the real margins are. It is not about electricity, hardware and providing data centres although data centres are important. My point is that what we are trying to do, is to transform Singapore now that we are on the cusp of a new revolution.

In the last industrial revolution, it was about land, capital, energy, and labour. We have now fast forwarded to what some people call, ‘the fourth industrial revolution’. We are in a new age when everything that we do, the way we live, work, play, organise ourselves, mobilise our societies, is going to be transformed. And just as in the last industrial revolution, and here I will make a political point, why are we speaking English today, and not Mandarin? The reason is because the last industrial revolution began in England and in Europe. And unfortunately, China missed the early phase of the industrial revolution. The point is, when you are in the early phase of a revolution, the countries and the tycoons who master the technology first, get an enormous advantage, get a huge head start, and that head start is translated into economic, ultimately strategic, military and cultural power.

If you believe that we are in another new technological revolution, is it a wonder that you are facing apparently increased inequality, job insecurity, and that the big names now are names like Jack Ma, Bill Gates, Zuckerberg, Page and Brin? They are simply the new vanguard of a new industrial revolution. Now, the challenge for Governments all over the world is that if you really want to create jobs, and you really want to reduce inequality and expand opportunities, the real challenge is to commoditise the new skills. For instance, in the old days, even before the industrial revolution, all you needed to do was learn, read, write and count. Today, everyone assumes that we can type, use a word processor. Some people can even use a spreadsheet. But we are now in an age where I believe every one of us has to be able to do some analytics. In fact, I was joking yesterday to my civil servants, that I may need to make Python the second or third language within the civil service. And I may need to make it standard, core curriculum for everyone; I can throw you a data set, show me what insights you can glean from there.

Smart Nation, from the point of view of Singapore, is really just a continuation of our earlier story under Mr Lee Kuan Yew. We moved from third world to first by investing in top class infrastructure, by having a disciplined, hardworking and educated workforce and by maintaining a Government that was open, honest, competent and reliable.

Fast forward to the digital age, what we are trying to do now is to make sure that the economy in Singapore remains vibrant, competitive and is able to generate new job opportunities. Second, that we would have an inclusive society in Singapore where everyone is digitally literate, able to tap and ride on this revolution. And third, government services have to be as responsive, as immediate, and as integrated and complete as what people are used to on the Internet. In fact, when people go on the Internet, they go online shopping or even real world shopping. If that experience is so augmented and so optimised, people will turn around and say, “Why can’t Government do the same?”.

What you are seeing in Singapore now is that we are focused first on transforming ourselves internally. If we say services have to be integrated and citizen-centric, we have to deliver services that way. I will give you an example. We have this central repository called MyInfo, because people hate filling up forms, and repeatedly filling up the same data. And we say, well, if you fill it up once with the Government, regardless of which agency you go to in future, it should be there for you. Of course, we have to take care of security. And that’s an ongoing challenge. The next point is that if you have such a facility, why should it only be confined to the Government? Banks also need similar, verifiable, accurate information. And that is why we have extended MyInfo to the banks.

Another example is that we used to deliver services by ministry, by agencies. But people do not want to do it that way. People say, look, I am a human being, I am born, I get married, I have kids, I work, and ultimately, all of us will have to pass away. And at every stage of that journey, there are many different transactions, with many agencies. And that is why we launched this app called Moments of Life, where instead of you having to look for the relevant agencies, we will provide, integrate and synergise all those services for you.

The larger point I am trying to make is that you cannot really get to a new digital age, and increase jobs and reduce inequality, unless you upgrade the software. I do not mean software in your data centre; I mean software in all of us. And that is why we have been focusing on SkillsFuture. That is why we are focusing on teaching even kids in school to code. That is why we have got hackathons, and that is why I am talking about making Python and data analytics core curriculum within the civil service.

And it has to start from the top. Fortunately, for us in Singapore, it is easy, because our Prime Minister is a Mathematician and a coder. If you do not believe me, you can check his C code. And you can see, it is not just the programming, but the concept – his approach to solving problems is elegant. For me to hold this job, I have got to be able to translate the Prime Minister’s programme, so I convert his programme, solve Sudoku into JavaScript, just to prove to him that I may not have your elegant algorithm, but I can convert it to another language. My point is this, for anyone of you trying to pitch to us, you cannot fool our Prime Minister, and you will find me quite a tough task master, because I know what can and what cannot be done.

Similarly, it also means our government procurement also needs to improve, and needs to be more responsive, more flexible and more fit for purpose. It also means that the old way in which Government used to develop monolithic computer systems, to deliver a full system in the old days would take you five, six or seven years. You spend two years doing what they used to call “structured analysis”, translate that into a document, and then it would take several more iterations before the programmers actually code. By the time the programme is ready, it is obsolete.

No internet company does it this way – you have got agile development and new tools. And government needs to be able to tap on the same tools that the private sector does, in order to roll out our own apps and systems, and you will see more of that. The other point is that we also know that government does not have a monopoly of wisdom. So all that we do in the future, we will work with the private and people sectors to do. What we really want is a society in which citizens and our stakeholders are not passive recipients or just complainers, but in fact, have an opportunity to participate, to solve, to be part of the solution. And if your solution works, we will happily buy it from you. In fact, I think that is a better way to create an ecosystem that has market discipline, that is technologically advanced. It is better for me to buy services from you than to just give you grants, and then hope you produce something which the market may or may not need. So, watch this space, you will see more of that.

The other thing that we are doing more of is to look at cross-border possibilities. That is why, for instance, we launched the ASEAN Smart Cities Network, and Alibaba and the others would know that this is an opportunity for the private sector to also be familiar with what opportunities are opening up across ASEAN.

The other point I want to emphasise is that I do not believe, within ASEAN or even on a global level, that there will be a monolithic system imposed on all countries from above. I think there will always be sensitivities about sovereignty, about rules and regulations. I think the key is to ensure that the systems in different countries are interoperable. And whether it is trade, financing, customs, single windows, or whether it is e-payment systems, I do not believe there will be one single system. I believe there will be a collection of interoperable systems, which will still operate within national boundaries, still subject to rules and regulations, but where the real value is in the ability to work across borders. And the purpose of working across borders is not just free trade for its own sake, but to ensure that whether you are a farmer, a hawker or a small retailer, wherever you are in the world, you have got access to the larger market. This is something which I think Alibaba is also very focused on, and I want to commend you for that.

The point is to look across borders, and to bring barriers down, bring transaction costs down, so that the real producers – the farmers, the artists, the handicraft makers, the small and medium enterprises – really are able to tap into the opportunities this new revolution brings.

Let me just end by making this point. It is actually not about technology; it is not about hardware; it is not even about the operating systems and the software operating in your data centres. The key to success in the future is the ability to create an open system, where smart, talented, hardworking, enterprising people are able to form multi-disciplinary, multi-national teams, to work in a safe, secure, interesting, exciting and vibrant area. That is how real value is created for the future. And if all of us in this room can do this, that is how we will really harvest the fruits of the next revolution.

It is a very exciting time to be alive, because most generations do not get to live through a revolution. You do not need to be around for 102 years to witness, participate and harvest the fruits of this revolution. Even within two, three, or five years, we can see the difference with our own eyes. So let me again welcome Alibaba Cloud to Singapore. We will treat you just as well as we treated the “Oil Majors” of 50 years ago. Now that we are moving into a new digital age, I think the sky is the limit.

Thank you all very much.

Dr Vivian Balakrishnan
Minister-In-Charge Of The Smart Nation Initiative