By: Janessa Kong, Senior Policy Analyst at Singapore Institute of International Affairs
Singapore boasts one of the fastest-growing digital economies in the region. With a compound annual growth rate (CAGR) of 12.9% since 2017, its digital economy has outpaced the overall economy, buoyed by high levels of internet and mobile penetration, as well as mature digital infrastructure and connectivity. The Information and Communications (ICT) sector’s robust growth is largely driven by high demand for games, online services, and a flourishing e-commerce market.
Recognising that the digital economy spans various sectors, the government has adopted a ‘whole-of-government’ approach to digital transformation involving multiple ministries, agencies, and offices. The Smart Nation Initiative, introduced in 2014, outlines three pillars—Digital Economy, Digital Government, and Digital Society—to drive this transformation. The initiative is overseen by the Smart Nation and Digital Government Group (SNDGG) under the Prime Minister’s Office (PMO), which sets policy direction and coordinates ministries’ activities.
Another critical regulator is the Ministry of Communications and Information (MCI), which oversees digital economy policy, including areas like digital resilience, readiness, inclusion, security, infrastructure, information policy strategy, media development, and public communication. The Infocomm Media Development Authority (IMDA), a statutory board under MCI, plays a key role in regulating and developing the infocomm and media sectors.
Evolving Tech Governance in Singapore
Similar to its neighbors, Singapore’s approach to tech regulation has evolved over the years. The TFGI report on the ‘Evolution of Tech Regulation in the Digital Economy’ broadly outlines some of these trends observed across SEA-6 countries – including the expansion of regulatory roles and the establishment of regulators with fresh mandates, among others.
These trends are consistent in Singapore, with the most recent and notable change being the renaming of the MCI to the Ministry of Digital Development and Information (MDDI) from July 2024 onwards to reflect its broader digital remit. This change indicates a deliberate effort by the government to develop a consistent national digital strategy and underscores the importance of the country’s digital agenda. This move follows the merger of SNDGG with the digital development functions of MCI to form an enlarged Smart Nation group in October 2023.
New government bodies have also been established to address specific areas of the digital economy deserving greater focus. The Digital Industry Singapore (DISG) office was created in 2019 to serve as an interface for the industry with the government, aiming to assist companies in digitising and participating in the digital economy. In the same year, the Home Team Science and Technology Agency (HTX) was established to bolster Home Team capabilities in scientific research and technology and to develop a coordinated response to security threats.
Singapore’s Approach: Pragmatic and Forward-looking
Over the last few years, Singapore’s approach to tech regulation has been distinguished by one that is pragmatic yet consistently forward-looking. This approach is crucial in ensuring Singapore’s relevance in the international arena and its goals of becoming a “Global-Asia node for technology, innovation, and enterprise”. Fundamentally, this approach considers the need for regulation to keep pace with technological development and requires continuous pathfinding in emerging areas.
Refreshing laws, frameworks and policies
While regulations surrounding consumer protection, data, and security are already in place, the government has consistently reviewed and made amendments to some of these laws to ensure their continued relevance. The reasons behind these changes vary, and many are responses to the rapidly evolving tech environment and its applications. In 2022, the government amended the Personal Data Protection Act (2013) to enhance the power of the commission and increase the financial penalty cap on organisations. Most recently, it has amended the Cybersecurity Act (2018) to grant regulators greater oversight over computer systems deemed critical to the nation and impose reporting requirements on Critical Information Infrastructure (CII) operators for a wider range of cyberattacks.
Pathfinding in Emerging Areas: Artificial Intelligence (AI) and Sustainability
Simultaneously, the government is exploring new frameworks and norms in emerging areas. The rise of artificial intelligence (AI) has become a key policy priority due to its far-reaching effects. The government actively considers how best to encourage innovation while mitigating economic, social, and security risks. In recent years, it has committed substantial funding to boost its AI capabilities, launching its second National AI Strategy (NAIS 2.0) and developing AI governance standards and frameworks in collaboration with partners, including the Model AI Governance Framework and AI Verify.
Recognising the interplay between sustainability goals and digital economic growth, Singapore has committed to ‘digital sustainability’, a two-pronged strategy leveraging technology to achieve sustainability goals while mitigating the carbon footprint of the digital economy. Many recent initiatives have focused on greening data centers (DCs), given their importance in powering the digital economy and their significant carbon footprint. Since the conclusion of a moratorium on new DCs in 2022, the government has actively promoted green DCs as the industry norm. This includes sustainability best practices as evaluation criteria for new and existing DCs, and the introduction of sustainability standards and frameworks for the industry, including the Green Data Centre Roadmap launched in May 2024.
Future Challenges and Recommendations
Intergovernmental coordination will become increasingly challenging as regulators need to develop new capabilities in response to emerging solutions and applications across sectors. While MDDI currently oversees digital economy policy horizontally, there are verticals within each sector that are technically complex and require domain expertise. Given the current organisation of ministries, it may be challenging for regulators to develop ‘T-shaped capabilities,’ which are crucial for directing digital transformation strategically in each sector.
To enhance digital expertise and capabilities within each ministry, the government could consider establishing dedicated agencies or offices under each ministry to analyse the implications of digital transformation sector-wide. This approach has been explored with the creation of HTX, a statutory board under MHA utilising science and technology to address critical threats facing Home Team departments.
This effort could be complemented by establishing a strategic-level coordination body to facilitate cross-ministry collaboration. One potential solution could involve creating a Working Group/Body at the PMO level to assist MDDI/SNGDO in executing policy across government bodies. For instance, the Republic of Korea has established a ‘Working Committee for the Promotion of Vitalisation of ICT,’ comprising sub-committee members from all government levels, the private sector, industry, and academia. In Singapore, the Monetary Authority of Singapore (MAS) has explored a similar mechanism with the Singapore Funds Industry Group (SFIG) in 2021, a partnership with the private sector which aims to develop strategies to strengthen Singapore’s Fund Management Ecosystem. This could set a precedent for establishing a similar framework for the digital economy, fostering greater coherence in digital policy strategy.
Amidst the trend towards securitising the digital economy and its policies, Singapore will continue to face external pressures to pursue models of digital leadership that challenge principles of openness and inclusion. Both the US and China have sought technological leadership through various means, making decisive efforts to exclude and constrain each other. The US’ recent reversal of its longstanding policy stance on digital trade has contributed to greater uncertainty in digital trade rules and reflects a shift in priorities vis-à-vis its partners, including Singapore, Japan, Australia, and New Zealand.
While Singapore has endeavoured to establish comprehensive rules for the digital economy with like-minded partners through the Digital Economy Partnership Agreement (DEPA) and Digital Economy Agreements (DEAs), ASEAN will remain crucial for Singapore in promoting an open and inclusive regional architecture. Member states have reiterated their commitment to developing a rules-based approach to cooperation in the digital ecosystem, with ongoing efforts to establish consensus on common areas of focus.
Recent notable examples include the launch of ASEAN Digital Economy Framework Agreement (DEFA) negotiations, aiming to develop binding rules for nine key areas of the digital economy, the establishment of ASEAN Regional Computer Emergency Response Team (CERT) to enhance regional cybersecurity cooperation, and the endorsement of ASEAN Guide on AI Governance and Ethics, providing best practices for implementing trustworthy AI in ASEAN. The latter two initiatives were announced at the 2024 ASEAN Digital Ministers’ Meeting (ADGMin) in Singapore.
As ASEAN continues developing its own digital rules and standards, Singapore is well-positioned to lead and support regional efforts. The government can showcase successful models of collaboration with the private sector in developing frameworks for emerging areas like AI and Sustainability, and scale up domestic projects and solutions to increase their relevance across the region. For instance, MAS and the Bank for International Settlements (BIS) embarked on ‘Project NEXUS’ in 2021 to enhance cross-border real-time payment connectivity between countries. Following a successful prototype involving Singapore, Malaysia, and the Eurosystem, the project has expanded to include more partners in the region, and is moving towards live implementation.
Conclusion
Singapore’s whole-of-government model for developing tech regulation has generally been successful in helping the country navigate opportunities and challenges in the digital economy. Characterised by a pragmatic and forward-looking approach, the government has adopted a policy paradigm which enables innovation and is flexible to accommodate changes when necessary.
While this approach has been successful thus far, upholding it will become increasingly challenging as the digital economy continues to evolve and new issues emerge. Changes in global digital leadership and the rise of new business models and solutions will introduce greater uncertainty in the external operating environment and bring about new regulatory issues that cut across several jurisdictions that require new frameworks of thinking.
Given this context, the government will need to consistently review and improve current policies and frameworks, while remaining open to challenging existing organisational structures. It must also continue its work to deepen collaboration in the region, particularly within ASEAN. Calling attention to common policy goals among member states can provide greater clarity on priorities for the region and help develop consensus on digital governance principles.
While challenging, these changes will present Singapore with new opportunities to continue pathfinding in digital governance and establishing itself as a digital leader in the region.
About the writer: Janessa is a public policy and international affairs professional who works on the ASEAN programme at the Singapore Institute of International Affairs, the country’s oldest think tank and founding member of the ASEAN Institutes of Strategic and International Studies (ASEAN-ISIS) Network of think tanks. She is responsible for conducting policy research, writing reports and engaging in conversations on ASEAN matters and its key economies of Singapore, Indonesia, Malaysia, Myanmar, Thailand and Vietnam. Her work requires her to track political and economic developments pertinent to Southeast Asia and understand how geopolitical developments affect the region.
She specialises in issues surrounding digital economy growth and integration in ASEAN and currently leads the Institute’s Digital Programme. Currently in its third phase, the programme seeks collaboration with key digital economy stakeholders to offer research and analysis on how to develop ASEAN’s digital economy amidst ongoing challenges.
The views and recommendations expressed in this article are solely of the author/s and do not necessarily reflect the views and position of the Tech for Good Institute.
