One can't challenge the fact that the maritime industry is heading towards the technological revolution with Singapore as the primary node, maybe the Silicon Valley of the maritime!
Singapore, over the last decade, has transformed itself into a fast-growing technology hub evolving into one of the most preferred choices for several startups, multinational corporations, MNCs, and other technological enterprises as their headquarters.
Singapore replaced New York at the top spot in the survey conducted by KPMG last year as a potential technological innovation hub. The rapid inclusion of various technology-driven companies in Singapore will result in the acceleration of digitalization in the shipping industry.
The maritime industry is deemed to be the lifeblood of Singapore's economy with over 5000 establishments related to the sector contributing to 7% of its GDP which has now established Singapore port regulated by MPA (Maritime and Port Authority of Singapore) into the largest transshipment hub of the world.
With the maritime industry woven into Singapore's economy and strong acceptance of IT and technology-based organizations across the world, the sectors are deemed to aid each other in transforming Singapore into the Silicon Valley of the maritime industry.
Technocrats have been looking for a suitable territory in Asia and the east to expand their business for a long time now, including several US technology giants including Google, Microsoft, Facebook, Twitter, and many others. And Singapore despite its small size has turned out to be the most suitable location owing to several factors
One of the factors is its strategic geographical location being the largest transshipment hub and in close vicinity of major growth markets. Singapore also has a large diverse urban population which has led to the nation having good ties with several western countries including the US, an ideal place for companies from these countries to undertake business expansion.
The Singapore government in the past decade has come out in strong support of Singapore's development as a technology innovation hub with the execution of open economic policies, promotion of free trade agreements, rapid infrastructure building capacity, and strong protection of intellectual property rights along with a willingness to invest which has attracted companies from across the world.
The government has also not shied away from investing in start-ups by co-investing up to 85% of the capital maximum of up to $500,000 after approval. Over the years such welcoming and explorative policies have paid off by making Singapore a lucrative market for investors. The native start-ups have also flourished in the last decade like Grab, Sea, and Trax.
The US-China trade war has also played a role as companies including those of Chinese origin like Tencent, ByteDance, and Alibaba plan their regional headquarters in the city.
Lastly, Singapore which has now been a long-established global financial center serves as an economy with a strong network amongst importers, exporters, logistic firms, and banks owing to a flourishing maritime industry which is an ideal setup of an open and transparent system ideal for both tech-giants as well as startups.
Singapore aims to build a robust economy with rapid modernization across sectors for which the government is incentivizing and framing policies to attract technological enterprises.
As the maritime industry is the lifeblood of Singapore's economy employing more than 170,000 people, the priority of the Singapore government is to pace up the digitalization of the industry and plans to do so with consolidated efforts from both internal and external sources.
Singapore's transport minister Mr. Chee Hong addressed the parliament in early March where he said, “Our goal is to be the top maritime startup hub in the world, the Silicon Valley for maritime technology." He went on to announce the state's vision to bring in a massive investment of $20 billion by 2024 for technological advancement in the maritime industry.
Several programs and policies have recently been declared to attract startups and companies to change the face of the maritime industry in the country. By 2025 Singapore aims to increase the number of maritime startups from 30 to 100 under the Pier71 funding program.
The Maritime Port Authority which regulates the port of Singapore will also support the Pier71 program by contributing $10 million as MINT (Maritime Innovation and Technology) fund. Under the Pier71 scheme, startups could launch projects for technological innovation in the maritime industry for which a grant of up to SGD 50,000 will be provided for research and development, and if the innovations are found promising additional sum of SGD100,000 for execution will also be granted.
More than 12 start-ups have already been provided grants under the Pier71 scheme for this year. The start-ups include ABEJA, C-LOG, CEREKON, DRAVAM, KANDA, and TREE who shall focus on solutions inspired by technologies such as robotics, virtual reality, blockchain, digital twin, and artificial intelligence over 12 months.
Singapore as a part of its policy to create a supportive environment encourages experimentation of innovative ideas and risk-taking behavior as suggested by the statement of the transportation minister Mr. Chee Hong at the Singapore Maritime Technology Conference (SMTC), “We want to build an ecosystem that encourages experimentation and creative solutions. It is not about avoiding failure completely – it is about providing a safe space to fail.”
Further embracing the policy of encouraging creative solutions the authorities will also provide space to test the feasibility of the solutions. One such example is the space provided near Marina south where delivery to offshore vessels through drones will be tested by the company Drone Estate.
Singapore has launched the mega Tuas port project to integrate operations at Pasir Panjang, Keppel, and Brani facilities which shall add to the current capacity of Singapore port by 65 million TEUs.
The new port will be fully automated and will be equipped with driverless ground transportation and automated cranes which will double the labor productivity and simultaneously create new employment opportunities.
This project is also aligned with the idea of digitalization aiding the process of decarbonization of the shipping industry as this will reduce carbon emissions at the port by 50%.
Mr. Chee Hong didn't fail to mention the goal to integrate the maritime industry at SMTC saying, "The concept of integration will also extend beyond the port, to key sectors like advanced manufacturing, cold chain, and logistics."
The State plans to undergo integration with digital solutions like Electronic Billing of Lading (EBL's) like at Rotterdam port proposed by MPA and the development of blockchains to facilitate digitalization with enhanced cybersecurity.
One such success story is that of Tribe, Singapore's first government-backed blockchain network which has recently gained investment of more than $70 million to expand its reach. One of the prominent investors is pharmaceutical giant Pfizer, also one of the biggest vaccine suppliers in the covid-19 pandemic.
To promote small and medium-sized enterprises (MSMEs) to research and come up with sustainable solutions and product development related to cybersecurity, data analytics, and systemic engineering the government has increased the co-funding ceiling from 50% to 70%.
MPA has also agreed to grant $ 15 million from the MINT fund to promote these endeavours increasing the total sum for research to $100 million.
MPA has also signed an MOU to extend research services with the Research Council of Norway (RCN) for the 8th year. Simultaneously a digitalOCEANS project initiated by MPA with six other MOU partners is set to make significant progress in making port-to-ship connectivity operations seamless.
The overlap of the maritime industry and technological enterprises, the two most prominent sectors contributing to Singapore's economy, coexisting and aiding each other have yielded Singapore to be the Silicon Valley of the maritime industry.
The maritime industry turning Singapore into a country with a strongly interconnected network of economic stakeholders and institutions providing financial aid and protecting intellectual property rights effectively has attracted a huge magnitude of enterprises ranging from start-ups to tech giants.
Whereas the investment brought in by these companies and free economic growth opportunities provided by the government in form of incentive and support in an end to end manners from research & development to space for execution trials all assisting acceleration of digitalization of maritime industry, which has earlier largely been concentrated to the developed countries and Europe.
Singapore is set to revolutionize the maritime industry with strong support from the State's government to execute technological advancements in all sectors of the maritime industry acting as a bridge to uniformly digitalize and eventually decarbonize the industry across the globe inferring only one thing "Singapore is the Silicon Valley of the Maritime Industry."