Opening Speech by Dr Vivian Balakrishnan, Minister for Foreign Affairs and Minister-In-Charge of the Smart Nation Initiative at Smart Nation Innovations / Innovfest UnBound

Opening Speech by Dr Vivian Balakrishnan, Minister for Foreign Affairs and Minister-In-Charge of the Smart Nation Initiative at Smart Nation Innovations / Innovfest UnBound at Marina Bay Sands Expo and Convention Centre, 17 May 2016, 10:00am

Prof Tan Chorh Chuan, President NUS,

Dr Yossi Vardi, Co-Chair of Innovfest Unbound,

Mr Daniel Seal, Founder and CEO of Unbound Media,

Dr Lily Chan, CEO NUS Enterprise,

Friends, ladies and gentlemen.

Good morning,

1. If you look around the world today, what you often feel is a deep sense of gloom. You read about terrorism, armed conflicts, slow rates of growth, unemployment amongst young people in many parts of the world. This is not a rally speech, but you do see populist politicians on both the right and the left wing making siren calls, saying look; “it is doom and gloom – the middle class are gutted, salaries are stagnating, globalisation and technology are not helping the vast majority of people.”

2. I would like to submit that what is going on is not due to a right-wing political conspiracy. The answer does not lie in left-wing socialism in its extreme form. Neither does it lie in right-wing isolation. Trying to cut yourself off from competition and new technology won’t work either. The reality is that we are living through a technological revolution.

3. Let me give you a few examples. A couple of weeks ago, AlphaGo defeated Lee Sedol who is the world champion Go player. We also know that Go – the game – is deceptively simple but far more complex than chess, and the old ‘brute force’ algorithms would fail simply because there are too many permutations. But AlphaGo, based on an algorithm which tries to emulate the pattern recognition of human beings to some extent, defeated Go’s best human player. I have heard there is now a Chinese version that is trying to organise a game against AlphaGo by the end of the year.

4. The point here is that artificial intelligence (AI) is improving and I think - unlike the earlier promises made 30 years ago - this time, it’s for real. And it pervades diverse fields. Take a look at what the financial institutions are doing, leveraging on more engaging and captivating interfaces. Brokers and remisiers used to make a good living. Today, more and more people just trade online. But that is not all, today more and more intelligence is available through online portals and in fact; customers would probably move on to the companies and financial institutions which provide - not just financial information - but allows for pattern recognition, letting you trade quickly, faster, smarter – to catch trends before everyone else does because those few microseconds make all the difference between profit and loss.

5. Microsoft recently came up with a chatbot which was supposed to be able to interact with and respond to human beings. Microsoft had to take it down because it basically became too rude, racist and hurled profanities, but if you actually stopped to think about it; that bot actually probably passed the Turing Test because it behaved exactly like a human being in an argument. This is another example where there is a revolution in the recognition capabilities, speed and the emulation of human beings in AI.

6. Robotics is an exploding field. We think there will be about 35 million units of service robots that will be sold over the next 2 – 3 years to provide personal and professional services. Of course, there are people who worry that a combination of ever-improving AI connected to robots may create a Skynet scenario – those of you who watched The Terminator will know - that if you connected enough AI, perhaps at some point it will derive consciousness and decide that human beings are a problem and resort to a final solution. Well, that is one fear but even if you have that fear, the answer does not lie in retreating from technology. In fact, it is far better that those of us who do have the morals and ethics and a humanist worldview to master these technologies - rather than someone else who may use it for purely commercial or political aims.

7. Let me go to another field, Virtual and Augmented Reality (VR and AR). The Prime Minister and I visited Facebook two months ago and Mark Zuckerberg was proudly showing the Oculus Rift VR headset – and it’s pretty good. They have improved it so you don’t get seasick anymore and the gameplay is more interesting. But I told Mark that actually, the real killer app for VR is not games – it’s actually virtual sex. Mark looked at me quizzically: “You mean porn?” I said “No, but stop to think about it - in fact it is the porn industry that probably first led to internet commerce on a big scale”. If you were to think about AR and virtual sex from a medical point of view – it’s going to be safe sex as well! There is actually an important message behind this; if you can successfully master virtual sex in AR, you would have devised the ultimate user experience (UX). So VR and AR is another area that is exploding.

8. Just add these three things, AI, Robotics and Virtual and Augmented Reality; there is something huge going on in our world right now. These technologies don’t exist on their own, but build upon a platform of key elements which are cheap computing power, pervasive connectivity and access to a tsunami of data.

9. Computing power is certainly cheap and connectivity is almost free, especially in Singapore. But how do we deal with the tsunami of data? Someone mentioned an example to me earlier where one could swallow a pill which generates millions of images of the insides of our gut. The real genius is not so much about acquiring millions of images, but the ability to analyse them; and it has to do it better, faster and more accurately than a human being. So with these points in mind, I thought I would share with you what the Singapore government is trying to do to make sure that we, as a country, a nation and our citizens can take full advantage of the digital revolution.

10. Firstly, we are trying to build the best digital infrastructure in the world. A crucial piece of this is connectivity and that is why for the past few years we have been rolling out fibre connectivity to every home. In fact, if you were to look at the optical network terminal in your home, there isn’t just one but two fibres for redundancy, and also to make sure that bandwidth will never be a limiting factor in Singapore.

11. I have told IDA that in the next five years, I want them to create a national operating system for 100 million smart objects. Stop to think about that, 100 million smart objects just in Singapore alone. Now what constitutes these 100 million smart objects?

12. First of all, there are 5 million human beings, almost every one of whom is carrying a smartphone, leaking data, acquiring data with sensors built it. Every traffic light and lamp post is another smart object. Every sensor, camera and surface both acquiring data and ultimately analysing the data to create actionable insights and applications. A 100 million smart objects is a big enough number to provide a challenge; but because it is going to be applied in a small, focal place called Singapore and because it will be (I hope) an open platform, it will create a huge range of opportunities for application developers, service providers, companies and enterprises to leverage off. This is a worthwhile challenge and something Singapore is well-placed to do.

13. Another thing that I have raised is the key challenge of security and a key sub-topic in security is identity. How do you prove you are who you are? It might be easier when we have face to face conversations but when we are interacting through screens or the internet, how do you know and trust the person on the other end of that transaction. The IDA has partly solved this by bolstering our Singpass system with 2-Factor Authentication but that is only the beginning. I believe we need some form of public key infrastructure (PKI) linked to our Singpass identities in order to give non-repudiation, security and end-to-end encryption. We need to build that web of trust in order for transactions to take place.

14. As another example, people talk about electronic medical records. We actually have a lot of medical records, but the reason we cannot make it all available immediately is because of security. How do I know that only you and your doctors will access your data and not an angry ex-spouse who is looking for dirt to use in divorce proceedings? In fact, the whole field of cybersecurity is an immense field that is ripe for harvesting.

15. The second thing we are doing now as a government is to stimulate research and development. The Research, Innovation and Enterprise 2020 (RIE2020) plan that sets aside $19 billion dollars is not just for research work, but for translating this research into applications in real life. We are interested in applications of research to real life to improve the quality of life and to enhance economic opportunities and provide good jobs for our people. The national robotics programme has been beefed up, and we have set aside $450 million to help our industry adopt potentially transformative automation and robotics.

16. The third area we are focusing on is making government a smart buyer. Government and, by proxy, people have needs which can be addressed. We want to move to a demand driven model. So for instance if I say – well traffic congestion is an issue, green energy is an issue, security of transactions is an issue; these are needs of government and the people. We will turn around to the private sector and say, “Well guys do you have a solution for water, green energy and security? If your solution works, we will buy it from you but before that - we will give you the opportunity to build proofs-of-concept and prototypes. If it works, we can buy it from you.”

17. That is, in my view, a better approach than simply giving money and grants on the supply side. We will focus on the demand side of the equation. So if any one of you has an idea, a product or service which makes lives better for citizens, come to Singapore prove it, test it, prototype it and upscale it. Ultimately, because we are smart buyers, this provides your companies opportunities to go to the rest of the world and say ‘this product worked in Singapore’, and you know that this means something.

18. The fourth thing we are doing is focusing on education. The Ministry of Education will be offering computing as an ‘O’ Level subject in 19 secondary schools starting next year and we hope to roll this out across the board. It is not that every single person needs to be able to code, but at least understand computational thinking, what the possibilities are and how best to become masters and creators of AI and robotics; rather than being the losing competitors to the AI and robots of the future. Education is a key element of our strategy.

19. Finally, we need to get rules right. They used to joke that Singapore is a fine city. We enforce rules very strictly. In fact, what we need to have is a revolution in our policy and regulatory frameworks. What do I mean by this? Let me give you an example. We all know about self-driving vehicles; I have taken a ride in a Google car and a car in Singapore which in fact took A*STAR I2R 9 months to build. This means that the technology is already available. The real challenge now is getting the licensing, insurances and regulations right; and it is not so easy to do that. Someone will ask ‘What if a self-driving vehicle has an accident?’ and my answer is that ‘One cannot expect a self-driving vehicle to be perfect, but we do want it to be safer than a human driver.’ and what that means is that you have got to ensure that your road traffic legislation, regulatory regimes and licenses all allow for the new technology to be applied. At One-North, we have set aside 6km of public road where you’re going to have to deal with self-driving vehicles. We hope to overcome the licensing and insurance issues so those that these vehicles would be truly driverless. And in fact NUS should do so within your own campus for the shuttle bus, it cannot be more complicated than One-North. So, Chorh Chuan, that is something you need to follow up on.

20. On the financial side, there has been a lot of hype about Bitcoin; distributed ledger systems which do not depend on central authority. I don’t know whether Bitcoin will work. I do believe blockchain technology is something profound - but my Prime Minister has told me: ‘Well, I think this is a solution looking for a problem’, meaning that we don’t know yet what will or won’t work. But because we believe that Singapore’s future does depend on us continuing to be a global financial centre, the Monetary Authority of Singapore (MAS) has decided that we will create a “regulatory sandbox” for financial institutions and Fintech companies that creates a safe and conducive space for innovation, within which the consequences of failure can be contained. You will not be smothered by regulations; until you become big enough to actually be a threat to the financial system but at that point you would already be considered a success. What this means is that if any of you have an idea, product or service in financial industries - you can work with MAS to launch your product in the sandbox within controlled boundaries. This gives you opportunities to start-up, experiment and grow as quickly as you can.

21. Basically, what I’m trying to outline here is that we view the role of government as building infrastructure, enhancing capability, focusing on R&D, policy innovation and building a conducive environment so that our start-ups, or people with crazy ideas can pursue those moon-shots.

22. The National Research Foundation (NRF) will be embarking on a scheme which will encourage Large Local Enterprises (LLEs) to scan the horizon, identify small start-ups which may have novel, potentially transformative ideas in your industry. The NRF will provide funding of $40 million dollars to support these partnerships between LLEs and start-up companies. The key message is that we are trying to encourage our own big industry players to partner our local start-ups and it will be win-win for both.

23. Another announcement I am glad to be able to make is that NUS Enterprise, together with its partners, have developed TECH.SG which is basically a platform to connect founders, investors, incubators and technology sources. Ideas, people and smart money can be connected. What this also does is to take research out of academia quickly and into the marketplace, accelerates options and opens opportunities for start-up entrepreneurs, connecting them quickly to the larger ecosystem. I believe these platforms will provide rich opportunities for many of you here today.

24. Finally, I want to end by making this point. I started off by saying the world is going through a tough time. There is gloom and doom in many parts of the world. There seems to be a lack of opportunities and anxieties about fairness - but the real diagnosis is that we are living through a digital revolution. This revolution will give huge opportunities to the people who get it and who understand it early.

25. What we are trying to do in Singapore is create the most conducive environment for people who get it, to be able to build it so that - in the future - people will come to Singapore and they will say ‘I have seen the future, and it works!’

26. Welcome to a wonderful future. It is a privilege to be alive and to have a ringside seat to the revolution of our lifetimes. Thank you very much.