While Asia’s economic prospects are promising, its growth is not foreordained. The young and middle-class demographic in many Asian countries must pick up the right skills to ride the digital revolution, says Deputy Prime Minister Heng Swee Keat.

Speaking at the 24th Credit Suisse Asian Investment Conference, DPM Heng highlighted how the region is anchored by sound fundamentals and favourable demographics. 

“In countries like India, Indonesia and Vietnam, more than half the population is under the age of 35. We also have one of the fastest-growing middle classes, which will boost consumption and drive demand for many sectors,” says DPM Heng, who is also Coordinating Minister for Economic Policies and Minister for Finance. 

By 2030, two-thirds of the global middle class is expected to be in Asia, he adds. 

Southeast Asia alone is home to 400 million internet users and a rapidly growing digital economy. However, Asia's growth is "not foreordained", warns DPM Heng. “The demographic could turn into a lost generation if we’re not able to equip our youth with the right skills and create enough good jobs to ride the structural shifts.”

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Without adequate improvements and investments, the region’s economy will not achieve its full potential, he adds, and could remain susceptible to future pandemics and catastrophes.

DPM Heng called on regional leaders to work together to harmonise standards, allow trusted data flows and facilitate cross-border transactions.

One such collaboration will begin in the coming months. From the middle of this year, users in Singapore and Thailand can send money to each other through their mobile phone numbers, following a link-up of both countries’ national e-payments systems, says DPM Heng. 

“Singapore is keen to build similar linkages with other partners in the region,” he adds. 

A gateway for investment

DPM Heng also put forth Singapore as a launchpad for innovation in Asia. To expand Singapore’s capacity for innovation, the government is investing US$19 billion dollars in research, innovation and enterprise over the next five years.

Previously announced in December 2020, the five-year blueprint will focus on four areas: health, sustainability, the digital economy and manufacturing. One-third of the budget will go towards basic research.

See also: Singapore growing ‘green node’ for Asia’s sustainability efforts: DPM Heng

One of the most recognisable names is Sea Group, awarded a digital full bank licence last December. Headquartered in Singapore but listed on the New York Stock Exchange with a current market capitalisation of US$109.43 billion, the Internet giant’s e-commerce platform is now the most popular name in Indonesia and Vietnam, says DPM Heng.

The venture capital sector here is also growing, notes DPM Heng. “In 2019, more than US$7 billion in venture capital deals were closed, a 30-fold increase in under a decade.”

“I encourage more companies to undertake your research and innovation work here, and to invest in our start-ups and build deep capabilities.” 

Singapore also welcomes more institutional investors and family offices to grow their presence here. “Assets under management in Singapore doubled over the last decade, to around US$3 trillion in 2019. Close to 60% of this capital is from Asia, and about two-thirds is invested in Asia,” says DPM Heng.