SINGAPORE (Jan 24): Back in November 2014, Prime Minister Lee Hsien Loong unveiled the Smart Nation initiative, which was intended to make use of technology to improve residents’ lives.
The initial focus was placed on five areas: open data and connectivity, research & development, living laboratory, industry and start-up ecosystem, and cybersecurity and data privacy.
With that, the government hoped to build a culture of innovation by making it easy for public and third-party developers to consume its statistical data resources. At the same time, they pledged to set aside 1% of
GDP for R&D spending, and provide the necessary resources for companies to develop and test their technological solutions.
The government also established a number of initiatives grow the start-up ecosystem like providing cheap commercial space to start-ups, and enhancing the presence of venture capitalists and other funding avenues. They also placed cybersecurity as a key government priority in recent years.
Daiwa Capital Markets’ analysts Ramakrishna Maruvada and Shane Goh believe the Smart Nation initiatives will provide opportunities for emerging technologies like driverless cars for the automotive industry, the Internet of things (IoT) for industries and homes, robotics and automation for industries like hotels and hospitals, and industries involved in cybersecurity.
Automotives
As it stands, a number of trials are currently underway. That includes the partnership between the Land Transport Authority (LTA) and Nanyang Technological University (NTU) for an autonomous bus trial in 2016, which would see driverless buses plying routes in the Jurong West area by as early as 2018.
At the same time, Britain-based automotive supplier Delphi has provided a fleet of self-driving cars to LTA for a pilot programme that will run from 2017 to 2019. A second deployment is also in the works.
“If these trials are successful, the projects could be developed into mobility solutions across Singapore, providing an expanded range of public transport options for commuters,” said Maruvada and Goh.
Internet of Things
A number of local companies, including startup company Unabiz and the local mobile operators already have plans to ride on the wave of the Internet of Things, by launching IoT networks sometime in 2017.
The first beneficiaries would likely be the industrial users, though the pair expect smart home solutions to follow suit quickly over the medium term.
Already, the government has extended its trial of smart solution devices to over 3,000 households in the Yuhua region in Singapore, an increase from the 10 households trialled in the previous 6 months. Those devices included an elderly monitoring system, and a utilities management system, and the three telcos had partnered with hardware providers Astralink and Samsung, and software providers like Intraix to offer data subscription plans to the participating households.
“While this is presently an insignificant portion of revenue for the telecom operators, the pie could grow if the initiative is extended to cover other parts of Singapore, with about 1.2 million households within the country as of end-2015,” said the duo.
Robotics
Robots appear to be the solution of labour starved industries like hospitality. Currently, there are three robots deployed at United Engineers’ 311-room Park Avenue Rochester Hotel at Buona Vista. Two of them are used in housekeeping while a third handles room service orders.
Using driverless technology and equipped with remote control through a tablet, the robots were partially funded by the Singapore Tourism Board’s (STB) Business Improvement Fund. In fact, STB is currently in talks with other hotels who may wish to adopt robotic solutions.
So what should investors buy into?
“In our view, the Smart Nation initiative essentially would enable the Singapore Government address some of its manpower challenges and would go some way to boosting overall productivity levels. Many companies and industries could benefit from streamlined cost structures,” said the pair adding that technology companies could also benefit, but few are directly investable.
Among Daiwa’s coverage of listed companies, the pair recommends SingTel which is currently taking the lead in cybersecurity.
Shares in SingTel closed 1 cent higher at $3.82 on Monday.
