Chia Song Hwee, Deputy CEO, Temasek International spoke at the Singapore University of Technology and Design FIRST 2022 Industry Workshop on 27 July.

Good morning, Distinguished guests,
Friends from Singapore and around the world,
Ladies and gentlemen.

Thank you to SUTD for having me here today.

The theme this year is – “Smart Technologies for Sustainability”.

It is a topic that resonates very strongly with Temasek.

I’m sure it is the same for the organisations you represent.

Over the past two years, there have been countless conversations on the pace of technological disruptions. I’m also amazed by the pace.

Collectively, we adapted quickly to tech-enabled changes caused by COVID-19. We have changed the way we live, work and consume.

Many of these changes are here to stay and will only be reinforced as Industry 4.0 speeds up.

Industry 4.0

Now, all of us are familiar with Industry 4.0.

Although technologies such as Artificial Intelligence or AI, Internet of Things, blockchain, and advanced robotics are in full swing, they are still far from their full potential.

At Temasek, one key structural trend that guides our investment direction is Digitisation. It is a trend that cuts across all sectors and industries.

So, we seek to invest in companies that are developing or deploying innovative solutions that disrupt current business models, or create new ones that would deliver significant value.

When we think about smart technologies for sustainability, there are two areas to highlight.

The first is sustainability for our business models.

And the second is sustainability for our planet.

Thoughtful Innovation

Implementing new technologies often comes with reputational risks, and potentially, the loss of trust, if companies ignore crucial aspects of ethics and governance.

We have a responsibility to stakeholders and to the wider community.

The onus is on us to better understand the impact of new technologies, and to put in place governance frameworks without hampering innovation.

We can engage in dialogue to gain perspectives and insights. We can run pilots to testbed solutions before deploying any new technology.

We need a good balance between innovation and guardrails, where guardrails are part of the design thinking and product development, not an afterthought.

However, this is rarely at the forefront of corporate agendas. Collectively, we need to change that.

Remember, our actions, or lack of actions, could attract scrutiny from regulators.

Worse, we could lose the social license to operate over time.

Workforce 4.0

Also, as Industry 4.0 picks up speed, we need to ask ourselves, “are our people ready”?

Are they being reskilled effectively?

Are students starting their careers equipped with skills needed for a digital future?

These questions are important, because it’s about long term sustainability of our business models.

At the end of the day, it is people who power technological innovations, and we cannot leave people behind.

We are encouraged to see institutions of higher learnings such as SUTD offering curriculum with multiple disciplines, incorporating not just hard skills but also innovation, entrepreneurship and design thinking.

These are skillsets that will be needed for the future.

As an investor, we are also encouraged to see many of our portfolio companies have embarked on their digital transformation journeys, embracing innovation and new technologies in the workplace.

What about us at Temasek?

We strive constantly to transform by investing in tools and skills needed to harness the potential of technology.

AI and Blockchain

Let me share two areas close to my heart.

In 2018, we identified AI and blockchain as innovative technologies that will fundamentally redefine the way we live, the way we work, and the way we do business.

We then formed two pilot groups, or pods as we call them, to explore the best way to get exposure in both areas.

It has been four years, and both pods have made significant progress.

One example is Aicadium, our centre of excellence for AI. Aicadium develops and scales AI solutions for clients across sectors. 

For example, in healthcare, Aicadium built an AI-enhanced voice-based chatbot. The chatbot allows patients to gain access to fast, specific and accurate information without long hold times or physical visits.

Aicadium is also supporting Project NovA!, a platform under the National AI Programme in Finance.

In its first use case, Project NovA! harnesses AI to help financial institutions assess emerging environmental risks and impact to their clients.

Temasek has also been actively developing capabilities in AI Ethics and Governance.

We are contributing to IMDA’s Singapore Model AI Governance Framework, and the Singapore Computing Society’s AI Ethics and Governance Certification Committee. The latter looks to promote training and certification for AI professionals.

In the blockchain space, we have been focused on venture building. One venture we have is GoodWorker.

GoodWorker is a job matching platform for semi-skilled workers in India. The platform utilises open and interoperable technologies to provide workers with a digital, verifiable profile.

Workers enjoy improved access to employment opportunities while retaining greater control of their data. Employers at the same time have full confidence in the authenticity of employment credentials.

Because AI and blockchain were relatively nascent when we started, our strategy was to first build ventures and contribute towards ecosystem development.

Through these efforts, we also expanded our in-house capabilities which then added to our investment activities and strategy.

Cybersecurity

Let’s move on to another area critical to the sustainability of the business models.  

It is cybersecurity.

With digitisation, cybersecurity is a huge challenge for governments, companies, organisations and individuals.

Here are some numbers to give perspective.

Reports show that more than 33 billion records will be stolen by cybercriminals by 2023 – that is just next year. This is a stunning increase of 175% from 2018¹.

The cost of cybercrime is also expected to grow 15 percent per year, over the next 5 years, reaching US$10.5 trillion by 2025².

Such numbers are sobering.

How should we balance the embrace of digital tools and technology, while ensuring that the data belonging to us and our customers is well protected?

Companies need to fortify their cyber security defence against data breaches, given the reputational damage and financial costs of such incidents.

As defenders, we have to get it right all the time; an attacker needs to be lucky only once.

But getting it right all the time is impossible. The lack of funding, talent and knowhow are the barriers.

Seeing how important it was for companies to collaborate and address different aspects of cybersecurity risks led us to establish ISTARI.

ISTARI is a global cyber risk management company that brings together a network of capabilities. With this collective power, all of us have a better chance against attacks and mitigating cybersecurity risks.

My message to all of us is this – we cannot stop many drivers of disruption, but we also should not fear them.

What we can do is to take steps to better harness these technologies and mitigate risks, either on our own or with like-minded partners.

An Agile Mindset

One other area I would like to share is on the journey of our AI and blockchain pods.

When we started them in 2018, no one had any idea how these pods would pan out.

It was a bold and risky move.

We didn’t have domain knowledge and expertise, but there were colleagues who were willing to take up the challenge.

They stepped out of their comfort zones – out of areas that they have already built years of experience in – and dived straight into the unknown.

Many of them became start-up entrepreneurs and venture builders overnight, on top of their day jobs as investment professionals.

I’m sharing this because it showed me that beyond skillsets and capabilities, the sustainability of our business models is also about our mindset, our willingness, our adaptability, our agility, our spirit, and our resilience.

The strategic opportunities we saw in these technologies gave us the impetus to build ventures and platforms from scratch. Across these companies, there are now more than 600 employees, with engineers forming more than half of them.

We’ve learnt along the way, and we’ve grown as a differentiated investor because of these experiences.

Let me now share a second area of sustainability in the context of smart technologies – that is sustainability of our planet.

Sustainability and Climate Change

Climate change is real.

You have heard this before, and you’ll keep hearing it, because it is one global challenge we must address collectively.

We cannot conduct business on a dead planet.

In the last two decades, the world has spent several trillion dollars on transition from fossil fuels to renewables such as wind, solar, and batteries. This amount will continue to grow.

While we can, and must, work at the energy transition, we must also be mindful that green machines for renewables consume large amounts of natural resources.

If such reserves are insufficient, we may need to extract these from more remote locations, which could lead to unintended environmental consequences.

Geopolitics and national interests could also further complicate access to these natural resources.

So, we must rethink the way that we go about reducing carbon footprint.

We must develop solutions that are less resource intensive, such as in recycling, repurposing, as well as innovations that reduce the use of raw materials.

Technology can enable many climate-aligned solutions in the areas of food, water, waste, energy, materials, clean transportation, and urban development.

Investors like us are putting capital to work in such climate-based solutions to create value for our stakeholders while doing good for the environment.

For example, we recently launched GenZero, an investment company dedicated to accelerating decarbonisation globally.

Some of our portfolio companies are also in this space – examples include Eavor, a geothermal technology company; as well as Svante, a company specialising in low cost carbon capture technology.

We have also established the Asia Sustainable Foods Platform, which supports food-tech companies in the region, to scale production of alternative proteins.

At the same time, we have forged many partnerships to catalyse tech-based solutions to achieve climate goals.

For example, a partnership with BlackRock led to the formation of Decarbonization Partners.

It invests in early stage growth companies targeting proven, next-generation renewable and mobility technology.

All of us have a part to play in addressing climate change — governments, companies, investors, educators, researchers, innovators, students, you and me.

I read with interest the news on SUTD transforming its campus into a green experimental ground for test-bedding new sustainability technologies, innovations and solutions.

SUTD will also work with SingHealth to achieve a smart, low-carbon district. Such initiatives allow staff and students to have hands on learning and education on sustainability.

I would like to briefly touch on another technology in sustainability.

Carbon taxes will come into force, but so will the use of carbon credits. Market transparency and price discovery are key to promote efficient allocation of resource and capital.

To this end, together with DBS, Singapore Exchange and Standard Chartered, we formed Climate Impact X, a global exchange allowing organisations to access high-quality carbon credits.

The platform uses satellite monitoring, machine learning, and blockchain technology to enhance transparency, integrity, and quality of carbon credits.

Smart technologies for climate change are exciting, and we are just getting started.

Continued investment, efforts and contributions are crucial for us to achieving our climate goals.

Greater Collaboration and a Shared Responsibility

I would like to conclude by emphasising the importance for all of us to work together.

Initiatives such as Project NovA!, SUTD’s partnership with SingHealth, as well as joint ventures such as Climate Impact X and Decarbonization Partners, are some examples.

Organisations from industry, universities, government, or from public to private companies, can benefit from a strong network to exchange ideas and foster collaboration.

There is much to gain from public-private partnerships.

Events such as this are also great platforms for us to learn from one another.

But after all is said and discussed, it is time to act.

We have a shared responsibility towards our collective future.

There is more we can do to ensure that smart technologies are deployed effectively and meaningfully – for sustainability of our businesses, and for the sustainability of our planet.

Thank you once again for having me here. I look forward to continuing the dialogue beyond this event.

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Notes:

¹ https://www.juniperresearch.com/press/cybersecurity-breaches-to-result-in-over-146-bn

² https://cybersecurityventures.com/cybersecurity-almanac-2022/