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Digital Economy Agreement Singapore

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Digital Economy Agreement Singapore

2021-02-04T09:30:00+08:00January 7, 2021|0 Comments

The way we do business has rapidly changed in recent settings. Using digital in delivering values to customers, beyond keeping up with the trend is crucial, as among others provide better cost-time efficiency. Not to mention resources and opportunities which are previously invisible by geographical restraints are now made easily accessible, all that thanks to the digital economy.

According to 2019 annual report on Southeast Asia by Google, Temasek and Bain & Company, the digital economy, contributed by Singapore amounted to SGD16.6 billion, which is 12% of the SEA’s digital economy. And the biggest players so far are ride and food-hailing services such as Grab and Food Panda, and e-commerce businesses like Carousell. Singapore, with the best talent pool in SEA, particularly in the engineering department, attracts the most startups in digital businesses.

Overview of digital economy

But what is digital economy really about? Unlike the traditional way, companies connect market participants together in a virtual world – a crude definition of digital economy. The World Economic Forum and the Group of Twenty define digital economy as a wide collection of economic activities that utilize digitized information and knowledge as an essential ingredient in their production, modern information networks as fundamental business space, as well as information and communication technology to propel productivity growth.

When we are talking about digital economy, it is referring to the macro-level, the accumulated activity of all businesses with online presence operating in the same ecosystem – Digitalization as an interface of their revenue production. With that, it is simpler to understand what the benefits of digital economy are to the country, as what benefits of online businesses are to businessmen.

Benefits of digital economy

This will come back to basic, in that a functioning economy is all about efficient allocation of resources used to meet the needs of its citizens and is concerned with the production and consumption of goods and services. The digital landscape simply improves the economy efficiency and effectiveness, by cutting short transaction time for all kinds of economic activities. Interestingly, this has also created a new resource which can be invaluable to businesses and countries – data.

The Trade and Industry Minister Chan Chun Sing in 2017 cited that “The digital age has thrown up a resource – data – that allows Singapore to overcome its geographic and resource limitations”.

On the micro-level aspect, businesses would benefit digital economy as participants in the online market. The list can be inexhaustible, but the key points are:

  • Sales and marketing activities will have unlimited coverage and can be accessed 24/7 which will potentially drive business revenue.
  • Higher quality resources could be located easily in online market as compared to traditional method
  • Possible cost-saving as business with online presence can operate remotely effectively renting less office space.
  • Flexible nature of working online remotely could boost morale among business workers.
  • Online purchases make it easier for data collection and analysis, which in turn could be a great asset to companies for the purpose of relationship management, estimating demand and supply, branding, and financial forecast.

Seeing the benefits digital economy could offer, for many businesses, it is a solid argument for going digital. Yet the concerns are in the feasibility of regulations placed to sustain trade in this unlimited, fast-paced environment.

Few concerns arise:

  • Can businesses reap the benefits of digital economy with a high degree of confidence knowing that their rights and safety will be protected?
  • How well is the data protected against loss & theft?
  • Is there any legal establishment in digital economy Singapore?

There is various effort made by countries to spur economic ties effectively increase values exchanging hand between economies. Particularly, here in Singapore, treaties were concluded to enforce digital trade rules and digital economy between two or more member countries. Known as Digital Economy Agreements, the Singaporean government aims to further develop a network of free trade agreements and digital cooperation among member countries.

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DEAs – Digital Economic Agreement

Singapore is actively looking for strategic collaboration and has achieved thus far – two negotiations had already concluded, and one recently launched with Korea.

  • Digital Economy Partnership Agreement (DEPA) [Chile & New Zealand]
  • Singapore-Australia Digital Economy Agreement (SADEA) (effective 8 December 2020)
  • Singapore Digital Partnership Agreement (KSDPA) [Korea]

The details of agreements differ between one another but in general, DEAs address the concerns of businesses related to rights and safety in the following mechanism:

  • Harmonize digital rules and standards and facilitate interoperability between digital systems.
  • Support cross border data flows and safeguard personal data and consumer rights
  • Encourage cooperation between Singapore’s economic partners in nascent areas such as digital identities, Artificial Intelligence (AI) and data innovation. This gives organizations the scope to trial use-cases and technologies across different countries.

How can businesses benefit from DEAs?

In general, businesses will indirectly gain an advantage over more uniformed standard of trade regulation, which will result in improved efficiency in transactions, reduced cost as well as enhanced fairness and transparency. Businesses could also position themselves strategically according to the specifics of each agreement – these are aligned to modules in DEAs, by which contain standards promotes by the Singaporean government. To name a few, these modules are:

  • Artificial Intelligence
  • Cross Border Data Flows
  • Data Innovation
  • Data Protection Trustmark Certification
  • Nationwide E-Invoicing Network
  • SMEs Go Digital

Conclusion

As the digital economy gets increasingly conducive to businesses in Singapore, and with the new norms resulted from the COVID-19 pandemic, in our opinion – there is no better time to launch online businesses. With the rich talent pool in Singapore, you will secure better market share, the earlier the business is launched. If you still do not have a clear picture of how to do it right, contact Paul Hype Page services for consultations to help you make more informed decisions.

Digital Economy Agreement Singapore FAQs

What are the benefits of the digital economy?2021-01-07T11:09:55+08:00

The digital economy simply improves the economic efficiency and effectiveness, by cutting short transaction time for all kinds of economic activities. The relevant point for business owners is that the shift in digital economy opens up various kinds of opportunities with better outreach. Beside that, having online operation could mean reaping the advantages of better coverage and market penetration, improved cost and operation efficiency, and the benefit of free-use data for purpose of analysis which could be analyzed for the purpose of relationship management, estimating demand and supply, branding, and financial forecast.

Why are the DEAs important to digital economy?2021-01-07T11:09:19+08:00

DEAs are the measure to improve economic collaboration and integration, by harmonizing rules and regulation. It will enhance digital economic activities between members, creating new opportunities along the way. Businesses can transact with one another more confidently as trade regulations are imposed collectively between countries rather than separate local law enforcement which may be limited to a certain extent. The most prominent aspect relates to data protection as information transfer across easily could open doors for social engineering and identity theft.

What are the benefits of DEAs to my business?2021-01-07T11:08:51+08:00

The benefit of DEAs, in general, can include indirect advantage over more uniformed standard of trade regulation, which will result in improved efficiency in transaction, reduced cost as well as enhanced fairness and transparency in digital economy.

DEAs can also be a strategic catalyst for businesses to position themselves according to specific agreements between member countries. For example, in the Digital Economy Partnership Agreement (DEPA) between Singapore, Chile and New Zealand, one of the key features is to increase SMEs cooperation by having more dialogue to promote information sharing and exchange. This could be strategic for businesses to understand consumer behavior in member’s countries which could lead to new market creation abroad.

How can businesses in Singapore participate in DEAs?2021-01-07T11:05:12+08:00

Singaporean government has run a few digital economy initiatives. More details of the initiatives depend on general and specific items of agreement. They are arranged in modules, which can be accessed in the Ministry of Trade and Industry’s website.

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