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The Automated City: Just the Tip of the Iceberg

· Singapore,Automation,Driverless Cars,Ai,Machine Learning

In the past 60 years, the Four Asian Tigers (Singapore, Hong Kong, South Korea, and Taiwan) have seen unprecedented economic growth, with Singapore leading the way. Since 1980, Singapore’s GDP has grown 25-fold, from $11.98 billion to $311.3 billion. From 1999 to 2007, its annual growth rate was about 6%, which fell to 0.6% in 2008 during the global recession, only to spring up to 15.2% in 2010. In recent year, however, Singapore’s GDP has grown at about 4% annually. While high by U.S. standards, this isn’t the kind of high growth that was seen during the previous decades. Singapore hopes to expand these growth numbers by boosting total factor productivity with investments in AI and automation technology.

With investments in AI and automation, Singapore can raise its total factor productivity, and thus its economic growth. Despite high GDP growth starting in 1960, total factor productivity growth has been relatively slow during this period. As Khuong Vu outlines in his paper “Sources of Singapore’s Economic Growth 1965-2008,” GDP per capita tripled from 1970 to 1990, despite total factor productivity growing by under 1% annually during this period. This may be about to change, as Singapore is expected to enter a period of increased automation which could improve the efficiency of the economy and raise total factor productivity. By raising total factor productivity, Singapore may be able to uncover an untapped source for growth.

In an effort to boost its total factor productivity, Singapore is entering a period of increased automation. The city-state has already seen interesting advancements in the field of AI and automation technology. Government-subsidized robots have become especially prevalent in manufacturing. Currently, Singapore’s factories have a robot density of around 448 per 10,000 employees, one of the highest in the world. Manufacturing isn’t the only industry that’s utilized AI and robotics. The Singapore Post has developed autonomous delivery robots, and transportation company Easymile has built a driverless bus called EZ10. Some hotels are using service robots to clean rooms. Robots have even been developed to assist in early childhood education. Despite these advancements, there’s still a lot of room to grow.

In the coming years, AI and automation technology is expected to expand rapidly in Singapore. According to the “Global Future of Work Survey” produced by Willis Towers Watson, 29% of all work done in Singapore will be automated by 2021. Currently, 14% of work in Singapore is automated, up from 7% just three years ago. Supporting these numbers, ABB and the Economist ranked Singapore as one of the top three most AI-ready countries, along with South Korea and Germany. The government has been highly supportive of AI technologies, setting aside $3.2 billion for manufacturing automation research between now and 2020. This initiative is expected to spur competitive, efficient, and productive manufacturing. Combined with a rise in total factor productivity from automation, these initiatives, if implemented efficiently, can increase Singapore’s growth in the coming years.

Since 1960, Singapore has seen massive growth in GDP while maintaining low growth in total factor productivity. If the city-state can raise its total factor productivity with investments in technology such as AI, automation, and robotics, it can tap into a new source of growth. As the article “Singapore Prepares for the AI Revolution” explains, the Singaporean government has justified AI investments because they will improve the lives of their citizens. Current efforts, however, are just the tip of the iceberg. If the public and private sector continue to expand their AI investments, GDP per capita and quality of living will grow at a faster rate.

Written by John Martin and Jack Vasquez & Edited by Alexander Fleiss

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