•  The second was the drive to create a Smart Nation – building critical infrastructure and capabilities in digital and sensor technologies. By 2040, a thriving ideas economy had taken root in Singapore, with value-added embedded in ideas rather than physical form. •  The creation of economic value was associated increasingly with “dematerialised products” such as telecommunications, algorithms, software, design, testing and research. •  At the same time, Singapore built on its traditional strengths in the ideas economy, namely marketing, branding, and global supply chain management. Advances in robotics and 3-D printing helped to spawn new activities in Singapore’s offshore facilities in the AFEZ: •  production of space vehicles and supersonic jet engines;  •  additive manufacturing of components for electric cars and autonomous vehicles. Technological advances also transformed the structure of the territorial economy. •  Cutting-edge biologics to produce drugs for cancer, auto-immune diseases, congenital disorders and dementia emerged as the largest component of manufacturing. •  Real-time genome sequencing for disease control started from scratch to become one of the fastest growing segments within the territorial economy. •  Infrastructure financing became the largest contributor to modern services, with Singapore-based financial institutions and markets financing projects ranging from the Sino-Indian lunar complex to the pan-ASEAN nuclear fusion reactors. BIS central bankers’ speeches  7  During this period, regional integration and technological advances helped sustain GNI growth of 2.9% per annum and GDP growth at 2.6% per annum, a remarkable performance given the maturing of the economy.

The most  BIS central bankers’ speeches  3  important outcomes from that period of review which continued into the 1990s were the structural reforms to: •  enhance wage flexibility in the labour market;  •  tap more decisively into regional markets for trade and outward investment;  •  step up the pace of industrial upgrading;  •  promote innovation, enterprise, and entrepreneurship in the economy; and  •  liberalise various services sectors such as finance, telecommunications, and utilities. In fact, the key story post-1985 recession up till the Global Financial Crisis of 2008 was the rise of modern services as a twin engine of growth alongside manufacturing. •  The share of modern services in GDP increased steadily, from 16% in 1965 to 24% in 1985 and 28% in 2010. Financial services. Singapore was already a thriving regional financial centre since the 1970s. In the late 1990s and early 2000s, the insurance and securities industries were completely liberalised and progressive steps were taken to open up the domestic banking industry to foreign competition. Business services. A broad range of business activities – accounting, law, advertising, and consultancy – grew in importance, playing an important role in cementing Singapore’s status as a regional hub. Info-communications services. The government embarked on a plan to computerise the civil service in the early 1980s. This helped to kick-start the info-communication services industry, one of the mainstays of the economy ever since. Entertainment services.