By 2025, the economy had matured, with productivity growth accounting for virtually all of economic growth. BIS central bankers’ speeches  5  2026–2040: Regional integration and technological transformation The fourth phase of Singapore’s economic development saw the fruition of the decades-long quest for regional integration and the rise to prominence of what we refer to today as our offshore economy. This was also the period that saw widespread technological transformation and the emergence of the ideas economy. By 2040, the global centre of economic gravity had shifted decisively to Asia. •  China was by far the largest economy in the world, with per capita incomes approaching that of upper middle income countries. •  India emerged as the third largest economy in the world, with the largest middle class and a global network of indigenous multinationals. •  But perhaps most significant for Singapore was the emergence of Indonesia as the fastest growing economy in the world, following far-reaching economic reforms in the early 2020s. Singapore’s high-end manufacturing and modern services benefitted significantly from trade and investment links with these Asian giants, in addition to the Unites States and the North Euro Area. But the real game-changer was the setting up of two supra-national economic zones. In 2028, Malaysia and Singapore got together to set up the Iskandar-Singapore Economic Zone or ISEZ: one economic system spanning two sovereign countries. •  The experiment succeeded beyond expectations, providing global and regional investors an integrated production and services base that was unmatched in Southeast Asia.

6  BIS central bankers’ speeches  •  For the first time, these inflows exceeded the income repatriated abroad by MNCs operating in Singapore. •  Gross National Income (GNI) per capita became the more relevant measure of Singapore’s income and standard of living than just GDP per capita. The 2020s and 2030s saw the proliferation and convergence of several technological trends that transformed economies and societies globally. •  Rapid progress in digital and mobile technologies, coupled with advanced biometrics and global wi-fi access, made payments virtually costless and highly secure, precipitating an explosion in the growth of digital commerce and digital finance. •  Advances in cloud computing, big data analytics, smart sensors and learning machines transformed the provision of consumer and business services, including financial, legal, auditing, consultancy, and logistics. •  They also spurred a transformation in the provision of social and public services such as telemedicine, online learning, and congestion control, substantially enhancing efficiency and consumer welfare. Singapore was well-positioned for the pervasive digitisation of the global economy that occurred in the 2020s and 2030s, mainly due to two key initiatives that it embarked on in 2015 in the drive towards productivity-led growth: •  The first was the concerted national effort to build and deepen skills at all levels through extensive worker retraining programmes and subsequent introduction of the teaching of digital technology across the education system.