Institutions to Cushion the Blow and Speed the Transformation In past industrial revolutions, the actions of public, private and third party institutions have helped shrink the duration, impact and cost of the transition. It is worth reflecting on these interventions as we think about how to manage the transition to the Fourth Industrial Revolution. 25  The skills bases of workers were fundamentally transformed by a series of reforms to enabling institutions including primary, secondary and tertiary education. 26  New insurance institutions were created to support  those left behind in the transition, including unemployment insurance and universal health care. 27  And  labour market institutions – cooperatives, trades unions, and the introduction of a minimum wage and private company pensions – plugged gaps in provisions. 28,29  Throughout these periods, many employers helped create an environment in which employees could thrive. From charitable support in the First Industrial Revolution; to the Ford era of self-interested paternalism in between, and the GooglePlex, self-contained communities of today, business has shaped the welfare of many. 25  My colleague Andy Haldane has also discussed these issues. See ‘Ideas and Institutions – A Growth Story’, speech given at The Guild Society, Oxford, 23 May 2018. 26 In the UK in the late 18th and early 19th century, a mix of public, private and religious institutions – largely driven by charitable motives – brought education to children working in mills. In the second and third revolutions, the state established formal primary, secondary and tertiary education.

Markets might then react by driving up long-term interest rates. The premature tightening of financial conditions could then trigger increased volatility in financial markets, especially in economies that have yet to emerge from the pandemic and those with higher fiscal or external funding needs. In sum, while the global economy is in a much better place compared to last year, uncertainty remains as elevated. What has changed is the nature of the uncertainty. Last year, we were uncertain how far down the economy will go, in the face of an unprecedented pandemic. This year, the uncertainty is in both directions: a much stronger recovery or a much 2/9  BIS central bankers' speeches  dampened one. SINGAPORE ECONOMY The Singapore economy had recouped in the first quarter of 2021 the aggregate output loss incurred during the pandemic. The recent tightening of domestic restrictions and border controls will cause a near-term setback to segments that make up about 8% of the economy. The consumer-facing industries (retail trade, food & beverage, and land transport services) will be most affected by the tightening measures. The travel-related industries (air transport, accommodation, arts, entertainment & recreation) are likely to see further delay in their recovery. Construction and marine & offshore engineering activity may be hindered by labour shortages from the border restrictions on the entry of foreign workers. But the economic impact of the current restrictions will be significantly less severe than during the circuit-breaker last year. The majority of businesses remain in operation.