Introduction and Background
In the past few weeks, we have informally surveyed entrepreneurs operating in the metaverse to understand better what geographic locations are most attractive to them and why. We are specifically interested in profiling what makes these cities attractive to creatives and uncovering potential drivers of success, such as influencers, funding sources, community engagement activities, core strengths and capabilities, vehicles for value creation and delivery, and mechanisms for improving city-wide access, reach, and communication.
We have chosen Singapore as the first city to discuss for three reasons: its ability to draw on its past to fuel its future and push the boundaries of what is possible, its leadership in testing and adopting innovative financial strategies and tools to support a transition to the metaverse, and its commitment to becoming known as the city leading all of Asia into the future.
Singapore’s history and reputation, as a city built on integrity and committed to governance, has served it well in the past and will continue to act as an essential building block in a web3 and metaverse-inspired future. With Singapore’s 1966 decision to form the Economic Development Board (EDB), a quasi-government entity with the status of a government corporation, the city captured the best of two worlds – the public sector and the private sector. This single act created a hybrid organization that, then and now, is well-positioned to attract the attention of capital investment by industry sectors of interest.
For more than 50 years, Singapore’s EDB and overall commitment to unquestionable integrity and inclusivity, a trial-and-error environment with freedom to learn from mistakes, total respect for private sector investors, information sharing to empower the whole organization, and a sustainable and responsible mindset toward its citizens, has enabled the city to energize and implement its ongoing and future-focused vision. Singapore’s success is obvious in two metrics: an average growth rate in excess of 6% annually in GDP per capita over the last 20 years, and its educational ranking that places it among the Top 10 in the world. These indicators, and the speed with which Singapore gained prominence, is a demonstration of the power of its strategy and commitment. In more qualitative terms, this success has translated into:
- Employment opportunities with impact at pay scales that attract the best talent
- Administrative and organizational agility not possible in a government bureaucracy
- The country’s ability to be run as an entrepreneurial business but with a focus on economic development rather than profit
- A core of leaders who understand the economic-political realities of Singapore.
These results are not some fortunate accident but rather the product of a purposeful collaboration between the public and private sectors to target and create an attractive economic position for Singapore.
Singapore GDP per capita
Singapore’s strategy also recognizes and capitalizes on the current inflection point in Asia (a flood of Hong Kong residents and entrepreneurs moving to Singapore), enabling the city to position itself as the unofficial capital of Asia. This pull of entrepreneurs to Singapore is creating a buzz and causing keen interest in the reasons “why,” with a concerted effort by many to understand what is driving the attraction and investment activity.
Singapore’s Commitment to an Innovative Investment and Financial Strategy
In Singapore, a collaboration among government agencies, venture capital firms, and private companies – designed to experiment with, learn about, and build a portfolio of financial activities and mechanisms -- yields a cluster of unique capabilities. Example activities include Singapore’s Economic Development Board (EDB) which was developed to support the private sector and two sovereign wealth funds (Temasek and GIC). Temasek is a state-owned investment company investing in web3, the metaverse, and blockchain technologies within Singapore. GIC’s mission is to enhance Singapore’s international portfolio by investing in metaverse enterprises around the globe. This collaboration is further supported by Singapore’s tax system, which requires every citizen to pay a 20% tax dedicated to future, country-specific investments.
In deploying this unique investment strategy (aimed at investing inside the country by drawing on resident capabilities while also identifying and investing in interesting opportunities outside of the country), Singapore is demonstrating, to the rest of the world, that it is committed to: investing for the long term, taking on, not shying away from risk, positioning itself as an early adopter, and capable of attracting metaverse entrepreneurs to its country.
Early indications are that Singapore’s strategy is working and they are on track to be a leader in the metaverse. The signals include a wide range of activities with significant community engagement:
- This summer K-pop played as avatars in a virtual concert and had 16 million viewers
- Xctualyfe, Singapore’s first home-grown metaverse was launched in October to provide an immersive gaming experience with a local flavor for residence with initial engagement exceeding expectations
- Local metaverse startup BuzzAR started rolling out its pop-up metaverse allowing users to get an avatar experience simply by showing up.
Other signs include an ability to raise money in a difficult market, continued experimentation in the corporate world, and strong support from influential leaders:
- Edwin Tong, Minister for Culture Community and Youth, has repeatedly said: “Whilst we cannot as yet be certain of the final state of what the metaverse will evolve into, we are confident of its future.”
- Jimmy Ng, CIO of DBS Group Holdings, recently said that DBS is actively looking for ways to bring banking services to the metaverse and investing 1 billion Singapore dollars ($730 million) annually.
Key Success Factors Driving Singapore’s Position as An Emerging Metaverse Hub
At the center of Singapore’s early success in the metaverse is its commitment to pushing the boundaries where it matters, gaining the enthusiasm and engagement of its citizens, receiving the support of influential leaders, and recognizing the metaverse’s fundamental role in enriching the city’s identity. None of this success would be possible if not for Singapore’s government, which is playing a central role across several areas of metaverse activity. As an example, in the financial sector the city is making investments in blockchain in partnership with private players who are designing experiences associated with tourism, fashion, and art.
And, as an indication of the level of risk Singapore is willing to take on, the government invested $300 million in FTX and wrote it off, demonstrating it recognizes the pitfalls of investing in new technology, i.e., when technology “hits” they will be early adopters and gain an edge.
To support its activities in the metaverse, the government has organized itself (and all participants) into several groups. The participants are grouped into Service, Decentralized Finance, Financial Services, Smart Cities and Investor Associations, and academia. In organizing this way, Singapore is placing increased emphasis on financial services, education, and tourism, with its efforts heavily oriented toward blockchain and augmented reality activities. Singapore’s commitment to these activities, by way of collaborative public and private investments and partnerships, is attracting startups in this space and positioning the city as being on the leading edge.
Singapore’s Experience Shines a Light on Its Ability to Lead and Learn from Its Citizens
Singapore, with several current and planned projects, is demonstrating that it is committed to the following:
- Leading, learning, and educating its citizens to participate in a long-term strategy of success
- Building a trusted and attractive environment for participation by creatives and entrepreneurs
- Positioning itself as “first to play” by taking on risks, leading in the financial world, and setting important standards
- Using government funding to support broader and more flexible investments
- Remaining open to solving emerging issues that define the future and play to its strengths.
Several projects offer specific lessons to other cities, such as Project Ubin – a project designed to get ahead of inter-banking restrictions by coordinating financial activities centrally and engaging all financial institutions in the strategy. Project Ubin is a multi-year, multi-phase project, with each phase aimed at solving the pressing challenges faced by the financial industry and the blockchain ecosystem (including settlements and inter-banking payments).
Another project, Project Guardian, is a collaborative initiative within the financial industry focused on bringing stability and integrity to tokenization. This project is:
- Exploring the use of public blockchains to build open, interoperable networks that enable digital assets to be traded across platforms and liquidity pools
- Establishing a trusted environment for the execution of DeFi protocols through a common trust layer of independent trust anchors
- Examining the representation of securities in the form of digital bearer assets and the use of tokenized deposits issued by deposit-taking institutions on public blockchains
- Studying the introduction of regulatory safeguards and controls into DeFi protocols to mitigate against market manipulation and operational risk
- Investigating the opportunities in disruptive technologies, such as blockchain.
But Singapore is not just focused on financial activities as it transitions to the metaverse – it is also keenly aware of its citizens, the communities they live in, and the experiences they participate in, enjoy, and share. Singapore’s tourism and parks agencies are transforming (and enriching visits) to local parks with augmented reality and information keys. The agencies also support private players, such as TQ -- Tourism Technology Transformation cube — a government-backed incubator dedicated to increasing tourism.
For example, tourism and parks-focused projects include Gardens by the Bay, which is a partnership with M1 – a leading telecom company based in Singapore. The city’s agencies and M1 are empowering 5G infrastructure to deliver a virtual reality experience in parks and at other venues where favorite artists are performing, or where fashion shows are being held (Vogue Singapore).
The Singapore Tourism Board worked for eight months on a strategy they will implement over the next two years. The Tourism Board wants to learn what role the metaverse can play in attracting and reactivating international travelers coming to Singapore. Over the next two years, they are piloting programs on four different platforms (Decentraland, Roblox, Horizon Worlds, and SuperQQ Show) to learn and measure impact and audience by platform. The metrics they track include meaningful audiences, active engagement, monetization, and digital translation to physical.
In education, Singapore is making great strides in security and access with the creation of digital ID-only open certificates (digital certificates) spearheaded by the education board. These digital certs (for schools to issue and validate) include tamper-resistant certificates backed by the government.
Singapore’s future-focused initiatives have provided valuable lessons to the city itself (through its successes and failures) and to other cities worldwide attempting to keep pace with the changes brought by web3 and the metaverse. For Singapore, the impact has been felt on its citizens, its financial partners, and on the city’s plans for current and future growth, sustainability, and quality of life. Specific impacts from Singapore’s initiatives include the ability to:
- Strengthen community engagement via improved access and ease of services and experiences
- Build new capabilities and fuel the city’s economic engine via startups, incubators, and the formation of expertise clusters
- Enhance and emphasize the city’s identity
- Encourage, create, and support cause-based communities focused on sustainability and other “champion” issues
- Create a new way for people to interact and connect, leading to forming a new social construct.
By remaining open to change, committed to new experiences, and fearless in its pursuit of a future that all citizens can enjoy, Singapore has set itself apart from other cities around the world. Its focus on learning by doing and creative use of financial and other capabilities has enabled Singapore to break down silos and become a test case for other cities inspired by the metaverse. Those watching how web3 and the metaverse are taking hold in cities can’t wait for Singapore’s next move.
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Note: This blog draws on several interviews, articles, and sources, including: The Ministry of Community and Youth (Singapore); the Center for Livable Cities (Singapore);
web3-and-beyond; Singapore are ready for the metaverse; Singapore:future of finance; CS Cities-Singapore; Singapore 5G