This commentary first appeared in The Straits Times and was written by Yorlin Ng, COO of Momentum Works & Head of Momentum Academy and Ih-Ming Chan, Executive Director and Head, Digital Industry Singapore (DISG). Republished with permission.
“Investors across the board have turned cautious, pivoting from seeking ‘growth at all costs’ to ‘growth and, more importantly, profitability’. For employees in tech, these are uncertain and worrying times.”
When Google and Alphabet CEO Sundar Pichai took to the stage last month at the Code Conference, one of global tech’s biggest events, he spoke about making the company 20 per cent more productive. One way to do so, he said, was understanding how to reduce the number of people making decisions in “areas to make progress”.
Mr Pichai’s comments come as big tech companies including Meta, Amazon, Microsoft and Apple prepare for a global economic slowdown with job cuts, hiring freezes and internal reorganisations. Falling stock valuations, rising interest rates and recessionary fears have forced companies into belt-tightening mode.
As a global city, Singapore has not been spared, with some platform companies here adjusting their workforce strengths and profiles.
Concerns are not just limited to the tech sector though as corporates across the business world are looking for a modicum of predictability in the short-run and have turned to cost reduction. Investors across the board have turned cautious, pivoting from seeking “growth at all costs” to “growth and, more importantly, profitability”. For employees in tech, these are uncertain and worrying times.
It is not all doom and gloom though.
Covid-19 has spurred demand for technology solutions and driven digital adoption. The amount of private capital raised by Singapore startups jumped about three times from S$5.5 billion in 2020 to more than S$14.7 billion in 2021, as investors went in search of returns in Southeast Asia. As a result, Singapore minted 11 new unicorns in 2021, including the likes of Ninja Van, Carousell, PatSnap, Nium, and Carro.
Global companies are continuing to invest in Singapore and many local tech companies are expanding to pursue growth in the region, given the still-buoyant long-term outlook for Southeast Asia’s digital economy which is on track to exceed US$363 billion (S$516.5 billion) by 2025. It will become one of the world’s fastest-growing digital markets with opportunities for retailers, e-commerce players and related service providers in media, payments and financial technology.
Investors, who have deep pockets, remain cautious but are keeping track of opportunities. With companies like Singapore-headquartered Grab, Indonesia’s Bukalapak and Malaysia’s CTOS going public since last year, the signal to investors is that there is liquidity in the Southeast Asian market. Their IPOs validate the business models and the potential opportunities in the region.
Many Asian tech companies continue to set up regional hubs in Singapore. Tencent Holdings, the world’s largest video gaming company by revenue, announced the setting up of a new game development studio in Singapore. MiHoYo, developer of open-world action RPG Genshin Impact, opened its regional hub in Singapore that will house several hundred employees. ByteDance is still hiring aggressively.
Furthermore, Singapore is also increasingly seen as a hub for emerging subsectors such as Web3 due to its openness and forward-thinking regime. For example, Fireblocks, a platform that secures digital assets in transit, opened their office in Singapore in line with their business expansion.
Demand for tech talent
Tech jobs continue to be high in demand and have increased by about 10,000 annually across the entire economy, in particular for roles such as machine learning engineers and backend developers. This is largely a result of accelerated digitalisation efforts across companies emerging from the Covid-19 pandemic.
There is continued demand for tech talent as more organisations, even non-tech ones, set up innovation hubs and centres for excellence. French multinational Thales earlier this year announced an expansion of R&D capabilities in Singapore to work on technologies linked to the cloud and to drive digital innovation in the areas of 5G, FinTech and biometrics.
A Financial Times report recently suggested Wall Street firms were starting to see benefits from the reversion to the mean in tech, as they have been able to win back skilled workers such as computer engineers.
Play the long game
Prior to the pandemic, the three key reasons why people joined tech companies was to learn about new technologies and industries, get the chance to disrupt the status quo and participate in the exponential growth. They were willing to take risks despite long working hours and lack of job security. Competition was fierce and tech companies prioritised growth over efficiency.
Fast forward to 2022 and these tech companies have matured. Tech companies previously battled for talent by pushing up wages, and this allowed them to engage in significant poaching from other industries. Now, many tech entrepreneurs are grappling with looking inward to see what fat they can trim. It’s a first for those who thrived during the bull market of the past 13 years.
Here, examples from mainland China can prove instructive. Tech companies there restructure more frequently than in other countries. For example, Alibaba and Meituan – leaders in their sectors – have undertaken frequent restructuring to maintain organisational dynamism and agility. This has also been seen as a top-down effort to emphasise the need to guard against complacency and excessive bureaucracy.
This policy has run into controversy outside of China but has also been instrumental in shaping the mindset of a generation of tech entrepreneurs.
A pioneer of the Chinese tech giants told the Momentum Works team recently that younger employees should develop an ability to stay agile early on in their career.
This holds true for any employee seeking to future-proof their careers amid accelerating digital transformation across the economy. Numerous upgrading programmes are available in Singapore for individuals who want to position themselves for growth opportunities or to switch careers and enter the tech industry.
For example, IBM launched their certifiable skills training programme, i.am-vitalize, in 2020 and has since trained over 700 individuals in AI and cybersecurity. Google’s Skills Ignition SG programme has trained over 3,000 local fresh graduates and mid-career job seekers in digital marketing and cloud technology. Most recently, Temus, a digital transformation solutions outfit set up by Singapore’s sovereign wealth fund, Temasek, and US based digital and tech services firm, UST, launched a four-month graduate training programme for individuals keen on building a career in tech. To date, over 1,000 graduates have been trained.
To sum up, uncertainty is not always negative. Individuals who work in tech should know that the skills, experience and knowledge they have picked up in one job can be applied to the next one, and this mobility enriches the broader ecosystem.
Alibaba Group perhaps summed it up best on why embracing change is a core value of the company. It said: “Change is the only constant. Whether you change or not, the world is changing. We must face change with respect and humility. Whether you change yourself or create change, both are the best kind of change.”
Yorlin Ng is Chief Operating Officer of Momentum Works and Head of Momentum Academy, a Singapore-headquartered venture outfit that connects decision makers through insights, communities and immersion programs. Ih Ming Chan is Executive Director and Head of Digital Industry Singapore, a joint office of the Economic Development Board, Enterprise Singapore and Info-communications Media Authority to grow Singapore’s tech sector. These are their personal views.