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The Real Winners of the Technology Boom

by Marek Danyluk

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Many of us grow up hearing the expression “Behind every great man, is a great woman.” When we apply this old adage to the success of companies, we will also see that behind every great company, is a great support system.

The rise of the technology industry, the sudden boom of technology start-ups, as well as the craze over big data have more than changed the economic landscape over the past few years. While many have fawned over the success of rising start-ups such as Uber and Grab (amongst others) and other tech giants such as Amazon and eBay, it is often the companies and systems which support these superstars that often go unmentioned. Critics are concerned that the rise of the technology industry would lead to the fall of the “traditional” brick and mortar industries. However, this article begs to differ. The quiet support numerous manufacturing, raw materials and shipping companies are lending to these successful start-ups is the reason we see the quick and exponential success of these tech companies.

Although technology, data and knowledge is readily available with just a click or a swipe, our heavy reliance on data means that someone has to ensure that our data is kept safe and secure in a physical location. Just to give some context, the largest data centre in the world, spans 13 hectares,[1] which is the size of more 15 football fields. The Tahoe Reno Industrial Centre in Nevada currently houses Tesla’s Gigafactory, Apple’s project Mills and Switch’s hyperscale data centre complex.[2] Google has also jumped on the bandwagon and bought 1210 acres of land in the industrial centre.[3] In Singapore, companies such as Keppel Data Centres which focus on the building of such storage systems are now benefitting from this exponential hunger for data creation. Just a month ago, the Infocomm Media Development Authority, Huawei International and Keppel Data Centres signed a memorandum of intent to build a high-rise, green, data centre in Singapore.[4] In the process, traditional construction companies benefit from these large-scale developments.

Other “traditional” companies have also come to benefit. The global increase in smartphone usage has also led to the success of contract manufacturers such as Hi-P which specialises in consumer electronics and mobile devices. The rise in electric car production spells good news for Lithium miners while the rise in renewable energy increases the need for raw materials such as silicon which is vital for the production of solar panels.

Finally, “traditional” industries such as banking and finance as well as logistics and shipping have evolved with the emergence of technology start-ups. In the shipping and logistics sector, more retailers are shifting their strategy towards “drop shipping”, a supply chain technique where the retailer sells products to its customers without keeping any products in stock. The banking and finance industry is also jolted with the emergence of start-up financing. Just in the first six months of 2017, US$946.4 million has been poured into technology investment, with Grab leading the way with US$2 billion of investor money.[5] The landscape has also transformed with more financing options for start-ups. For instance, Validus Capital facilitates financing for Small and Medium-sized Enterprises through a crowdfunding platform.[6]

The outlook is therefore not bleak for our so-called “traditional” brick and mortar companies. The rise in technology investment simply means an evolution of our economic landscape. These “traditional” companies need to learn how to evolve with times to ensure that they continue providing the strong foundation and support in order to stay competitive.

 

Sources

[1] http://www.channelnewsasia.com/news/singapore/singapore-explores-possibility-of-building-a-high-rise-green-9045112

[2] http://www.datacenterdynamics.com/content-tracks/design-build/google-is-planning-a-massive-data-center-in-nevada/98175.fullarticle

[3] http://www.datacenterdynamics.com/content-tracks/design-build/google-is-planning-a-massive-data-center-in-nevada/98175.fullarticle

[4] http://www.channelnewsasia.com/news/singapore/singapore-explores-possibility-of-building-a-high-rise-green-9045112

[5] https://www.techinasia.com/singapore-10-best-funded-startups-in-2017-so-far

[6] https://www.validus.sg/index.html