<p>The world is in a polycrisis. Markets and societies are straining under the pressure of economic uncertainty, geopolitical instability, climate change, supply chain disruptions and persistent inflation. But while market volatility is a big challenge, it also presents an opportunity for future-focused investors and companies.&nbsp;</p><p>In order to negotiate these complexities, a nuanced, multipronged approach is required, says Rohit Sipahimalani, Chief Investment Officer of the global investment firm Temasek. &ldquo;Companies and governments can no longer sit on the sidelines. Everyone must play an active role in solving shared global challenges, as businesses cannot succeed unless societies thrive,&rdquo; he says. &ldquo;It is crucial to have a viewpoint on what the world will be like in this decade, as it will allow us to be astute in scoping out current and future challenges and opportunities.&rdquo;&nbsp;</p><p>Temasek has identified six key challenges in the decade ahead for which investors and companies should prepare.</p><h2>Challenge 1: Persistent economic uncertainty</h2><p>Persistent inflation, restrictive macroeconomic policies and sluggish growth have left investors worried. <a href='https://www.imf.org/en/Publications/WEO/Issues/2023/10/10/world-economic-outlook-october-2023' target='_blank'>Research</a> by the International Monetary Fund (IMF) underscores the potential consequences, including lower consumer spending and reduced business investment. Supply interruptions, pent-up demand and rising commodity prices have driven inflation to a multi-decade high, compelling central banks to act aggressively. IMF estimates indicate a worldwide growth slowdown, highlighting the need for long-term investment to weather short-term economic swings.</p>

<p>&ldquo;One that can withstand external shocks and perform through market cycles to deliver sustainable returns over the long term&rdquo; says Sipahimalani.</p><p>Despite continuing challenges, the global economy is displaying short-term resilience.</p>

<p>Sipahimalani believes that Temasek&rsquo;s investment approach can give it an edge in the current volatile environment. &ldquo;We adopt a long-term view of our investments, which gives us the flexibility to take concentrated positions and invest in all stages of the business life cycle,&rdquo; he says. &ldquo;Our long-term performance has surpassed market indices over a 20-year period, and delivered a 9 per cent 20-year return as at 31 March 2023.&rdquo;&nbsp;</p><h2>Challenge 2: Navigating geopolitical turbulence</h2><p>Global geopolitical turbulence has presented investors and companies with new and complex difficulties. The US&ndash;China rivalry has deepened, the Ukraine&ndash;Russia war has had a downstream impact on global food and energy security, and the Israel&ndash;Hamas conflict will have extensive security and humanitarian consequences across the region. Supply chains are being reconfigured from just-in-time to just-in-case, which will add to inflationary pressure and business costs as economic policies <a href='https://www3.weforum.org/docs/WEF_Global_Risks_Report_2023.pdf' target='_blank'>shift</a> to both defensive and offensive strategies.&nbsp;</p><p>The theme of decoupling and derisking is one that investors and businesses will need to track closely to navigate geopolitical challenges effectively. &ldquo;The flow of human and financial capital is also starting to be restricted, which will have long-lasting effects in key sectors where national security concerns are foremost,&rdquo; says Sipahimalani. &ldquo;However, we see opportunities in these challenges as countries and companies invest in alternate supply chains and import substitution takes root in a bid to achieve domestic and regional supply chain security.&rdquo;</p><h2>Challenge 3: Managing regulatory hurdles</h2><p>The International Monetary Fund <a href='https://www.imf.org/en/Blogs/Articles/2023/04/05/fragmenting-foreign-direct-investment-hits-emerging-economies-hardest' target='_blank'>estimates</a> that trade restrictions arising from foreign investment regimes will lead to global output losses of close to 2 per cent, and this will be felt most acutely by developing economies. &ldquo;The increasing number, scope and complexity of foreign direct investment (FDI) screening regimes add an additional barrier and uncertainty to the deployment of capital,&rdquo; says Sipahimalani.</p>

<p>The global foreign direct investment landscape continues to evolve as a growing number of countries adopt measures to protect national assets and critical industries, and governments increase their scrutiny of trade and investment deals. In this climate, Temasek&rsquo;s approach remains guided by opportunities aligned with the firm&rsquo;s core investment trends &ndash; digitisation, sustainable living, the future of consumption and longer lifespans.</p>

<h2>Challenge 4: Climate emergency</h2><p>Rising greenhouse gas emissions are the primary cause of climate change, which poses serious environmental and economic risks. These risks can affect business operations, supply chains and financial markets. Temasek's response is rooted in sustainability. It has set a target of halving the net carbon emissions attributable to its portfolio in 2010 by the year 2030 and of achieving net zero in its portfolio by 2050.&nbsp;</p><p>&ldquo;At Temasek, sustainability is at the core of everything we do, from our mandate to deliver sustainable returns over the long term to how we operate as an institution, shape our portfolio and engage our portfolio companies to build sustainable businesses,&rdquo; says Sipahimalani. &ldquo;We see our capital playing a catalytic role in accelerating sustainability and decarbonisation solutions, as it can more easily collaborate across borders to create the mass needed to underpin large investments.&rdquo;&nbsp;</p><p>To improve portfolio resilience and advance towards its sustainability aims, Temasek has put in place a robust ESG assessment process whereby all potential new investments are assessed for their carbon footprint, physical and transition climate risks, and climate impact opportunities from technological advancements. The company also introduced an internal carbon price of $42/tCO2e in 2021 to guide its investment decisions. This was increased to $50/tCO2e in 2023, with plans to double it by the end of the decade.</p>

<h2>Challenge 5: Heightened cyber risks</h2><p>In the digital age, heightened cyber security risks pose a significant challenge. The increasing use of advanced technologies such as 5G, AI and Web 3.0 increases the threat of cyber attacks, which is expected to <a href='https://www.weforum.org/agenda/2023/01/global-rules-crack-down-cybercrime/' target='_blank'>cost</a> $10.5tn annually by 2025. &ldquo;Recent cyber security incidents and breaches are a timely reminder that no company is impervious to such attacks,&rdquo; says Sipahimalani. As technology advances and cyber threats proliferate, Temasek is focused on strengthening the cyber resilience of its portfolio companies. To this end, it set up cybersecurity companies Ensign and ISTARI, which deploy cyber solutions for its ecosystem and beyond.</p>

<p>&ldquo;Company boards and management should make cyber security a top priority,&rdquo; says Sipahimalani. &ldquo;This requires robust governance, compliance and processes to address evolving cyber threats.&rdquo; Temasek encourages collaboration as a strategic defence. For example, ISTARI, a company founded by Temasek, aims to harness the collective power of the world&rsquo;s leading cyber security companies, experts and knowledge to work alongside clients on their journey to becoming digitally resilient.&nbsp;</p><h2>Challenge 6: Industry and workforce evolution</h2><p>Industry 4.0 is the next step in manufacturing's digital transformation. McKinsey has <a href='https://www.mckinsey.com/capabilities/operations/our-insights/capturing-the-true-value-of-industry-four-point-zero' target='_blank'>reported</a> that when the digital transition is implemented properly it results in 30 to 50 per cent reductions in machine downtime, 10 to 30 per cent increases in throughput, 15 to 30 per cent improvements in labour efficiency and 85 per cent more accurate projections across various sectors. The core components of Industry 4.0 &ndash; data and networking, analytics, robots and human&ndash;machine interaction &ndash; require a qualified and upskilled workforce.</p>

<p>Temasek is getting its workforce future-ready through continual staff learning, and it extends this work to its portfolio companies, helping them prepare to transform their business models by bringing together company, unions and employees to understand and anticipate shifts in relevant sectors. &ldquo;Through this process, we aim to develop portfolio companies that are nimble and innovative, prepared to face disruption and to take on new opportunities,&rdquo; says Sipahimalani.&nbsp;</p>

<p>Twenty years ago, the concept of an online space in which people around the world could collaborate on anything, from creating new worlds to running businesses, seemed out of reach. Today, Roblox &ndash; an online game and game creation platform &ndash; has reimagined the way people live, work, and play, whether they are eight or 80. With a market capitalisation of more than $23.6bn as of November 2023, the digital platform is entirely fuelled by community and user-generated content as a hub for culture, creativity, education and business. It's a virtual playground, classroom, concert hall and workplace all rolled into one, and today&rsquo;s teens and preteens, also known as Generation Alpha, can't seem to get enough of it.&nbsp;</p><p>As the global landscape evolves and consumer behaviour changes in our omnichannel world, we can expect more of these experiential platforms to take centre stage and shape the future of consumption. Other megatrends &ndash; such as sustainable living, digitisation and longer lifespans &ndash; are also poised to have a big impact on businesses and society for years to come.</p><h2>The future of consumption: a world of changing preferences</h2><p>Trends and preferences in consumer consumption are rapidly changing thanks to rising middle-income populations, increased spending power and technological advances. Areas such as ecommerce and digital payments are driving the growth of the internet economy. Approximately two-thirds of the world's population is currently online, and as this number grows, the future of consumption is likely to shift towards digitally integrated and digital-first experiences.&nbsp;</p>

<p>Temasek, a global investment firm, recognises that investments in sectors such as ecommerce and financial services have the potential to tap into these changing consumer behaviours and to drive growth. &ldquo;We actively examine changing consumption patterns that are underpinned by structural shifts in society,&rdquo; says Chia Song Hwee, Deputy CEO of Temasek. &ldquo;In doing so, we identify investment opportunities at different stages of long-term trends, such as growing middle-income populations and the rising demand for tech-enabled services.&rdquo;&nbsp;</p><h2>Sustainable living: mitigating climate change and resource conservation</h2><p>Energy transition, food security and the decarbonisation of industry require breakthrough solutions. The International Energy Agency (IEA) <a href='https://www.iea.org/reports/net-zero-by-2050' target='_blank'>expects</a> emerging technologies to account for more than 40 per cent of global greenhouse gas (GHG) emission reductions in the net-zero emissions by 2050 scenario. Current innovations such as carbon capture and storage, green hydrogen, sustainable aviation fuel and green ammonia are gaining traction, but need to be scaled up for industrial decarbonisation. This will require trillions of dollars of new investment. These capital-intensive, high-risk initiatives will create a worldwide finance gap that will need to be filled to reach net zero ambitions.&nbsp;</p><p>Global climate goals also depend on the decarbonisation of key sectors &ndash; food, water, waste, energy, materials, clean transportation and the built environment. For example, at least one-third of worldwide GHG emissions from human activities is estimated to come from food production, processing, transport and packaging, costing the environment about $3tn every year. Food systems continue to cause global nature loss and deforestation with serious consequences for humanity.</p>

<p>“At Temasek, we believe that a more sustainable future will require an economy-wide transformation of key sectors. As long-term investors, we recognise the importance of using catalytic capital to accelerate solutions in key sectors and achieve impact at scale.”</p><h2>Digitisation: fostering economic growth and bridging divides</h2><p>Digitisation is another megatrend that will transform business models and operations. Increased connectivity and access to digital services can foster economic growth, enhance education and healthcare accessibility, and bridge the digital divide. The digitisation trend extends to foundational technologies such as blockchain and AI, as well as advancements such as 5G and IoT. “These technologies bring about risks and complexities,” notes Chia. “Tackling challenges that surface as we digitise, such as the need for cyber security and deep-tech talent and capabilities, is equally crucial for harnessing the potential of digitisation.”</p><p>To exploit these opportunities, Temasek is investing in digital solutions and building its own specialised skills in the fields of artificial intelligence (AI), blockchain, cyber security, data and digital, and sustainable solutions. It has set up ventures and companies, such as Aicadium, a global technology company partnering with Temasek’s portfolio companies to co-innovate and scale AI products, and ISTARI, a global cyber-security advisor and educator that is supported by a comprehensive portfolio of solutions.</p>

<h2>Longer lifespans: challenges and opportunities in healthcare</h2><p>By 2030, <a href='https://www.who.int/news-room/fact-sheets/detail/ageing-and-health#:~:text=By%202030%2C%201%20in%206,will%20double%20(2.1%20billion)' target='_blank'>one in six people</a> worldwide will be 65 or older. As the global population ages, healthcare costs and the demand for elderly care services are expected to surge. New treatment approaches, innovative detection applications and preventative medicine are all key to reducing morbidity, complications, functional disabilities and mortality, says Chia. As a long-term investor, Temasek supports companies developing new therapies and innovative healthcare solutions that cater to the silver economy.&nbsp;</p><p>For example, the company is supporting Verily Life Sciences&rsquo; pioneering chronic disease prevention and management technology, which aims to improve the quality of healthcare and the overall well-being of the elderly. Another of Temasek&rsquo;s portfolio companies, BeiGene, focuses on novel cancer treatments.</p>

<h2>Sustainability as a pillar of investment decision-making</h2><p>Scrutiny from stakeholders and growing consumer pressure are pushing the public and private sectors to improve their ESG (environmental, social, and governance) performance globally. Consumers are voting with their wallets, aligning financial decisions with their ethical values. Temasek is resolutely committed to sustainability, says Chia. It is embedded in every facet of operations, from delivering sustainable value over the long term to engaging portfolio companies in building sustainable businesses. &ldquo;We recognise that ESG is a continuous journey. The ability for us to engage and effect positive change is a key consideration in our investment decision-making. As part of looking at how our investments can catalyse change, we consider how a company has been demonstrating its commitment over time to improvement, accountability and change,&rdquo; he says.</p><p>These structural trends offer a roadmap to a more sustainable, digitised and connected future.</p>

<p>According to Temasek, the company&rsquo;s portfolio exposure to these trends has been rising steadily since 2016, reaching 31 per cent as of 2023. Keeping pace with continued shifts in investment opportunities ultimately reflects a dedication to creating a better world for present and future generations.</p>

<p>The latest Intergovernmental Panel on Climate Change (IPCC) <a href='https://www.ipcc.ch/report/ar6/syr/' target='_blank'>report</a> makes it clear: we need rapid, equitable and inclusive decarbonisation of global systems to ensure a climate-safe – and climate-just – future by the end of the century.</p><p>The IPCC report also offers hope. It highlights the power of low-carbon technologies in the net zero transition – renewable energy, for example, is already <a href='https://www.ipcc.ch/report/ar6/wg3/figures/summary-for-policymakers/figure-spm-3/' target='_blank'>cost-competitive</a> with fossil fuels – and points out how investment, paired with strategic collaboration and enabling policy, is key to implementing decarbonisation solutions at speed and scale.</p><h2>Sustainability: the greatest growth proposition of the 21st century</h2>

<p>The investment proposition for sustainable development makes sense. As Dr Steve Howard, Vice Chair of Sustainability at Temasek, emphasises: “Sustainability is the greatest growth proposition of the 21st century. There are no returns on a dead planet.”</p><p>Despite <a href='https://www.morganstanley.com/ideas/sustainable-funds-performance-demand' target='_blank'>slightly underperforming</a> traditional funds in 2022, sustainability-linked funds continue to be in high demand, and environmental, social & governance (ESG) investing alone is <a href='https://www.pwc.com/gx/en/news-room/press-releases/2022/awm-revolution-2022-report.html' target='_blank'>expected</a> to almost double from US$18.4tn in 2021 to US$33.9tn by 2026.</p><p>“Sustainability is a fundamental megatrend that’s reshaping the business and investment landscape, as companies and investors work together towards big global sustainability goals. With 8bn people and the material intensity of the global economy, we need to take action right now. Most plastics have gone into the ocean over the past 10 years, and it took all of human history to produce the first trillion tonnes of steel, cement and concrete, but the next trillion will come by 2040,” says Dr Howard.</p>

<p>Temasek is one example of a global investment firm using the collective strength of its portfolio and network to catalyse positive social and environmental impact as well as delivering financial returns. The company’s purpose statement speaks to its commitment to keep working towards a better tomorrow “so every generation prospers”.</p><p>“We are a trend-aligned investor, that’s how we are approaching sustainability, with the understanding that it is going to reshape everything. All sectors – food, energy, mobility and the built environment – are undergoing radical transformations,” says Dr Howard. “We need to drive speed and scale, but I’m optimistic about the progress we’ve all made so far. We need to stop taking a short-term view. The evidence is clear that the global economy does best when it aggressively tackles climate change. Our collective future will be defined by our ability to look beyond short-term profits, especially in the near term.”</p><p>To meet its net zero emissions target across its portfolio by 2050 and drive climate action, Temasek is focusing its efforts on three key pathways to decarbonisation:</p><ul><li>Investing in climate-aligned opportunities</li><li>Enabling carbon-negative solutions</li><li>Encouraging decarbonisation efforts in businesses</li></ul><h2>Pathway #1: Investing in climate-aligned opportunities</h2><p>The sectors that account for the majority of global GHGs (greenhouse gases), including energy, food and transportation, also offer the most exciting opportunities for rapid decarbonisation and radical systems change. A core theme of Temasek’s investment strategy revolves around Sustainable Living, which has a pervasive impact across sectors, as well as on the business models of emerging and established enterprises. “There are seven key areas – water, waste, food, energy, clean transportation, materials and the built environment – that we focus our energies and efforts on when we look at investing into sustainable solutions,” says Dr Howard.</p><p>Some examples of Temasek’s investments in Sustainable Living include an end-to-end agritech platform for fish and shrimp farmers; a company developing technology designed to extend the shelf-life for fresh produce; and a company specialising in carbon emissions reduction technology, including green hydrogen, green ammonia, green methanol, blue hydrogen, circular plastic and renewable fuels.</p><p>“Either disruptions are already happening at scale, such as in energy, where you can see renewables dominating electricity generation, or innovations are rapidly advancing, such as smart, optimised agriculture or alternative proteins that will radically reshape our food systems,” says Dr Howard.</p><h2>Pathway #2: Enabling carbon-negative solutions</h2><p>Partnership and cross-sector collaboration are fundamental to achieving net zero GHGs by 2050.</p><p>“You need radical collaboration and new capabilities, not just what you've got inhouse. You do need partnerships and dedicated platforms to look at unlocking the investment opportunities in the medium to long term,” says Dr Howard.</p>

<p>In 2021, Temasek entered into a $500mn strategic partnership with LeapFrog, one of the longest-established impact investing firms. “We believe in the potential of impact investing to unlock capital to address the critical social and environmental challenges that the world is facing,” says Dr Howard. “Our partnership with LeapFrog will provide capital to anchor their future funds, and underscores Temasek’s commitment to investing for impact to shape a better world for our communities.”</p><p>Temasek has also teamed up with BlackRock to create a platform focusing on investments that advance decarbonisation solutions. The two companies collectively committed to invest in late-stage venture capital and early-growth private equity companies that specifically focus on carbon reduction.</p>

<p>“Some investors only look at how they reduce the carbon intensity of their portfolio, which is important, but this is much more about value creation, new investment opportunities and business innovation,” notes Dr Howard. “You can observe thousands of companies, led by passionate founders and entrepreneurs who are super excited about solving a problem. The large incumbents in the finance sector need to capture the fire and energy of those founders and entrepreneurs.”</p><h2>Pathway #3: Encouraging decarbonisation in businesses</h2><p>Whether due to regulatory pressures, financial drivers or consumer demand, many companies and multinationals with global supply chains have now set net zero commitments. But according to Climate Action100’s <ahref='https://www.climateaction100.org/news/climate-action-100-net-zero-company-benchmark-shows-continued-progress-on-net-zero-commitments-is-not-matched-by-development-and-implementation-of-credible-decarbonisation-strategies/' target='_blank'>latest net zero company benchmark update</a>, companies are not matching their progress towards net zero targets with credible decarbonisation strategies.</p><p>“No serious player in business or finance denies that climate and sustainability are material issues now, but it can be hard to transition, especially if deep changes to your business model or heavy capital are required,” says Dr Howard. “We can’t let perfect be the enemy of good. I am optimistic about where we go from here and how we can help these hard-to-abate sectors move forward.”</p><p>As part of its own sustainability journey, Temasek actively supports the business model transformation and carbon abatement actions of its portfolio companies. The investment company acts as a catalyst for change, bringing together relevant stakeholders and committing capital to support critical R&D in the transition to net zero. They also lean in to work with their portfolio companies where it makes financial sense to do so, rather than divesting, as the latter does nothing to reduce the world’s emissions.</p><p>“Private capital can play a catalytic role in accelerating sustainable solutions to create a positive impact that is greater than the sum of its parts, but it takes a real commitment to overcome the huge challenges and to focus on the opportunities,” says Dr Howard.</p>

<h2>A spotlight on nature and people</h2><p>At the heart of Temasek’s investment approach is people, and they cannot be left out of the climate change – or nature-loss – conversation. It is now common knowledge that the communities and countries who contribute the least to climate change will bear the brunt of its impacts, and that <a href='https://www.sei.org/featured/oxfam-carbon-inequality-era/#:~:text=%22Over%20the%20past%2025%20years,this%20scale%20is%20a%20cancer.' target='_blank'>wealth inequality and carbon inequality</a> are deeply interlinked.</p>

<p>“We have to focus on just transitions, and work to provide people and communities with the relevant skills and opportunities as industries undergo rapid change,” says Dr Howard. “It’s not about creating jobs in one part of the world and destroying jobs in another. We need to bring our global community together to reverse the decline in nature, and that involves all stakeholders.”</p><p>An area in which Temasek sees both growth and decarbonisation potential is nature-based climate solutions (NBS) such as reforestation or mangrove protection projects. The company has funded research led by the National University of Singapore’s Centre for Nature-based Climate Solutions to understand how, for example, blue carbon – or carbon captured via ocean-based initiatives – can mitigate climate change in south-east Asia. This research will develop a knowledge database of blue carbon stocks in the region and a toolkit for better monitoring, reporting and verification.</p><p>“All of us have roles to play to create a virtuous cycle, whether individuals, governments, academia, businesses or investors,” says Dr Howard. “It’s essentially an ambition loop. When everyone leans in and makes larger commitments, formulating bigger plans and taking bolder actions, that’s where we can collectively create value, drive innovation and lead the changes we need.”</p>

<p>Evolve or die: that is the clear message from PwC’s <a href='https://www.pwc.com/gx/en/issues/c-suite-insights/ceo-survey-2023.html' target='_blank'>2023 CEO survey</a>. Almost 40 per cent of the 4,410 respondents believe their organisation will not be economically viable 10 years from now unless they break away from business-as-usual and transform operations to meet rapidly evolving and interconnected global challenges. With five key megatrends weighing on the minds of CEOs around the world – identified by PwC as climate change, technological disruption, demographic shifts, a fracturing world and social instability – how can investors support the radical transformations and disruptive business models needed to build a resilient, thriving future economy?</p>

<h2>Digital disruptors</h2><p>Temasek is one future-focused investment firm viewing megatrends as opportunities to drive positive global change. “We seek not just to discern the road ahead but also to anticipate developments that lie around the corner,” explains Chia Song Hwee, Deputy Chief Executive Officer, Temasek. “We do this by embracing technological advancement in Web 3.0 or Industry 4.0, aided by workforce development in a rapidly changing world.”</p><p>As an investor that believes in purpose before profit, Temasek embraces the notion of catalytic capital that goes beyond mere financial returns; the firm seeks to generate a positive impact on people, societies and the natural environment. “We deploy financial capital to promote growth and innovation that will ultimately deliver long-term sustainable returns,” says Chia. “We catalyse innovation through a combination of venture building, fund investing and direct investments, and seed and develop platforms to address gaps in the marketplace.”</p><p>Through its capital, it is developing expertise on the megatrend of disruptive technologies, specifically around the horizontal enablers of AI, Blockchain, Cyber security and Data & Digital (ABCD). Temasek believes that ABCD innovations will transform sectors, disrupt business models for the better and create a more connected world.</p><p>Temasek’s initiatives in ABCD will also provide insight into the threats and opportunities within its existing portfolio, while guiding investment decisions for financial returns. “Our platforms across the ABCD ecosystem play a catalytic role in accelerating solutions by aggregating talent, forging collaborations across borders and providing the capital needed to underpin large investments,” says Chia.</p><h2>A is for AI</h2><p>The rapid progress of generative AI will transform work across industries, with around 40 per cent of all working hours being impacted by large language models (LLMs) such as ChatGPT-4, according to an Accenture <a href='https://www.accenture.com/content/dam/accenture/final/accenture-com/document/Accenture-A-New-Era-of-Generative-AI-for-Everyone.pdf' target='_blank'>report</a>.</p>

<p>“Temasek is committed to the deployment of human-centric and responsible AI for better business outcomes and for the good of the broader community,” says Chia. “We contribute to efforts to enhance the Singapore Model AI Governance Framework and are on the Advisory Council on the Ethical Use of AI and Data, which was established in 2018 to advise the Singapore Government on ethical policy and governance issues arising from the use of data-driven technologies in the private sector.” The firm also participates in the Singapore Computer Society's AI Ethics and Governance Certification Committee, advocating for necessary training and certification for professionals.</p><p>To build deep expertise and empower companies to accelerate the application of AI technologies, Temasek launched <a href='https://aicadium.ai/' target='_blank'>Aicadium</a>, a global AI Centre of Excellence, in 2021. Aicadium is partnering with companies to enable better commercial outcomes and to enhance productivity and safety of employees through AI solutions. A leading aviation company deploys Aicadium’s computer vision technology to detect potential safety hazards and reduce manual tasks performed by engineers and technicians, thereby increasing productivity and overall service quality.</p>

<h2>B is for blockchain</h2><p>Blockchain technology is used across industries to increase trust, security, transparency and data traceability. It can also provide access to finance in different ways beyond traditional systems. Blockchain is more than cryptocurrency, with which it is typically associated. The potential applications of the technology go far beyond mining and exchanging digital coins.</p><p>In the blockchain space, Temasek has identified opportunities in cross-border payments, tokenisation of traditional assets, identity and data. For example, together with DBS and JP Morgan, Temasek founded <a href='https://www.partior.com/' target='_blank'>Partior</a>, a blockchain-based technology provider enabling the next generation of cross-border payments and value exchange. In 2022, Standard Chartered was named as a fourth founding partner.</p><h2>C is for cyber security</h2><p>The dark side of digital transformations and increasingly intelligent systems are cyber security threats and illegal access to – and use of – sensitive information. In 2022 the FBI reportedly <a href='http://www.ic3.gov/Media/PDF/AnnualReport/2022_IC3Report.pdf' target='_blank'>received</a> more than 800,000 cyber security complaints, resulting in losses of more than $10bn. To build cyber security capabilities, Temasek set up <a href='https://istari-global.com/' target='_blank'>ISTARI</a>, a cyber risk management platform. “ISTARI brings together a network of experts who help other companies – including our portfolio companies – build up cyber resilience and mitigate cyber security risks,” says Chia.</p><p>The platform also gives companies access to solutions and talent they would not be able to access on their own, given how difficult it is for single companies to invest significantly in cyber. Temasek also set up Ensign InfoSecurity, one of Asia’s largest, pure-play end-to-end cyber security service provider. Ensign InfoSecurity supports its clients through the provision of cyber security advisory and assurance services, architecture design and systems integration services, and managed security services for advanced threat detection, threat hunting and incident response. Underpinning these competencies is in-house R&D in cyber security. “Ensign seeks to empower and instil confidence in public and private companies in their cyber security posture by continuing to push the boundaries against the backdrop of an ever-evolving threat landscape,” says Chia.</p>

<h2>D is for data & digital</h2><p>With the impact of digitisation now reaching every aspect of how we live, digital transformation capabilities are vital for companies to drive productive outcomes. “Digital competencies are key to creating social and economic value for Temasek and our ecosystem,” says Chia. “Investments in data & digital directly enable transformation and generate impacts that permeate sectors and markets.”</p>

<p>Data & digital-focused investments are foundational both in enabling disruptive tech and in building disruptive business models. Temasek and UST have partnered to set up <a href='https://www.temus.com/' target='_blank'>Temus</a>, a company focused on digital transformation solutions for the private and public sectors, with customers from a range of industries across Singapore including financial services and insurance, healthcare, education, consumer goods, telecommunications, infrastructure, energy and waste management, among others.</p><p>“Digital transformation requires mindset change, and often involves business and process transformation. Temus differentiates itself by helping clients through their digital transformation journeys from conceptualisation to design, development and implementation, while placing an emphasis on outcomes,” says Chia. “We believe that successful transformation begins and ends with people. Through Temus’s Step IT Up technology talent conversion programme, the company provides training to convert non-tech talent into digital professionals, addressing the shortage of deep tech skills in the market.”</p>