Evolve or die: that is the clear message from PwC’s 2023 CEO survey. 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?

Digital disruptors

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.”

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.”

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.

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.

A is for AI

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 report.

“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.

To build deep expertise and empower companies to accelerate the application of AI technologies, Temasek launched Aicadium, 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.

B is for blockchain

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.

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 Partior, 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.

C is for cyber security

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 received more than 800,000 cyber security complaints, resulting in losses of more than $10bn. To build cyber security capabilities, Temasek set up ISTARI, 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.

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.

D is for data & digital

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.”

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 Temus, 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.

“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.”