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This is How Singapore Technologies Engineering Ltd is Providing Environmental Solutions to Smart Nations

Singapore’s Smart Nation initiative was launched by Prime Minister Lee Hsien Loong in 24 November 2014.

The internet of things is a fundamental piece of smart nations. This could be a big opportunity. Research firm IDC believes the internet of things could generate as much as US$9 trillion of annual sales worldwide by 2020. And conglomerate Singapore Technologies Engineering Ltd (SGX: S63) has a foot in the door in this initiative.

Smart cities

Lee Fook Sun, Deputy Chief Executive Officer and President of ST Electronics (a subsidiary of ST Engineering), provided some details during its second quarter earnings briefing.

He talked about the importance of the smart nation program:

“Cities need to be smart because there are a lot of challenges with urbanization.”

“Urbanization brings along quite a lot of demand. As cities grow, you need to do certain things to make cities continue to be efficient, to be effective in the way they are being operated.”

Urban population in 2014 made up 54% of the total global population. According to Forbes , Singapore has the third highest population density with 8,000 people per square kilometer (km).

Environmental impact

The key pillar to smart nations, according to Lee, is connectivity and big data . The second pillar would be safety and security. The third is challenges in mobility. Lee believes that urbanites want all of the above and more:  

“People want the city to be clean. They want all the above, connectivity, safety, everything. But they also want the cities to be clean. So, when we talk about smart cities [and] urbanization, these are things that we are talking about.”  

“So, the question is, what is ST Electronics doing in all these areas?”

ST Engineering has a novel approach to environmental issues. It involves the use of satellites, as shared in the slide below:

2016-10-05-st-engineering-environment

Source: ST Engineering’s earnings report

Lee said:

“We are also working very hard, as you probably recall that we just operationalized the TeLEOS satellite. We have completed the entire in orbit test. So, the satellite is fully functional.”

“And we are beginning to sell the imagery.”

Lee talked about some of the uses of satellite imagery:

“So, this will be one area which again will be very useful for smart cities. Because it can be used for monitoring of environmental issues. Burning of forests, you can use the satellite imagery to monitor and manage all these issues.”

“We are also working with partners overseas to resell their products.”

In all, ST Engineering’s track record looks impressive but it is early days for the internet of things. Time will tell if ST Engineering will be able to carve out a place for itself in this emerging industry.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.