TO STAY competitive on the global stage, Asian countries have to keep moving in the direction of knowledge, scientific excellence and innovation. But it will not always be a smooth journey. Let me highlight three broad challenges.

The first challenge is to ensure that everyone in a society benefits from the knowledge economy. Even as we strive to develop every individual's ability and talent, we know that those without the right skills will have an increasingly difficult time.

The premium on ability and skill is high and growing. IT is automating simple jobs. We already see automated check-out lines at supermarkets and touch-screen check-in kiosks at airports. In the coming decades, many more routine jobs will be replaced by computers or robots.

Overall the knowledge economy will be a boon for mankind, but individual workers will need the skills to do things which computers and robotic tools cannot do.

This is why we in Singapore are investing heavily in continuous education and training, to help vulnerable workers learn new skills, and master new jobs. It is also why we are emphasising quality education for all, and paying special attention to children from low-income families, so that we reduce the problem of poverty in the next generation.

Another challenge is the complete and instant exposure to an overwhelming torrent of information through the Internet and online channels. This brings great economic benefits, but it also causes people to respond to unfiltered, raw information or misinformation without the benefit of reflection or informed interpretation.

Furthermore, instant communication is not just about conveying information. Inflammatory opinions, half- truths and untruths will also gain currency through viral distribution. The online film Fitna, which has offended Muslims worldwide, is just the latest example of wrong-headedness - asserting the right to freedom of expression in democratic Holland while overlooking the costs, namely the stoking of hatred between devout Muslims and Christians.

Terrorist groups are using the Internet, too, to find recruits, spread their extremist ideologies and prepare attacks.

With satellite TV and the Internet, events are also magnified across a global listening board. We see this in the protests that have erupted during the Olympic torch relay.

The Olympics is China's coming-out party. They sent the Olympic torch overseas in what is described as a 'journey of harmony'. But not surprisingly, China's opponents see this as a golden opportunity. So as the torch travels the world, it has faced challenges at virtually every stop. Vivid TV images of demonstrators waving banners and making concerted assaults to snuff out the flame are beamed live around the world.

No protesting group truly expects that their public display of outrage at China's treatment of Tibetans or ethnic Han dissidents will change China's policy when it affects its core security concerns. They know no government can give ground on any core issue under such public duress, whatever the merits of the arguments. So whatever the intentions of the demonstrators, the people of China believe they want to inflict maximum humiliation on China.

The outrage in China, especially among the young, can be read on flooded Internet bulletin boards, all carrying virulent anti-foreign sentiments. Pity they are in unintelligible Chinese ideographs. Were they in the English language, young Americans and Europeans would realise that their displays of contempt for China and things Chinese will have consequences in their lifetime, well beyond the Olympic Games.

In this new environment of raw, unprocessed information with instant worldwide impact, it will not be easy to keep the public debate on a high plane, especially on controversial issues where emotions rather than reason prevail. This will change the texture of societies everywhere.

Societies will have to adapt and evolve defensive mechanisms and habits to thrive in these new circumstances. Amidst unceasing and bewildering changes, we will all the more need strong moral and social values that help us keep our bearings.

Finally, fostering a sense of national identity will be a major challenge, especially for small and open societies like Singapore. Globalisation and the knowledge economy have created a single worldwide market for talent. In every field, the most able people are in demand worldwide.

But to do well, a country needs a core of its ablest citizens, those with both the intellectual and social acumen, to play leadership roles in the economy, the administration, and the political leadership. Without that central core to take the country forward, the society cannot perform to its full potential.

More and more Singaporeans are going abroad, whether to study or work. We must accept this flow as a reality, and bring in talent to top up, and encourage Singaporeans who are abroad to eventually return and add to the vibrancy of their own society. We will need to create not only economic opportunities here, but also opportunities for people to develop their potential and express their human spirit.

Ultimately we must create an emotional attachment to the country, their family members, school and college mates, buddies in National Service platoons and friends, both to hold our own people and to get others to strike roots here.

Despite these challenges, Asia's transformation will continue. It will be powered by knowledge and ideas, and by billions of increasingly-skilled workers and entrepreneurs. The politics in Asian countries will inevitably change too. The outcome will not be determined by pressure from outside, but by the internal processes in these countries.

Not all Asian countries will effortlessly adapt to this new environment. But all will make the effort, several will excel, and many will eventually make the grade. Singapore will try its best to be among those who will succeed.

This article was first published in The Straits Times on Apr 12, 2008.