More help for SMEs in Singapore?
Finance Minister Heng Swee Keat’s Budget 2017 has placed a strong emphasis on helping businesses stay competitive and grow in an increasingly global marketplace. This is good news for SMEs in the country, as the government’s new financial plan should provide a boost to small businesses across many sectors on the world stage.
Helping Singapore SMEs Go Digital
Mr Heng has emphasized the importance of digital capability as the Singapore economy continues to mature. He says it is essential that SMEs in particular embrace the digital age and adopt new and innovative digital solutions. Digital technology has the power to transform all businesses, but many SMEs lack the capability to use digital technology.
The plan laid out in his budget aims to encourage this. As the world relies even more on digital technology, this will be highly beneficial to Singapore and its SMEs, so that they don’t get left behind on the world stage.
The new Go Digital Programme is a government ‘leg up’ for SMEs and an exciting new addition to a series of strategies to strengthen small and medium-sized businesses in Singapore. More than $80 million will be made available from the government to fund these initiatives. In addition to this Singapore banks have been outperforming recently and have rallied incredibly which Kelvin Wong, Analyst at City Index, attributes to higher expected interest rates and financial deregulations. This could mean increased capital and investment available for up and coming Singaporean entrepreneurs.
Industry Digital Plans
Simply throwing money at SMEs won’t guarantee success though. Therefore, Industry Digital Plans will be provided by the government to help businesses use technology at each stage of their growth. For SMEs with limited experience, this provides a real helping hand. Hopefully it will ensure that the funds are used in the most productive manner, making the most of digital technologies and expertise to compete on the international market. Otherwise there could be a lot of money wasted.
Sectors targeted by the Go Digital Programme include retail, wholesale trade, food services, logistics, security and cleaning. Mr Heng indicated that he felt these sectors were the ones where digital technology could make the biggest difference to productivity levels.
Network of SME Centres
Start-ups and SMEs can seek basic ICT help in person from SME centres, where advisors can offer help with everyday technology solutions. If businesses need more specialist advice, it will be made available from new SME Technology Hubs, which are being set up by IMDA and will complement existing SME Centres. SMEs can also seek advice and funding support for pilot ICT solutions already in place.
Corporations have also been included in the Go Digital Programme. There is support available for them to help adopt impactful and interoperable digital solutions. This is an excellent initiative to aid SMEs who may be lacking the knowledge. Plus, for corporations, extra assistance should ensure they push on in the global marketplace.
Mr Heng recognises that SMEs need to strengthen their data and cybersecurity, so the Cyber Security Agency of Singapore will be working with professional bodies to help increase cybersecurity and ensure business networks function smoothly.
The Singapore government is also keen to promote innovation in technology, and will be creating Regulatory Sandboxes where rules and regulation is suspended, so companies can experiment with FinTech platforms and self-driving vehicles. Innovation is essential in all markets, as it is new ideas and businesses that can really make a difference in many industries. FinTech is one of Singapore’s most successful sectors, so focusing on this seems like a good way forward.
A Tech Access Initiative is designed to help small companies build prototype products. The Agency for Science, Technology and Research (A*STAR) will work with companies, providing access to its advanced machine tools so small businesses can prototype and test. SMEs will also have access to the Headstart programme so they can co-develop intellectual property licences.
Most analysts and the majority of SMEs have welcomed the digital initiatives, as they say it fills a gap in the ecosystem, but some experts believe the measures don’t go far enough. There are still a few gaps and other ways to improve competitiveness. However, these changes are definitely a step in the right direction, and with a strong network of SME centres in place throughout Singapore, thousands of small and medium-sized businesses now have access to help as they work to digitise their businesses.
Other Government Initiatives to Help SMEs
Other measures designed to assist SMEs in Singapore include:
- Extension of the SME Working Capital Loan scheme will be continued for a further two years.
- The cap on Corporate Income Tax rebate has been raised from $20,000 to $25,000, with 50% tax payable.
- Wage Credit Scheme is to be continued.
- The Additional Special Employment Credit scheme will be extended to offset the wages costs of older workers, to help them stay in gainful employment.
All of these should ensure Singapore SMEs can truly compete in the global marketplace across the next few years at least.