top of page
  • Writer's pictureThe Convergence

Building our SMEs for the future

Commentary | Lian Jiade, Managing Editor (Opinion)

Even as we celebrate our bicentennial year and marvel at how far Singapore has transformed from a fishing village to an Asia economic powerhouse today, the harsh reality is that the current hostile macroeconomic environment and pace of technological disruption has made our economic success increasingly fragile.

Today, Singapore faces economic threats from multiple fronts such as a slowing Chinese economy, skills obsolescence and stiffer competition from neighboring countries that are becoming more innovative and skilled.

In light of these developments, the focus of this year’s budget on building a “strong, united Singapore” paid special attention to developing our SMES to ensure they are able to thrive in the new Industry 4.0, where digitisation, automation and advanced analytics will play a key role across the business value chain.

With more businesses adopting advanced analytics, automation and artificial intelligence, it is becoming increasingly important that our SMES also embrace these new technologies to remain relevant and operate efficiently in a competitive business environment.

There is a sense of urgency for our SMEs to quicken their steps on restructuring and embrace digitalisation so as to streamline operations. This is particularly so for SMEs who have ambitions to expand or are sub-contractors in the supply chain of the larger MNCs.

As such, schemes such as the Productivity Solutions Grant (PSG) and Automation Support package (ASP) have their active dates extended to provide financing aid for SMEs keen to adopt emerging technologies.

In addition, the SME Go Digital programmewas also re-designed to give SMES more access to pre-approved and relevant digital solutions in new key areas such as cyber security and cloud-based technologies.

Besides from helping our SMEs transform in the new digital age, another focus of this year’s budget was to help our SMEs expand overseas and seek new growth opportunities.

With Singapore having one of the highest human capital in international rankings and the future economy becoming increasingly knowledge-driven, there is a push for our SMES to be bolder and venture aboard to overseas markets.

To catalyse on this expansion, the government has consolidated all state-supported financing schemes to be under the new Enterprise Financing Scheme to reduce the opacity of such schemes.

The Scheme also increases the risks-sharing portion of loans the government bears from the current 50% to 70% to stimulate banks to grant more credit to SMES eager to expand.

Furthermore, to tap on Singapore’s deep capital markets to reduce the burden on state coffers, the government has been steadily pushing for more funding to come from private players to support burgeoning SMEs.

This includes moves such as the simplification of the regulatory environment for venture capital managers to the establishment of the Grant for Equity markets Singapore (GEMS) in early January.

Others include the increase equity research coverage and funding of listing expenses on SGX to channel capital to our SMES by improving their visibility on potential investors radar.

I am optimistic that in the future when we think of Singapore home-grown companies, it will not be limited to DBS, CapitaLand and Keppel who hail from traditional industries such as financial services, real estate and engineering.

With the future growth sectors likely to come from new areas such as financial technologies, consumer digital platforms and precision manufacturing, Singapore’s knowledge-driven economy coupled with its highly educated workforce puts the nation in an advantageous position to develop her own SMEs to become future champions in the international stage.

I am optimistic that in the future when we think of Singapore home-grown companies, it will not be limited to DBS, CapitaLand and Keppel who hail from traditional industries such as financial services, real estate and engineering.

Instead, new emerging brands will come from the industries of the future.

Similarly, just like how we have been able to “punch above our weight”, we will be able to do so for the next 100 years and become a global leader of the new economy and a technological hub of the world.


About the author: Jiade is a year 1 accountancy student with a keen interest in the national affairs of Singapore. He is an avid reader of domestic political news and keeps up to speed with ongoing developments. Jiade believes that all Singaporeans should see themselves as stakeholders of the country and actively participate in shaping the political discourse of Singapore.


bottom of page