Techblog
Only 14% of local SMEs intend to internationalise - QBE study
A recent QBE study of more than 400 firms has highlighted the reluctance of Singaporean SMEs to expand internationally. It found that just 14% of domestic firms intend to internationalise while nearly half strongly prefer to keep their business within Singapore for the foreseeable future. At a time when emerging economies are offering so much opportunity, why are firms here so uneasy about chasing growth in new markets?
There are several reasons. 42% of those firms who indicated their preference to stay local said they didn’t have the finances to expand, while 38% cited unfamiliarity with specific standards and processes in foreign markets as a major concern. Other prominent barriers included the level of competition overseas, regulatory and legal compliance costs and political instability.
Based on this, it almost appears that firms need clearer, simpler direction on how to enter and understand uncertain markets. But it may not be that they need more resources so much as better pointing them towards the information they need. The best advice we can give SMEs? Ask for help. There are several information portals and industry bodies out there to help companies understand what they’re getting into, while multi-country insurance protection plans also help to mitigate the risks of expanding.
While expansion may not be popular, firms actually expressed a positive attitude toward their prospects in Singapore. Half of the firms we spoke to felt the local economy will improve over the next year, while 44% feel sales will increase – an improvement on the results we’ve seen when discussing the economy with SMEs in previous years.
One of the most important questions we asked was around technology – and, positively, SMEs are taking action. 95% of firms have either already transitioned to digital technology or have expressed a desire to do so, citing a desire to improve productivity, reach more customers and improve service.
However, any uptick in technology adoption carries questions around how safely it is being integrated. 35% of smaller SMEs admitted to having no cyber protection at all. Although the SMEs recognise the importance of investing in security measures, it seems they are only likely to invest in protection measures after encountering a problem.
The same can be said for Workplace and Safety Health (WSH) insurance. Only 59% of the firms were fully knowledgeable of the protection plans open to them, despite 31% of them having WSH-related accidents in the past year. As Singapore moves towards a Total WSH approach, we need to ensure all companies understand the importance of prioritising safety in the workplace.
On this issue, and all other concerns for that matter, insurers can help firms better understand the business landscape and achieve certainty in an uncertain context. The key, though, is that SMEs understand the resources at their disposal – and that they aren’t afraid to ask for the help they need.
To read the full press release, click here to visit QBE's website.
QBE Insurance (Singapore) Pte Ltd is a member of the QBE Insurance Group, Australia’s largest international general insurance and reinsurance group. It is one of the top 20 insurers and reinsurers worldwide. Today, QBE is listed on the Australian Securities Exchange and is headquartered in Sydney. We employ 14,500 people globally and have operations in 37 countries. .
Established in 1891, QBE Singapore is a trusted provider of specialist expertise and professional insurance services. Our insurance specialists develop leading-edge products that are client-focused, delivering cover tailored to deal with everything from complex risks to more simple and straightforward insurance needs.