Techblog
Singapore Budget 2017 Special: New investments to help SMEs go digital and global
The Singapore government will invest in new funds to help SMEs embrace digital technology and increase their presence internationally. We found what SMEs think about the government's plan for businesses to go digital and internationalise.
Will SMEs take up the recent long-term measures introduced by the government to help businesses scale up globally and establish a strong presence in overseas markets?
To support that these objectives, a new International Partnership Fund was announced last week during the budget. This $600 million fund will co-invest with Singapore-based firms to help them scale-up and internationalise.
Additionally, the government wants to enhance the existing Internationalisation Finance Scheme, which would help local small and medium-sized enterprises (SMEs) take on more overseas projects.
Another new scheme that the government introduced was the SMEs Go Digital programme. Over $80million will be invested into the new programme designed to support SMEs to embrace digital technology.
Led by agencies such as the Info-communications Media Development Authority (IMDA) and SPRING, the SME Go Digital has three components:
-
SMEs will get step-by-step advice on technologies that can help them grow further. This will go hand-in-hand with the sectoral Industry Digital Plans. Sectors where digital technology can significantly increase productivity will get particular focus. Those include the retail, food services, wholesale trade, logistics, cleaning and security industries.
-
SMEs are also able to get in-person help at SME Centres. The initiative will include the set-up of an SME Technology Hub and also complement the existing network of SME Centres, where businesses can get free advice. Advice will be available on off-the-shelf technology solutions that are pre-approved for funding support.
-
Advice and funding support will be available to SMEs who are ready to test emerging Info-communications and Technology (ICT) solutions. More funding will be added toward training cybersecurity professionals.
Mr Andrew Tan, managing director at office furniture solution provider d’Doubles, is intending to use both schemes in its growth strategy.
“Both programmes are relevant in today's globalised business arena if the company wants to stay competitive and have long-term growth. Going digital will allow the company to be more informed and be able to make use of the data to make good business plan and decisions. Digital and internationalisation both work together and should be implemented concurrently,” Mr Tan said.
Mr Wei Chan, managing director of The Pine Garden bakery, notes that encouraging companies to go digital and internationalise is a great idea, however both measures do not adequately address many SMEs concerns.
“The whole process of digitalisation and automating processes comes with a huge cost. Let’s say: I have a robotic arm cutting my cake. This is very futuristic. The cost of maintaining such a project though is super high. And it’s not worth it because our volume is small. And every maintenance is going to cost me a lot of money. For micro-SMEs there is no way they can handle the whole process. The scheme is great but it has to dive deeper and consider every aspect of the digitalisation process especially for smaller SMEs before implementing a broad nation-wide initiative”.
Regarding internationalisation, Mr Chan suggests to give SMEs more structural support rather than just financial support.
“Trying to move out overseas requires a solid base in Singapore. The trying economy is putting many companies on hold. Everybody is looking at bottom line rather than top line. Added to that are constraints in manpower. Truth be told it’s not that simple”, Mr Chan said.
Mr Denis Edward, owner of Homebakee, a technology company in the baking industry expanded the business to New York last year and is currently looking to grow and move to other cities in the Unites States.
He said: “I have to be confident of expanding overseas regardless of the Singapore government grants - otherwise we will not succeed. But I am glad that there will be some support for us as we take on our expansion challenge”.
“SME Go Digital is useful I think because it serves as a one-stop shop. [However] the quality of the advice SMEs receive will depend on the quality of the staff on the ground giving the advice,” he added.
Mr Tan at d’Doubles suggests that it is important to understand the initiatives and then strategise according to business needs.
“Make use of the digital initiative to reach out to more customers and improve the productivity and efficiency of the organisation. Leverage on the overseas initiatives to quicken the expansion plan overseas”, he notes.
Summary
-
SMEs Go Digital Programme is expected to help SMEs build their digital capabilities.
-
More Schemes will be available to help local firms expand overseas. This includes the new International Partnership Fund, which will co-invest with local firms to help them internationalise.