Techblog
Singapore Budget 2017 Special: SMEs react to budget
SMEs continued to receive a lot of attention in the 2017 budget, with initiatives targeted at better equipping them for an uncertain economic future. Budget 2017 will support Singapore SMEs in dealing with some short-term challenges but was more geared toward helping SMEs adapt to long-term changes. What do SMEs think about the budget?
This year’s budget, announced by Finance Minister Heng Swee Keat on February 20 has received mixed reactions from Small and Medium-sized Enterprises (SMEs).
SME owners feel that despite slow growth and creeping unemployment amid persistent global uncertainties, there are minimal fixes that would alleviate short-term concerns. However business owners praise some of Budget 2017’s long-term solutions.
“Apart from the increased corporate income tax rebate, we unfortunately do not see much within the budget to alleviate our short-term concerns in the construction industry. We are very excited about the long-term initiatives such as the Industry Transformation Maps [roadmaps to transform at least 23 industries]. Every industry has to evolve and companies that do not will bear the risk of disruptions in the industry that make them irrelevant”, says Martin Gui, Managing director at interior fit-out company Facility Link.
Low Cheong Kee, managing director of Home-Fix would like to see more and immediate measures targeted especially at the retail sector.
“Consumer demand is depressed. We’d have liked to see some relief in cost in terms of occupancy and the foreign worker levy. The long term measures such as expanding overseas are good but it’s more of a long-term plan and requires preparation from SMEs as well as the government. It is essential and any SME will understand that the local market is too small. Any support coming from the government on this front is helpful”, says Mr Low.
International Partnership Fund
The government has been encouraging businesses to scale up globally and establish a strong presence in overseas markets. To support that, a new International Partnership Fund has been announced. This $600 million fund will co-invest with Singapore-based firms to help them scale-up and internationalise.
Homebakee, a baking company driven by local artisanal bakers, will be making use of the International Partnership Fund to build its business in the United States and potentially Europe.
Denis Edward, owner of Homebakee, notes: “The details have yet to be fully revealed. I expect many to take these opportunities to explore beyond the small Singapore market. In many ways these measures do not reduce risks for companies per se - venturing into new markets is often a risky and costly process. But these measures offer a platform and some cushion for companies to take the step”.
National Jobs Bank and SkillsFuture Leadership Development
“We would utilise the National Jobs Bank to complement our recruitment process, as well as the SkillsFuture Leadership Development Initiative to prepare our next generation for the future economy.
The National Jobs Bank will be made more useful for jobseekers and employers. The government will work with private placement firms to ensure that professionals are matched to the right jobs.
Meanwhile the SkillsFuture Leadership Development Initiative will support companies to train Singaporean leaders by sending them on specialised courses and overseas postings. The government is expecting to develop 800 potential leaders over three year.
Go Digital
Many SME owners agree that in order to be competitive and save costs, businesses have to digitise workflows. The government will introduce the SMEs Go Digital Programme to help them build their digital capabilities with an $80 million fund. 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.
Low Cheong Kee of Home-Fix is planning to use the government’s support to go digital.
“We have already embarked on a new ER (Enterprise Resource) project. But I think there is room to really interface everything, especially in areas of CRM (customer relationship management). It’s a slow and tedious process. The government could help us with the process. Therefore the government scheme is coming at the right time. However we have to see more details”.
Summary
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The new International Partnership Fund will co-invest with local firms to help SMEs scale up and internationalise
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Increased funding for training as well as an enhanced National Jobs Bank is expected to give more support to a skilled workforce
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SMEs Go Digital Programme is expected to help SMEs build their digital capabilities.