You are here

SINGAPORE'S FUTURE ECONOMY

For trade groups, a mounting test of relevance

Ineffective leadership, insufficient capacity, and infighting pose issues

37505848 - 18_02_2016 - pixgenerics.jpg
There are more than 350 trade associations and chambers (TACs) in Singapore - an impressive figure on the surface, but numbers alone do not tell the whole story.

Singapore

There are more than 350 trade associations and chambers (TACs) in Singapore - an impressive figure on the surface, but numbers alone do not tell the whole story.

Even as TACs are being called upon by the government to drive the transformation of their respective sectors, the picture that is emerging is less encouraging, with a few notable exceptions. Ineffective leadership, insufficient capacity, and even infighting in some cases, seem to be common issues.

In fact, TACs must be willing to restructure themselves if they hope to stay relevant in the new economy, observers told The Business Times, stressing that it can no longer be "business as usual".

sentifi.com

Market voices on:

"You may strengthen TACs all you want, but to be honest, if they are ineffective, whatever cash or support you pump into them is not going to trickle down to the ground," said independent consultant Malminderjit Singh, former executive director of the Singapore Indian Chamber of Commerce and Industry.

One criticism is that some TACs have failed to stay relevant to evolving industry needs. In the retail space, for instance, members from the Singapore Retailers Association (SRA) want to see the group do more to help firms internationalise - especially given the limitations of Singapore's small domestic market.

Said Andy Chaw, chief executive officer of shoe distributor Star Three Sixty Holdings: "SRA can afford to do better. So far its services are focused on helping SMEs (small and medium-sized enterprises) improve their businesses, but it's just in the local market. For years it's been about training courses and schemes to improve the quality of staff and services, but going forward, can it do more?"

He thinks SRA should set its sights beyond Singapore, and advocate for retailers looking to expand abroad - perhaps by identifying trusted goods and services providers in target markets.

"Of course the question then is whether our local associations have the talent and experience to provide support to help SMEs going overseas too," added Mr Chaw.

Others accuse SRA of speaking out only on behalf of certain retailers - in particular, watch shops and businesses on Orchard Road - essentially reflecting the narrow interests of some members.

"It doesn't seem to have been of much help, to be very forthright. It doesn't quite have that weight or gravitas to really speak out on behalf of retailers," said the former general manager of an apparel company who declined to be named.

In the electronics space, too, members of the Association of Electronic Industries in Singapore (AEIS) are hoping for more help from the body with overseas expansion.

Expressing the same desire as Mr Chaw, CEI Contract Manufacturing executive chairman Tien Sing Cheong told BT: "I wish more Singapore companies would want to work together as a team to venture out. The association should see how it can facilitate more collaboration because I don't see that as a very serious concerted effort right now."

Other industry sources told BT that AEIS is in danger of falling behind the curve - especially in comparison to its Taiwanese or Korean counterparts, which are known to set up formidable local consortiums to capture overseas business.

Feinmetall general manager Sam Chee Wah, meanwhile, finds AEIS's mandate too broad to be effective for firms like his. He is more active in the Singapore Industrial Automation Association (SIAA), which deals with robotics and boasts greater specialisation.

Indeed, as stronger TACs pull ahead and weaker ones lose relevance, DBS economist Irvin Seah thinks firms will increasingly switch their TAC allegiances. "If companies find that their association is not really helping them to develop further, they can always join another business association," said Mr Seah.

Another frequent - albeit whispered - criticism of TACs is the perceived lack of fairness and transparency. One perennial gripe, for instance, has to do with exco or council members getting choice booths at trade shows, while regular members are left to ballot for spots.

Several business leaders also flagged the constant battle for supremacy within TACs' leadership - an unwelcome distraction that not only serves to lower the group's effectiveness, but poses difficulties for leadership renewal as well.

Part of the problem is that honest feedback is rarely heard. Numerous business leaders BT spoke to were unwilling to be quoted on the record, fearing a backlash. "Tolong ah, I still have a business to run, you don't say I say okay," said one business leader.

Politicking pettiness aside, however, a serious issue plaguing TACs is their lack of internal capacity - which in turn has knock-on and cyclical effects on poor service offerings, and the inability to attract and retain talent.

Said Mr Singh: "The smaller chambers, especially, lack the capacity to do anything meaningfully. While they have one eye on providing value to members, really a lot of resources are spent on keeping the other eye on how they can be sustainable and survive.

"It's a big hindrance because if they can get more resources, they can hire more qualified and experienced people, and they can take their focus away from seminars and training courses - which are really designed for them to earn some revenue ... If all that happens, then I think they can be more significant players."

The government, for its part, is setting aside up to S$30 million over the next five years to support TACs and develop their capabilities. It will also be seconding up to 20 public officers to interested TACs. But some observers feel such support should be tied to how much effort TACs are making to renew themselves.

To be sure, examples of good TACs exist. The Singapore Food Manufacturers' Association (SFMA) and the Singapore Furniture Industries Council (SFIC) are just two examples of niche but effective TACs, which are often applauded for their creativity in helping their members level up and stay competitive.

The Singapore Business Federation (SBF) has been actively leading overseas business missions, to help local companies tap markets abroad. But SBF is in the unique position of having the benefit of a large base from statutory membership - all companies with a paid-up or authorised share capital of S$0.5 million and above have to join.

Unfortunately, progressive TACs seem to be in the minority for now. CIMB Private Banking economist Song Seng Wun thinks the landscape will take a while to evolve. "This is part of the upward learning curve that Singapore has to go through. It's very much still a work in progress."

Another observer who requested to remain anonymous put it less kindly: "What really needs to be done is for all these chambers to be cleaned up. Leaders need to be sacked so that good, capable people can take over. This would do the entire ecosystem a huge favour, because I don't think people actually realise (how poor) the current landscape is."

READ MORE:

Powered by GET.comGetCom