BUDGET 2024 – due to be delivered on Feb 16 – will hopefully have measures to help small and medium-sized enterprises (SMEs) go abroad despite geopolitical uncertainty, as well as pursue sustainability for future resilience, said a senior OCBC executive.

In an interview with The Business Times, the bank’s head of global commercial banking Linus Goh said that despite the uncertainty in markets such as China and the US, internationalisation is still worth pursuing. But this also means that SMEs might need more help as a result, he said.

Meanwhile, sustainability may not always bring immediate revenue gains, but it is nonetheless an imperative, he said.

Goh also proposed consolidating government grants to make it easier for SMEs to apply.

For instance, grants and schemes that defray the costs of equipment or digital tools can be bundled with those that provide related training and skills development, he suggested.

Training should go together with such investment, so that SMEs can leverage their new tools more effectively. “How many can really say that they’ve made it count? I think that’s the hard measure,” he said.

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Expanding abroad

One major theme of 2024, said Goh, is continued global uncertainty. Contributing to this is the fact that the world’s three most populous democracies – India, US and Indonesia – will be holding their presidential or general elections in the coming months.

SMEs with plans to enter these specific markets may therefore be more cautious and adopt a wait-and-see approach, he said.

In the face of this, Goh hopes that Budget 2024 will provide more guidance for SMEs to go abroad.

Internationalisation efforts are no longer just the province of large firms, but that also means more help is needed.

“We see more smaller companies, more serial entrepreneurs going out into the region earlier, so there will be smaller companies seeking help,” he said.

In addition to financial support, the government can conduct more trips for businesses to connect with Enterprise Singapore’s overseas offices, especially as these have been opening in more locations, he said.

Advice and aid from such on-the-ground government offices will also help to mitigate some of the economic and political uncertainties abroad, he said.

Even companies that are not internationalising face external risks, such as unresolved US-China tensions that could affect supply chain decisions, and global shipping disruptions from the conflict in the Red Sea.

“SMEs are price-takers, right? As long as the problems become more pervasive… and people start ratcheting up costs, it will hurt them,” said Goh.

Going green

A second major focus for 2024 should be sustainability, said Goh.

In this area, Budget 2024 could help by extending and expanding relevant schemes like the Energy Efficiency Grant, which was introduced in September 2022 and is due to expire in end-March this year.

The grant provides up to 70 per cent funding support for pre-approved energy-efficient equipment, and is available to SMEs in the food services, food manufacturing and retail sectors.

Opening up the grant to SMEs in other industries will help them address high utility costs, and the reductions in energy usage will also be in line with national sustainability objectives, Goh said.

At the same time, providers of such energy-efficient equipment – many of which may be SMEs themselves – will benefit from increased sales.

This will help such green service providers build wider and deeper business capabilities, he said.

Another helpful policy that the upcoming Budget could introduce is to simplify existing emissions standards, and provide grants that help SMEs adopt emission data tracking solutions.

These could include tools for measuring a company’s carbon footprint, energy, and fuel consumption.

“If more support were to be given for businesses across sectors in that way, it makes it a lot faster for decisions to be made,” he said.

SMEs would also benefit from more education on how to tap relevant resources and to make their first forays into sustainable practices, he added.

This is especially important as it is urgent for SMEs that are suppliers to build up their own green credentials, ahead of their larger clients making this mandatory.

“While there is a good momentum, there is a big pool of SMEs, so more needs to be done,” Goh said.

For more of BT’s Budget 2024 coverage, go to bt.sg/budget24