BANKS in Singapore should continue to support innovation in small-medium enterprises (SMEs), said Deputy Prime Minister Tharman Shanmugaratnam on Wednesday.
Speaking at the Infocomm Commerce Conference and SME Expo organised by the Singapore Chinese Chamber of Commerce & Industry (SCCCI), he called on banks to take a medium- to long-term view of SMEs despite the economic slowdown, highlighting that such an approach is important not just for the economy and SMEs, but for the banks themselves.
Mr Tharman said: "This is because it is during difficult times that innovations arise… The banks must be on the lookout for companies that are being created and for those with new business models and technologies."
Not every company will survive due to the nature of the startup business, but he believes that it still pays to support innovation in the long run. He pointed out that it is during hard times that one should invest in capabilities for the long term, and this is the attitude that the banks should take.
Apart from supporting innovation, Mr Tharman added that banks should be mindful of the cashflow difficulties of SMEs during a slowdown as they are affected the most.
He noted that it is fortunate that bank lending has continued even in industries that are going through tough times, such as the marine sector.
He pointed out that non-performing loans in Singapore's banks have also been low and customers in general have been making their payments on time, including SMEs.
"So the situation is quite healthy and we must keep it that way," he said.
Aside from the role of banks, the government also intends to play a greater role to help coordinate and match the supply of new technologies to the business demands of SMEs.
Mr Tharman said: "Our basic challenge in Singapore is not whether we have the schemes, but how to match supply and demand."
Instead of simply matching existing, ready-made technology with SMEs, he explained that the government intends to cultivate the demand and supply of innovation in a deeper way.
This will be achieved through the enhancement of the Technology Adoption Programme (TAP), which was started in 2013.
The first strategy by the government is to use private-sector system aggregators to work with SMEs. This entails identifying their needs, aggregating their demands and then working with the research institutions to translate their solutions in ways that are relevant to the SMEs.
Secondly, the government is looking to broaden the supply of new solutions and technologies under TAP. Apart from public-sector research institutions, it will bring in polytechnics, universities and the private sector and tap their innovations.
Next, the government intends to improve coordination sector by sector. "For each sector, we will work closely with the trade associations and chambers, with the unions, with the companies themselves, to bring together all our efforts," Mr Tharman said.
This will be done for all 20 sectors in the economy.
He also took the opportunity to reiterate that for innovation to take flight, people must be at the heart of it all.
"It's not just a technical matter, not about how we use our SkillsFuture Credits or the right courses. It's a whole ethos that we have to build up in our society, that involves respect for every skill . . . It involves everyone, and in the enterprise, it starts with management. We must improve how we manage people in our companies."
He brought up surveys done over the years, that indicate that there is a significant segment of the workforce who are not engaged at work. He stated that this is, first and foremost, the responsibility of leadership.
"Make every job a fulfilling job - that has to be our first priority in management."
On the part of individuals, he urges the development of a "culture of mastery", no matter what job the individual is taking on.
Finally, Mr Tharman concluded that Singapore companies are known abroad to be competent, reliable and corruption-free. The Singapore brand is one that benefits businesses, but these traits alone will not be good enough, going forward.
"In the future, when people think about Singapore, they must have this image of people who are highly skilled, and enterprises that are innovative and extensively internationalised. That's our future."