You are here
Going global: Many Singapore businesses do get it, says IE
THERE doesn't seem to be a shortage of Singapore companies - both the bigger boys and the newer start-ups - that are ambitious and hungry enough to want to expand abroad these days.
International Enterprise (IE) Singapore, the government agency that partners local firms to venture overseas, says it helped to secure more than 450 deals around the world last year, the bulk of it in China and South-east Asia.
That same year, some 37,000 local companies of all sizes and across sectors - 80 per cent of them small and medium enterprises (SMEs) - benefited in one way or another from the statutory board's broad-based assistance. Among the many notable homegrown brands that have gone global is Bee Cheng Hiang, the popular barbecued pork chain that now has branches in 11 overseas markets; it opened its first Tokyo outlet last October. Shopback, a e-commerce marketing platform, sought IE's help and connections to break into the lucrative Taiwan and Indonesian markets.
The fact that scores of businesses are eager to expand their footprint beyond the Republic is a big plus for IE Singapore's big push towards greater internationalisation, said the agency's chief executive officer Lee Ark Boon.
"It's important for companies to look from the outside-in, rather than inside-out. Internationalisation isn't about treating overseas markets as an extension of Singapore," the 45-year-old told The Business Times in an exclusive interview.
"I don't think that is sustainable, because you won't be meeting the customers' needs if you're not physically in that particular market."
His advice for those who still prefer the comfort of operating out of their home base in the Lion City: Think about the advantages of having a physical presence elsewhere.
He said: "Your costs may not be the lowest in Singapore, no matter how much you spend on automation. The fact is, in some other cities, the energy, manpower and land prices are way lower. If your market is there, you might as well produce there and reduce the whole risk."
He added that companies should ideally see the global market as their main source of growth and expansion, given Singapore's relatively small size and limited room for expansion.
"Singapore is just too tiny. Our population is around 5.6 million, and there are very few markets elsewhere that are smaller than us; many are two, three, four times larger. That's why you should look outside before looking inside."
At the end of the day, Mr Lee said, IE's goal is to work with companies with high potential and growth, and which can bring economic value back to Singapore.
But even as IE goes all out on this front, the agency also keeps an eye on the backward linkages to the Singapore economy and to Singaporeans, he said.
This includes whether a company retains its key decision-making personnel here and continues to make use of the capabilities of Singapore's financial centre.
"We want to retain the very high-value work in Singapore, even though the manufacturing can and should be overseas. We want to keep the key jobs here," said Mr Lee.
"As we help you, we want you to be conscious that you are still a Singapore-based company, and we still want you to have a linkage back to Singapore, to retain that identity and origin."
IE's roots date back to 1983, when it was still known as the Trade Development Board. It was restructured and renamed in 2002, but he noted that there is still a misperception that the agency is merely a grant administrator.
"The strength of IE is not in giving grants, but in securing deals for companies. Understanding markets, facilitating and securing deals - these are the critical parts of our work, and these are multi-faceted and resource-intensive," he said.
Still, scores of firms do manage to get some financial help in one way or another when they work with IE Singapore. Mr Lee disclosed that the agency does have a budget - a "very small" sum compared to what other government schemes have - to disburse to eligible applicants.
IE Singapore said in February that more than 10,000 companies received a total of S$73.4 million in grants last year; the agency approved 1,500 applications from companies for the Market Readiness Assistance (MRA) grant, 43 per cent more than in 2015.
A fifth of the successful applicants were firms making their maiden foray outside Singapore - in China, Indonesia, Myanmar, Vietnam and India.
About 22 per cent of all MRA grant approvals were for activities in global online retail/e-commerce platforms, 86 per cent higher than in 2015.
Mr Lee said that IE Singapore is in a "happy position": more companies are coming forward on their own accord, persuaded by the value of spreading their wings overseas.
"We are focusing on those that come to us, these are the pro-active ones that are willing, able and ready. We want to work with those who are hungry to do well," he said.