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Singapore SME business sentiment on the rise: survey
BUSINESS sentiment among Singapore SMEs (small and medium enterprises) has risen, at least according to this year's Singapore Chinese Chamber of Commerce and Industry's (SCCCI) annual business survey. This finding comes in spite of tough conditions for SMEs here such as global political risks, higher business costs and a tighter labour market.
At the SCCCI's annual SME conference and infocomm commerce conference on Wednesday, SCCCI president Roland Ng San Tiong said there has been an upturn for SME business sentiment in Singapore, and that the findings of the SCCCI's annual business survey were highly encouraging.
While the complete findings of the survey would be released only in October this year, Mr Ng revealed that 67.7 per cent of the 710 respondents reported an increased or stable revenue. This was up from the 63.7 per cent reported in last year's survey. This is in spite of 72.3 per cent of the respondents saying that they face higher business costs, compared with 62.3 per cent last year.
When asked about business sentiment for Singapore SMEs, Association of Small and Medium Enterprises president Kurt Wee said there were positive signs such as business initiatives and other measures being rolled out, which fosters greater connectivity and increases productivity.
For example, at the same event Minister for Communications and Information Yaacob Ibrahim said seven memoranda of intent (MOIs) had been agreed between the Infocomm Media Development Authority, telecommunication and financial institutions. The aim of the MOIs would be to provide SMEs easier access to digitalisation technologies to expand their digital capabilities, especially for cybersecurity and data analytics.
However, Mr Wee also told The Business Times about some of the difficulties that SMEs have to deal with, such as non-economic factors such as current political risks and global uncertainties, as well as economic constraints such as higher business costs, the increasingly tight labour market and digital disruption.
He added: "I don't think business sentiment has improved evenly across all sectors, but there should be no further downsides. I think things are more or less flat for now." He noted that businesses in some sectors - such as oil and gas, and construction - were finding it especially tough.
Mr Ng said it was important for businesses to utilise new technology and explore new markets for them to be successful. "While many of our businesses are still in the traditional sectors, they must take disruption and the digital economy seriously.
"At the same time, a number of new technologies have emerged, such as the Internet of Things, virtual reality, artificial intelligence and data analytics, including the related issue of cybersecurity."
One reason that some SMEs show positive prospects may be the increased investment in research and development (R&D) undertaken by them. Finance Minister Heng Swee Keat said also on Wednesday at the annual Leaders in Science Forum that R&D investments by SMEs grew 7 per cent yearly from 2010 to 2015, more than double the 3 per cent yearly rate in the previous five-year period.
An example of a business which invests in technology includes Aitech Robotics and Automation Pte Ltd, which provides complete robotics solutions to a variety of businesses ranging from the food and beverage (F&B) sector to industrial sectors such as warehousing and logistics. Its chief financial officer-designate Leo Boon Yong said business sentiment for his firm has been good, and added that businesses that leverage technological innovations such as IT, cloud computing and robotics stood the most to gain going forward.
CEO Eric Lee Poh Cheong said the firm has no shortage of customers as their automated robotics can be used in many industries including the F&B industry, the service industry and heavy duty industries as businesses in these sectors involve logistical and repetitive tasks which can be done by robots. And for non-technology companies such as chair maker Secretlab and F&B establishment Aloha Poke, both have leveraged technology and report healthy business activity and positive business sentiments.
Secretlab co-founder Alaric Choo said: "Our business outlook has been positive by far. We, however, do not take this for granted and keep customers coming back by ensuring our products remain top quality. It is vitally important for companies, big or small, to identify and adapt to the latest technological changes and trends. For example, we work closely with Google and Facebook to stay ahead of the current digital trends and explore how we can best utilise them."
Aloha Poke co-founder John Chen said: "Profits at all five of Aloha Poke's outlets continue to remain solid due to strong brand recognition, good cost controls and efficient service delivery. Rental and manpower will continue to remain as challenges for the F&B sector. Aloha Poke has effectively managed these costs by going digital and adopting an online ordering platform in partnership with DBS FasTrack." He added the firm is also working with Deliveroo to create a Deliveroo-only kitchen to service the east coast of Singapore, where he said it would not have been feasible to open a traditional brick-and-mortar outlet.
Mr Ng said: "Our SCCCI survey has shown that, compared to last year, sentiment is much better as businesses feel that the worst is over. So this is the time for them to get up and look at new business models, go overseas, or go digital."