SMEs should focus on transformation, building stronger capabilities: Chee

ADVANCED estimates released last week pegged Singapore's GDP growth at 0.7 per cent for 2019, a result of the slowdown in the global economy. But as the US and China move towards alleviating trade tensions through a "very large and comprehensive" Phase One trade deal slated to be signed off on Jan 15, an improvement to the global economy might be at hand.

Delivering his keynote address at the SGSME.sg seminar Possibilities 2020 on Friday, Senior Minister of State Chee Hong Tat called for caution: "We won't know what the details are of the deal until it is signed. It is better for us not to jump the gun, to go too far ahead in terms of what exactly will happen, but it is better that they are talking, and finding solutions to move forward than to continue to fight."

Contrasting the doom and gloom, the outlook for the Asia region is bright with an expected 5.1 per cent growth that outpaces other advanced economies. The digital economy alone in South-east Asia is poised to contribute S$400 billion to the region by 2025.

"Whether in good times or tough times, it is important for SMEs to press on with enterprise transformation and build stronger capabilities," said Mr Chee.

Improving productivity, upskilling workers, adopting technology solutions and expanding into overseas markets were identified as areas in which SMEs can make headway to better tap growth opportunities.

Although implementing these changes may seem too daunting for smaller SMEs that cannot afford the upfront costs, Mr Chee assured that the government will provide help and support on the journey to better productivity.

"Our SME Centres, which are done in collaboration with the key Trade Associations and Chambers, are available islandwide with business advisers who will be able to diagnose your business needs and recommend ways to transform your businesses," said Mr Chee.

Foodgnostic, which runs the Cat & the Fiddle brand of cheesecakes, was cited as an example of how SMEs of all sizes may take on this process of transformation and capability building. Through Enterprise Singapore, the company automated its production of cheesecakes, scaling to 2,000 cakes a day. This increase in productivity has allowed the company to internationalise and capitalise on regional growth opportunities.

Businesses may benefit from the strong Singaporean brand, but need to be wary when seeking addressable markets abroad. "Singapore has a strong brand name, which stands for quality and trust. These intangible assets can be destroyed quickly if we are not careful," said Mr Chee, advising business owners to uphold and strengthen the brand through their actions overseas.

The Ministry of Trade and Industry (MTI) also assists SMEs in translating research and development investments into commercial value. SMEs seeking to innovate can work with the 10 Centres of Innovation (COI), which are partnerships between selected polytechnics and research institutes.

The COIs provide technical expertise and equipment to co-develop new and improved products and services with SMEs, increasing potential revenue.

A*STAR also seconds research scientists and engineers to SMEs to support in-house research projects under the Technology for Enterprise Capability Upgrading (T-Up) Scheme.

The regulatory framework will need to evolve in tandem as businesses innovate and adopt novel business models. "On our part, the government is committed to fostering a pro-enterprise environment and ensuring that we have sufficient regulatory agility to support companies that wish to try out new business ideas," said Mr Chee.

The Pro-Enterprise Panel (PEP) under the MTI proactively seeks feedback from businesses to streamline regulations, reducing compliance costs and supporting innovation for businesses.

Mr Chee cited cosmetic dental startup Zenyum as an example. Through the PEP, Zenyum requested and was granted subsequent regulatory approval from the Health Sciences Authority (HSA) to expand its product offering to include teeth-whitening products.

The HSA ruled that as long as Zenyum could ensure its consumers had consulted a registered dentist, whose approval would have been required for the teeth-whitening treatment, there was no need to impose further regulatory conditions.

"Achieving these win-win outcomes will require government agencies, companies and the Trade Associations and Chambers to work in close partnership," said Mr Chee.

"I encourage companies with innovative ideas to step forward to work with the PEP and our public agencies, so that together, we can find innovative ways to reduce compliance costs while safeguarding public interests and meeting our regulatory objectives."