Building a conducive ecosystem for SMEs
While Singapore has done much to ease the burdens on small businesses, perhaps it's time to place even more focus on SMEs from a policy point of view.
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SMALL and medium enterprises are important job creators in the Singapore economy and their resilience is essential to sustainable economic growth. The government has been driving a strong emphasis on the development of the SME sector. Singapore has the most SME-friendly government, according to the Global SME Performance Review for 2013/2014 conducted by the Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants (IMA). The country has also been chairing the Asean SME Working Group since June 2014 and will lead fellow Asean members into the realisation of the Asean Economic Community for SMEs in 2015.
Despite the government's focus on the SME sector, SMEs in Singapore continue to be challenged by manpower issues, increasing competition and high rental costs, according to the 2014 SME Development Survey. In fact, the SME1000 rankings published by DP Information Group in January show that the top 1,000 SMEs in Singapore have seen a year-on-year dip of 8.7 per cent and 0.8 per cent in combined sales, and combined profit, respectively.
To sustain growth and compete more effectively, SMEs need to restructure, revamp their business models and build up new capabilities. These include pursuing productivity improvements, strengthening technology, embracing innovation and expanding overseas.
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