In defence of dreaming small: micro-SMEs in the modern city

FOR decades, Singapore’s government has exhorted its small and medium-sized enterprises (SMEs) to dream bigger: Invent something new, if possible, or at least scale up and go abroad.

There is no shortage of support for that journey, from tailored business advice in SME Centres, to various grants, schemes and loans.

The enduring hope is for more home-grown success stories: SMEs that grow into large local enterprises, and perhaps even become international names.

Not every SME will undergo that transformation. For some, it is not for lack of trying; for others, expansion might simply not be a goal at all.

One might draw a parallel with a Ministry of Manpower report, released on Tuesday (Apr 14), that showed that about a fifth of resident workers here are overqualified for their jobs – and for the vast majority, this is by choice.

Some degree-holders are eschewing professional or managerial jobs for roles that do not require a degree, for reasons ranging from job stability to finding the work interesting.

Similarly, some SME owners might choose not to chase expansion, and instead be content with making a living and serving the local community. These could be family businesses without heirs, or entrepreneurs who open new businesses without lofty ambitions.

It takes all sorts

Of course, the country will suffer if the spirit of entrepreneurship is channelled only into hyperlocal domestic businesses. No one would argue that such a situation is ideal.

The imperative to nurture local champions that can make it overseas – while sustaining headquarters at home – is not merely about some abstract notion of national pride, but very real economic concerns.

While investments from foreign multinational corporations (MNCs) may be a key driver of Singapore’s growth, over-reliance on them is always risky.

No matter how attractive Singapore is as an investment destination, or how established a foreign MNC may be in the city-state, there is always a possibility of departure.

Home-grown MNCs and large local enterprises provide stability for both gross domestic product and jobs. They may occasionally move some functions out of Singapore and into cheaper markets, but their roots – and higher-skilled roles – remain at home.

The government’s drive to get SMEs to grow is both understandable and valuable.

But as long as there are entrepreneurs who are hungry enough to seek a larger fortune on the world stage, Singapore can afford to have others who are content with staying home.

If anything, a proliferation of SMEs that are micro-by-choice – as opposed to striving and yet failing to grow – would be a sign of a mature economy, with consumers who have enough disposable income to keep such businesses afloat.

In a landscape of mega-brands and massive chains, it is also independent micro-SMEs that give a city its character.

These could be heritage brands that see no need to scale up, artsy endeavours such as arthouse cinemas or hipster cafes, or businesses where a small-scale operation is the point, such as artisan ateliers.

And after all, even as such small businesses stay firmly rooted here, some may yet bring in foreign funds – in the form of tourist spending.

On social media platforms – not least China tourist favourite Xiaohongshu – it is not just household names such as Ya Kun Kaya Toast or Mr Coconut that get recommended to visitors, but photogenic hipster spots where the appeal lies precisely in how hyperlocal they are.