Digitalisation has improved business despite ‘high cost’, say 67% of Singapore firms: survey
But 73% also cite high cost as a barrier, making it the biggest perceived roadblock to technology adoption
SINGAPORE companies have improved their business performance, with digital transformation helping to optimise operations despite the “high cost” involved in technology adoption, a survey by the Singapore Business Federation (SBF) has found.
Some 67 per cent of the 529 companies surveyed said digitalisation has helped optimise operations, and 58 per cent said it has helped to reduce operation costs, indicated the Smart-Enabled Businesses Edition of SBF’s National Business Survey 2024.
Nearly three-quarters (73 per cent) of the businesses cited “high cost” as a barrier, making it the biggest perceived roadblock to technology adoption. This is an increase from 64 per cent in last year’s survey.
Expensive licensing payments for commercial use of intellectual property was also cited as a challenge for 47 per cent of respondents, up from 31 per cent previously.
Another difficulty lay in the upskilling of staff to keep up with new technologies, as highlighted by 47 per cent of businesses this year, compared with 29 per cent in the 2023 survey.
For now, businesses are prioritising their digital transformation efforts primarily on operational processes and their information technology systems. Products or services, as well as customer experience, trail behind slightly.
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Companies also hold a similar attitude towards artificial intelligence (AI): 57 per cent of respondents said it improved their operational efficiency and was time saving, even if 66 per cent named the “high costs of implementation” as a barrier to AI adoption.
In general, AI has had a greater impact on large companies than on small and medium-sized enterprises (SMEs).
To address their digitalisation challenges, 69 per cent of businesses said financial support for digital advisory and project implementation services would help.
Other forms of helpful support include a central reference for up-to-date resources, workshops and a platform to share best practices and new technologies, more than half the respondents said.
As for government support, two-thirds said they found the Productivity Solutions Grant most useful in supporting their digitalisation journey. This was followed by the Enterprise Development Grant for 64 per cent of respondents, and Start Digital for 54 per cent of them.
On average, businesses said they devote about 11 per cent of their annual budget to digitalisation. The proportion is smaller for large companies, at 8 per cent.
Cloud, e-payments and cybersecurity are the top three technologies of choice, with more than 60 per cent saying they have adopted these technologies and will continue to do so.
Over the next 12 months, companies are most keen on adopting artificial intelligence, data analytics and Internet of Things.
More than two-thirds named immersive media and blockchain as technologies they do not intend to adopt, or plan to discontinue; 45 per cent cited e-commerce.
Overall, 70 per cent of businesses believe that emerging technology, such as artificial intelligence and augmented reality, is most likely to have an impact on their business. This is a jump from just 35 per cent in the 2023 survey.
Another area of concern is cybersecurity, although large companies are more conscious of this, at 73 per cent, compared with 68 per cent for SMEs.
Large companies are also more concerned than SMEs about reducing their carbon footprint through sustainability technology; 60 per cent of large companies raised this as a concern, compared with 43 per cent for SMEs.
At a media briefing on Thursday (Sep 26), SBF chief executive Kok Ping Soon said: “We wanted to see how we can use this survey to better support our businesses and our members in their transformation journey.”
He said this is why the SBF partnered technology industry trade association SGTech to set up a new smart technologies action committee, to be chaired by former SGTech chairman Wong Wai Meng.
Wong said the committee will have a closer look at the survey results, analyse its limitations and the key areas that deserve further attention.
Koh added that a deeper dive would help the federation to shape its recommendations for the next Budget.
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