Entrepreneurs can drive Singapore's growth if they begin working together

A RECENT study commissioned by FedEx showed that Singapore's small to medium sized enterprises (SMEs) generate more revenue from exports than those of any other country. This comes as no surprise since Singapore is home to a vibrant and talented community of entrepreneurs building successful and outward-looking businesses.

In fact, SMEs make up the vast majority of companies in Singapore and account for over half of the nation's GDP. Yet these businesses attract less than 20 per cent of total private investment and often struggle to make the transition from exciting, entrepreneur-led businesses into "grown-up" multinational companies.

Entrepreneurs face a number of challenges when growing their business and creating value. First, raising money for smaller businesses is really hard. There is a huge sea of capital waiting to be deployed into businesses, but small businesses are just not big enough or are considered too risky to attract it. SMEs are also often private, entrepreneur-led companies and the lack of share liquidity puts off many investors who wonder how they will get their money back. Secondly, you need to be big to get big. This is called the scale paradox and it means that to land the biggest margin contracts companies need to be perceived as big enough to handle them, regardless of talent or expertise within the business.