SBF’s Response to the SME Development Survey 2015
Attributed to Mr Ho Meng Kit, CEO of SBF
11 November 2015 [Singapore] – For the past four years, we have been associated with DP Information Group in this survey. As there is no good comprehensive data on the SME sector in Singapore, this survey provides an important insight. About 70% of SBF’s 21,500 members are SMEs. Many of the respondents are our members and the results therefore reflect the views of our SME members.
I will make a few observations on this year’s survey findings:
- In general, there are no surprises in this current survey as SMEs are still in the midst of restructuring which could take some time to complete. There is no apparent sharp change in status of SMEs i.e. they are not getting much worse, nor are they getting better.
- One area of some concern is the drop in the proportion of younger SMEs. Only 10% of all respondents have been in existence for fewer than 10 years compared to 37% in 2012. As three to 10 years is usually the “make-or-break” period for SMEs, there is a need to further analyse this drop. Why are SMEs not able to make it through this challenging period?
- Manpower and business cost challenges continue to weigh down on SMEs, although to a lesser extent compared to last year. SMEs seem to have adapted to the constraints as more are taking steps to improve productivity. In dealing with the tight local manpower situation, SMEs have to accept to pay higher wages to attract locals. However, going forward, SMEs have indicated that they still need foreign workers in view of the tight labour market, particularly for jobs that are shunned by the locals. Ironically, based on observation, SMEs are hiring Employment Pass holders to get around the quota issue.
- SMEs recognise the need for employee training but face difficulties in sending their staff for training because of their lean manpower situation. In view of this, the Government should consider supporting on-the-job training and in-house training in their Continuing Education and Training schemes to help these SMEs.
- Internationalisation is an important growth driver for SMEs. While more SMEs do business overseas, the number with physical presence in other countries has declined. There is scope for the Government and trade associations and chambers to introduce the opportunities made available through the ASEAN Economic Community, the Trans-Pacific Partnership and other free trade agreements (FTAs) to our SMEs. There is a need to explain these to SMEs in simple terms so that they can organise themselves and benefit from these FTAs.
- Budget 2016 Recommendations – Since its inception in 2011, the SBF-led SME Committee (SMEC) has put up Budget Recommendations to Government every year. The findings of the SME Development Survey are important and SMEC will further analyse them in making its recommendations for Budget 2016.
- Helping more SMEs to access to government procurement – SBF is working with MTI and several government agencies to raise awareness and to facilitate greater SME participation in government procurement. For SMEs seeking to establish credibility, build and strengthen track record, and create a brand name, participation in government procurement can help them expand their business and also open doors to opportunities overseas.
SBF will be organising a Government Procurement Fair in collaboration with several government agencies, on 26 November 2015. The objective of the Fair is to educate SMEs on the government procurement process and policies involved. During the fair, SMEs who have been successful in government procurement will share their success stories and experiences. There will also be sector-specific clinic sessions such as those for the construction and ICT industries. More information on this event can be found on the SBF website.
- Supporting business collaborations – SBF has been appointed by SPRING to run the Partnership for Capability Transformation programme since late 2014. The programme aims to help SMEs build capabilities and access business opportunities by supporting collaborations between SMEs and large organisations. With our sizable membership of SMEs and large companies, we can provide a platform for to foster such collaborations.
SME Development Survey 2015 Media Release
SME Development Survey 2015 Media Statement by SPRING