SBF’s Response to the SME Development Survey 2018
Statement from Mr Ho Meng Kit, CEO, SBF
5 December 2018 [Singapore] - The SME Development Survey 2018 marks the seventh year that SBF has been partnering DP Information Group to gather important insights on our SME sector. The results of this survey are especially significant to us, as about 80% of SBF’s 25,800 member companies are SMEs. As most of the survey respondents are our members, this set of results provides a good overview of our SME members’ sentiments.
The following are our observations on this year’s survey findings:
- In general, there are no surprises and the survey results are consistent with our understanding of the SME sector performance. The business outlook ahead is challenging due to the ongoing US-China trade tensions. However, SMEs are continuing with their restructuring and transformation efforts to address the changing business landscape and this will take some time to complete.
- Manpower issues relating to manpower costs (36%), difficulty in hiring staff (28%) as well as difficulty in retaining staff (11%) weigh down on SMEs. However, SMEs have been adapting to these constraints by taking steps to digitalise and improve productivity. Given the ongoing economic restructuring and the changing demand for jobs and skills, it is also important that businesses stay agile and responsive to market demands.
- It is heartening to note that 31% of the SMEs have adopted at least one digital solution that improves their core business and 70% have indicated that they will be implementing digital transformation initiatives. However, more companies can step up on this front. Companies can, and must, transform to find new ways of doing things across business functions, activities, processes and models, whilst continuing to offer innovative products and services. They must continue to fully leverage the opportunities of digital technologies and their impact in a strategic and prioritised way. The current technological disruption that we are witnessing has lowered the barriers for SMEs to do so more quickly and successfully.
- We note the slight dip in the proportion of SMEs with overseas engagements, from 47% in 2017 to 45% in 2018, although revenue from these engagements are observed to account for an increased percentage of SMEs’ total revenue (>30% to 70%, up 6%). SMEs must continue to set their sights beyond our shores and expand to overseas markets to tap the available growth opportunities, including those in ASEAN. This is important to overcome the limitations of Singapore’s small domestic market. We encourage our SMEs to make effective use of the more than 23 Free Trade Agreements negotiated by our Singapore government to better compete internationally. These agreements also offer SMEs certainty in their trade and investments against today’s environment of rising trade tensions and protectionism.
- Support for business transformation & skills upgrading: In support of our Government’s efforts, SBF organises an annual Future Economy Conference and Exhibition (FECE) to raise awareness of the 23 Industry Transformation Maps, their horizontal strategies and the associated tools available to help businesses stay ahead of the competition and be future-ready. The FECE is complemented by other programmes and training that SBF offers, for example, sharing sessions by prominent business leaders and senior corporate executives, design thinking workshops, and Professional Conversion Programme for Southeast Asia Ready Talents. Our training arm, the Singapore Business Federation Institute (SBI), helps our local companies build capabilities and achieve inclusive and quality-driven growth as Singapore restructures. Annually, SBI conducts over 200 training programmes which are well attended by close to 2500 participants across industries and business functions.
- Support overseas expansion: To venture overseas, SMEs can take advantage of our regular business missions to Asia, Middle East, Africa, Europe and the Americas. SBF led nearly 350 senior business representatives to the recent China International Import Expo. Businesses can also sign up for our popular FTA training course to understand and tap onto the benefits of Singapore’s free trade agreements.