SBF SME Committee Recommends Support for Future Growth Areas and Immediate Term Recovery for Budget 2022
Wednesday, 15 December 2021 [Singapore] - The Singapore Business Federation (SBF) SME Committee (SMEC) submitted its recommendations for the Singapore Budget 2022 to the Government on 29 October 2021.
Budget 2022 Recommendations
For Budget 2022, the SBF SMEC has put forth 16 recommendations under four key themes. The recommendations aim to provide companies with the necessary support to ride on the local, regional, and global growth momentum to achieve success and resilience, and to help companies transition into recovery and growth through the provision of immediate-term support.
Theme 1: Capitalising on Sustainability for Growth
Sustainability is increasingly seen as a new engine for growth. Yet, according to a recent survey by the Sustainable Living Lab in collaboration with SBF and other partners, more than half of the SMEs surveyed cited the lack of financial resources and a difficult business environment as key challenges in transitioning towards sustainability. Companies, particularly the resource-stretched SMEs, will need more support for the transition towards greener business models.
A more concerted, whole-of-government approach can be adopted. Currently, sustainability related programmes and incentive schemes are decentralised across several agencies and there is no one-stop resource available to aid SMEs in pivoting towards greener business models
The SBF SMEC Recommends:
• The Government supports up to 50% of qualifying cost to adopt pre-identified green solutions and incentivises the use of electric vehicles (EVs) for logistics and business operations through tax and COE rebates as well as the development of EV charging infrastructure.
• The expansion of existing internationalisation schemes to provide additional support when companies export green solutions to tap into overseas demand.
• The appointment of a lead agency to guide SMEs in understanding and adopting various green solutions.
Theme 2: Scaling Up with Intangible Assets
Data extracted from the National Survey of Research, Innovation and Enterprise in Singapore (2019) indicated that the private sector was able to generate $5.02 in revenue for every dollar of R&D expenditure. There is scope for broader and stronger public-private engagements to connect the private sector to the suite of A*STAR offerings to unlock the potential of public sector intellectual property (IP) to catalyse product development, manufacturing, and other significant economic activities. According to an Ocean Tomo study, some 90% of the enterprise value of companies in the S&P500 comprise of IP and intangible assets (IA), a more than five-fold increase from just 17% in 1975. This further underlines the importance of IP and IA in the global economy as companies leverage on innovation and brands as a growth strategy.
As part of economic transformation, there are opportunities to help companies move up the value chain and increase their competitive advantage, such as new product or service creation through licensing of IP or developing their own and maximising the value from IP.
The SBF SMEC Recommends:
• The Government expands existing grant support for local IP search and application, third party costs incurred to identify potential partners and/or customers (B2B or public sector) including licensees/franchisees, and drafting of franchising, licensing agreements to help businesses to extract the potential value of their IP assets to scale their business for local and international growth.
• Public sector research agencies, institutes of higher learning and public research institutes to broaden and deepen the awareness of their innovation programme offerings and strengthen their collaboration with industry partners and stakeholders like Trade Associations and Chambers (TACs) to catalyse the unlocking of commercial potential in public sector IPs, promote joint public-private sector innovation projects and better identify areas of research with industry applications.
• The Enterprise Financing Scheme - Venture Debt Programme to be augmented by increasing the risk co-sharing for companies that leverage strongly on IA/IP as part of their business strategy to encourage businesses to strengthen their IA and IP regime.
Theme 3: Building Cyber Resilience
The past two years had seen accelerated trends in digital adoption and technological transformation as businesses leveraged technology for operational continuity amidst the pandemic. With more SMEs embarking on digitalisation, there is an increased focus on cybersecurity today as cyber threats and risks have increasingly surfaced.
Many of the resource-strapped SMEs may not have the resources or know-how to implement effective threat detection or respond to attacks. While there are currently pre-approved cybersecurity solutions under SMEs Go Digital to support SMEs in this effort, what is lacking is a shared service that can respond swiftly to companies dealing with cyber-attacks and provide assistance to walk them through the processes of eradicating the threats.
The SBF SMEC Recommends:
• The Government sets up a shared expert advisory service to assist companies with business continuity and crisis management in event of a cyber-attack, to aid recovery and prevent reputational damage to business.
• The introduction of a cybersecurity assessment tool for companies to diagnose their cyber-readiness and recommend suitable PSG-approved cybersecurity solutions based on their requirements.
• The Government develops a nation-wide annual cybersecurity training and assessment for all employees in SMEs as a basic level of cybersecurity knowledge and awareness can prevent them from becoming victims of cyber threats and attacks.
Theme 4: Restrengthening Package
The journey towards “living with COVID” will be an evolving and challenging one. It is not expected to be smooth as we will need to continually adapt to best cope with operating safely and responsibly in an endemic landscape. Enterprises, particularly those in certain consumer oriented businesses, will continue to face uncertainty, cost pressures and business sustainability risks.
The SBF SMEC Recommends:
• The Jobs Support Scheme (JSS) support at 25% for F&B, gyms, and fitness studios, performing arts and education, retail, cinemas, museum, art galleries, historical sites, family entertainment and tourism be extended by three more months after the Stabilisation Phase to help businesses stabilise and prepare for recovery.
• Extension of the Temporary Bridging Loan Programme (TBLP) till 31 March 2023 and for the Government to provide up to 90% of risk sharing to help businesses cope with the rising costs in operating in an endemic landscape.
• The Government helps businesses defray the cost of bringing in foreign manpower which are currently at elevated levels due to additional testing and quarantine requirements.
• An enhancement of transitional support for businesses to operate in an endemic environment by subsidising Antigen Rapid Test (ART) test kits.
• Expanding the supported activities of the Market Readiness Assistance Scheme (MRA) to beyond business development and marketing.
• Removing the revenue eligibility criteria of the MRA and extending the MRA to non-SMEs till 31 March 2023.
• Extending the moratorium for contracts like the COVID-19 Temporary Measures Act.
Mr Lam Yi Young, CEO of SBF, said, “As we prepare to enter into 2022, there is greater optimism among businesses for recovery and growth, despite the continued challenges posed by COVID-19. The SBF SME Committee has put together recommendations to address both the immediate-term challenge of business recovery and the emerging opportunities to tap on for future growth. SBF will continue to work closely with our partners and stakeholders from both the private and public sectors to support companies in emerging stronger together.”
Mr Kurt Wee, Chairman of SBF SMEC, said, “Since the beginning of 2020, it has been a challenging and volatile journey that has brought forth a series of painful and unstable environments for businesses. The business community is very grateful for the packages released by the government over the last two years. Although there is still a certain level of uncertainty, industries are hopeful that it is reaching the bottom of the cycle and things will turn for the better. Having a Restrengthening Package will complement the efforts put in the past 20 over months by providing a timely tailwind for enterprises as we brace ourselves for the final burst to recovery.”
Read the full list of recommendations here.