Despite a testing year, SMEs embarked on approximately 12,000 upgrading projects
Despite a challenging economic climate that brought rising business costs and labour constraints, 2014 was a highly successful year for SMEs.
This was partly due to SPRING Singapore which, together with its partners, reached out to approximately 160,000 SMEs last year. About 9,000 SMEs embarked on 12,000 upgrading projects to boost productivity and competitiveness, and capture growth opportunities.
Ninety per cent of the companies that received support were micro or small enterprises. When their projects are fully implemented, they will inject $8 billion into the Singapore economy, as well as create 22,000 jobs.
“Last year was not easy for SMEs, but many rose to the challenge and took the initiative to develop new capabilities, improve productivity and find new avenues of growth,” according to Mr Tan Kai Hoe, SPRING Singapore’s Chief Executive.
“Over the course of the year, we spoke to many businesses and that has helped us understand the pain and the challenges SMEs face,” Mr Tan says. “Many understand the need to change and have prioritised productivity as part of their business strategy.”
Mr Tan stresses that despite increases in efficiency and productivity-related measures, SMEs need to keep developing new ways to grow their business further in 2015. As he puts it: “Efficiency will get you to a certain level of productivity, but beyond that it is important for companies to seek new avenues of growth.”
Related: 5 Growth Strategies For SMEs
Setting the Table for Success: Luzerne, a tableware manufacturer, transformed its business strategy to target new customers.
In 2014, more SMEs focused their energies on developing their human capital through the SME Talent Programme (STP). SPRING launched the STP in 2013 to help businesses build a talent pipeline for long-term business sustainability. The programme helped match more than 600 applicants and interns with SMEs last year. One success story is cables manufacturer, Keystone Cable, which attracted four polytechnic graduates to its ranks, bringing new perspectives and skills to support its business growth.
SPRING does not just assist individual companies. Encouraging strong partnerships with Trade Associations and Chambers is another key part of SPRING’s focus. SPRING’s collaboration with the Restaurant Association of Singapore (RAS), for example, has brought technological advances and efficiencies to the Food and Beverage (F&B) sector. This includes the implementation of shared services for food companies, such as outsourcing, and centralising dishwashing and ingredient preparation for greater efficiency.
Through partnerships with the Singapore Food Manufacturers’ Association, the Food Innovation and Resource Centre and the Singapore Productivity Centre, more than 1,000 food companies embarked on productivity projects last year.
Additionally, in 2014, more than 7,000 SMEs leveraged SPRING’s Innovation & Capability Voucher scheme (ICV) to improve their business – about 9,700 ICVs were given out in 2014, up from 1,738 in 2013. This boost comes after SPRING enhanced the ICV scheme to include Integrated Solutions – easy-to-adopt packaged solutions that help SMEs overcome common business challenges.
“New kinds of technology and new business ideas are disrupting existing businesses right now, so I think it is important for any small or big business to continue to leverage new ways to grow,” says Mr Tan.
Nature Vegetarian Catering is one example of an SME that leveraged technology to overcome a business challenge. Faced with manpower constraints and customer complaints about long waiting times, the company applied for the ICV to install a wireless paging system at its Jurong café to cut down its customers’ waiting time for service. As a result of the new system, Nature Vegetarian Catering has not only improved customer service, it has also reduced the number of staff it needs during peak periods and has redeployed them to its new Lavender branch.
A Solid Serving of Technological Support: Nature Vegetarian Catering weaved technology into its processes to get dishes to customers more quickly
Avenues For Growth
At the same time, many SMEs began to globalise their businesses. Many adopted international standards to boost their competitive edge as they venture into overseas markets. Last year, almost 400 companies adopted standards through SPRING’s support.
“Singapore has a good brand name for quality and excellence overseas, and SMEs can leverage this to enter new markets,” Mr Tan says.
For instance, looking to increase its market share, Seng Heng Engineering adopted the American Petroleum Institute Specification Q1 for a quality system for the subsea industry. It is one of 10 companies in the world which has attained this international standard. The local SME hopes the move will help it find customers in Brazil, India, Russia, the United Kingdom and the United States.
Stepping Up Outreach Efforts
SPRING is continually improving its operating processes so that SMEs can grow and succeed. Last year, it launched an online portal for submitting grant applications and other claims. It also enhanced its Micro Loan Programme, increasing government risk- sharing from 50 per cent to 70 per cent for young companies. This change was designed to make it easier for SMEs to obtain loans to grow their business.
SPRING also added two more SME Centres in 2014, bringing the total to 12 SME Centres across the island. About 22,000 SMEs were supported by these Centres last year, including Bok Sing Hardware Paints which expanded its customer base and increased its revenue after it made use of the SME Centre’s business advisory services.
Partnerships And Start-up Support
SPRING’s goal is to build up a pipeline of strong, competitive enterprises, and work with partners such as the newly privatised Action Community for Entrepreneurship (ACE) to nurture start-ups and help them grow. Together with its partners, SPRING supported more than 160 start-ups last year.
In 2014, SPRING appointed two more accelerators, bringing a total of four accelerators under its Sector Specific Accelerator (SSA) programme. Aimed at providing smart money, these accelerators will identify promising ventures and co-invest with SPRING, and provide business intelligence, regulatory know-how and more, to shorten new businesses’ learning curve and help them grow. One of the accelerators, Clearbridge Accelerator, supported its investee Clearbridge Biophotonics through investing funds for product R&D, as well as defining and executing its clinical development strategy. They have also helped the company form strategic partnerships with medical key opinion leaders and leading MNCs in the industry, further building and driving wider market adoption and company value.
“It is important for us to help start-ups to scale up,” Mr Tan says. “A healthy flow of start-ups ensures constant renewal in the economy. And as they’re a source of innovation, they help Singapore hone its competitive edge.”
The number of partnerships between large organisations and SMEs also continues to grow, according to SPRING figures. Last year, more than 400 SMEs collaborated with large public sector agencies and private organisations to upgrade their capabilities or develop new products. Through such partnerships, SMEs can build their track records to help expand their businesses.
“Such collaborations provide access to research and technology to help SMEs develop products and services,” Mr Tan says.
For example, computer chip maker Intel is currently leading a project with 40 SMEs to develop wearable and wireless communication technologies and has also linked collaborating companies with potential customers. One of these, Gridcomm, is developing an IT system to manage street lighting for a customer introduced to it by Intel.
The Year Ahead
Although another testing year lies ahead, Mr Tan says SMEs are well placed to take advantage of all of these support mechanisms to en- hance their business prospects in 2015.
“This restructuring journey will continue this year, and SPRING is committed to supporting SMEs on this path,” he says.
“The global economic outlook for 2015 is still uncertain, which makes it even more important for SMEs to look for ways to innovate and hone their competitive edge, to be in a stronger position to capture future growth opportunities.”