Authorities seek to give helping hand to SMEs

The Singapore government has launched initiatives to boost the business environment for small- and medium-sized enterprises (SMEs) that form the engine room of the country's economy.

The Ministry of Trade and Industry (MTI) has identified three areas in which SMEs will receive additional government support - productivity, innovation, capability upgrading and recruiting talent; seeking fresh business opportunities at home and abroad through internationalisation and industry collaboration; and creating a more favourable business environment by simplifying assistance schemes.

"The SME sector is an important pillar of Singapore's economy," said MTI Minister Teo Ser Luck at the programme's launch in March. "The review of the development strategies for our SMEs aims to help them strengthen their business competitiveness.

"I urge all SMEs to invest in skills upgrading, new technologies and innovative processes, and to tap the various schemes available to step up productivity improvements. The government will support our SMEs in their move to intensify their business transformation to achieve quality growth."

The boost in support was prompted by a review of strategies conducted by MTI and organisations created to assist SMEs - SPRING Singapore and International Enterprise Singapore - along with stakeholders from the SME community.

SMEs contribute more than 50 per cent of Singapore's economic output, they make up 99 per cent of companies in the city state and employ about 70 per cent of the total workforce.

An SME in Singapore is defined as a company with an annual turnover of not more than S$100 million (HK$613.2 million), or which employs no more than 200 workers.

Last year, more than 31,700 companies were set up in Singapore, a 5.8 per cent rise on new enterprises for 2011, although it is not known how many of those were SMEs.

In terms of enhancing productivity and innovation, the government is introducing a Productivity and Innovation Credit (PIC) scheme, in which a company that invests a minimum of S$5,000 for such activities will receive a cash bonus equivalent to the amount spent. This bonus is capped at S$15,000 over three years of assessment, from 2013 to 2015.

The PIC will also be expanded to include intellectual property in-licensing, encouraging SMEs to innovate and develop new products. Companies can claim a sizeable tax rebate and/or 60 per cent cash payment when they in-license the intellectual property for application in their business.

SMEs can also benefit from a flow of talent through the SME Talent Programme, targeting Polytechnic and Institutes of Technical Education students. SMEs can attract and recruit local talent early by sponsoring a study award for students, followed by a job opportunity upon graduation.

To encourage industry collaboration for productivity improvements, the government will work with industry players, trade associations and chambers to target sector-wide productivity issues faced by companies.

Groups comprising solution providers and users will be formed to come up with initiatives and solutions that can be adopted to improve productivity within the sector. The government will co-fund the development and adoption costs of these solutions.

SMEs looking to grow their business overseas can get easier and faster help with the Market Readiness Assistance (MRA) Grant. SMEs accessing markets can tap the grant to get advice from pre-approved consultants on areas such as market assessment, market entry and business restructuring through internationalisation.

To help SMEs seek overseas business, one of the biggest challenges they face, the government will provide support and funding to help companies identify and harness business opportunities. Continued support will also be given to high-growth enterprises striving to become future home-grown multinationals.

SPRING will help SMEs by streamlining its programmes by offering one main Capability Development Grant to support productivity improvement and capability development. This will make it easier for companies to apply for government assistance.