UNCERTAINTY in the global economy continues to amplify as ongoing trade conflicts and technology disruptions upend global supply chains. Given such uncertainty, Budget 2019 is forward-looking as it is designed to catalyse the forging of highly-differentiated and globally competitive Singapore SMEs.
Indeed, aspiring Singapore SMEs that seek success beyond our shores simply cannot afford to ignore a growth strategy that articulates a clear, differentiated and valuable offer to sizeable relevant markets.
Differentiation through innovation
It is not rocket science, after all, to state boldly that SMEs must innovate if they are to develop market-responsive next-generation products and services, or to re-shape their business model.
But there is a caveat.
Even as corporate business models evolve, SMEs should still hold fast to the unique Singaporean enterprise and "honest broker" brand that we have built since the days of Raffles.
This strong brand association buttresses our position as a global node in a new digital world and confers upon our companies a unique, differentiated edge over our competitors.
To advance this brand association in the new world order, SMEs can innovate effectively by forging partnerships with idea hubs such as A*Star to jointly develop and commercialise relevant IPs.
To this end, the government has set aside S$19 billion as part of an ambitious five-year Research, Innovation, and Enterprise 2020 plan, giving SMEs a competitive advantage at a national and global level.
In this new digital world, SMEs also need to evolve their business model with technology as the critical enabler.
The Budget expands the "SMEs Go Digital" programme to helps SMEs grow digital capabilities beyond a range of pre-approved readily adopted solutions. This now includes more advanced digital solutions such as AI-infused solutions and cybersecurity offerings.
Competing with an upskilled workforce
All that said, even as SMEs respond to the call of pursuing innovation and digitalisation, they might still struggle to move up the innovation ladder.
When it comes to technology adoption and innovative ways of doing things, it has been found that employee resistance is a major roadblock. The skilled talent crunch in recent years hasn't helped.
All the more reason to applaud the wide support for manpower upskilling.
The launch of Professional Conversion Programmes, especially, is relevant and imperative as it aims to upskill manpower in a way that allows companies to enter newer growth areas such as blockchain, embedded software, and prefabrication with greater confidence.
More specifically, workers are given more opportunities as the economy structurally shifts and SMEs are better equipped to tap into a new type of talent as assets for new growth.
Overall, Budget 2019 explicitly recognises the imperative to organise workers within sectors and to move them in the right direction, by building and nurturing the right skill-sets and mindsets.
Given that one in two Singaporeans is employed by an SME, the newly-skilled worker is critical in helping to re-shape our companies for domestic and global success.
A global position through partnerships
Of course, competing in foreign markets is not easy, especially since SMEs face competition not just from global players but also strong local players. And as the Singapore Business Federation's National Business Survey 2018/2019 reveals, close to half of SME business owners have insufficient market knowledge and information, making this the top issue faced in overseas expansion.
But all is not lost.
One solution is to foster partnerships as an affordable and highly effective way of gaining wider domestic and global market access.
Yet, for various reasons, SMEs often hesitate to partner with counterparts. They might, for instance, fear such arrangements risk losing their competitive advantages; whereas my perspective is that partnerships become relationship assets on which all parties can mutually learn and leverage on otherwise unavailable skills and assets, and find shared success.
Obviously, we need a paradigm shift in SME owners' mindsets.
In the meantime, SMEs can tap on the Local Enterprise and Association Development (LEAD), and Partnerships for Capability Transformation (PACT) programmes to strike up partnerships between companies and with trade associations.
Tomorrow's new global enterprise
With a clearly articulated growth strategy that is driven by innovation and partnerships, local SMEs can be confident that they can scale up and become globally-competitive players. The newly-launched "Scale-up SG" programme is designed to work with the private and public sectors, to build new capabilities to innovate, scale up, and internationalise.
Budget 2019 is a growth driver for SMEs. On every front, it provides a comprehensive platform with a wide range of initiatives that can help brave SMEs seize the high ground and turn uncertainties into opportunities.
The ball is now in our SME leaders' court. This is their moment to strategise, step up and leverage on these Budget-led initiatives to transform their companies into global blockbuster companies of the future.
- The writer is the Entrepreneurial & Private Clients Strategy Partner at PwC Singapore.