In an effort to support its most valuable sector, Singapore’s government has announced a number of measures designed to ensure SMEs can weather the Covid-19 storm. These include the Job Support Scheme, through which the government will co-fund between 25 percent to 75 percent of the first S$4,600 of gross monthly wages paid to each local employee in a ten-month period. 

The Wage Credit Scheme, originally introduced in 2013, has also been enhanced to further support salary increases for local employees. In 2020 the government will co-fund up to 15 percent of wage increases, with the monthly gross wage ceiling raised from S$4,000 to S$5,000, while wage increases dating from 2019 will be co-funded up to 20 percent. 

There are also a number of tax breaks available to Singapore businesses, including a 25 percent corporate income tax rebate, as well as a full rebate on property tax for companies hit hardest by the Covid-19 outbreak such as hotels, serviced apartments, tourist attractions, shops and restaurants. Singapore’s SMEs should take full advantage of these and all other government support measures. Find out more at: www.covid.gobusiness.gov.sg

Innovation is a central pillar of growth for SMEs, particularly in today’s fast moving economy where companies must keep up with the shifting needs and preferences of their customers. Those that fail to do so are unlikely to survive. Examples include HMV: once Singapore’s biggest music retailer, HMV closed its last outlet in 2015 after failing to keep up with the changes caused by digital disruption in the music industry.   

As the above demonstrates, one of the most important tasks for SMEs is to ensure they understand what their customers need and want and how to meet those desires. Those companies able to do this will always be ahead of the game. One great example is Singapore start-up Gill Lab, an SME that has answered the need for reliable, reusable face masks in the current health crisis with its innovative new Gill Mask.

Again, firms can access government support to develop new ideas and innovate. Initiatives include the Enterprise Development Grant, which aims to support Singapore businesses to grow and transform by funding up to 80 percent of costs for qualifying expenditures such as consultancy fees, manpower costs and software purchases. This rises to 90 percent for businesses most severely impacted by Covid-19. 

The Startup SG Equity Scheme is another initiative aimed specifically at technology start-ups that can apply for an investment of up to S$8 million from the government in partnership with third party investors. The scheme has a strong focus on the advanced manufacturing, pharma/biotech/medtech and agri-food technology sectors.

Enhance productivity 

Productivity has long been an area of focus for Singapore’s SMEs, which have been accused of dragging their feet when it comes to implementing solutions to improve performance. In-fact, of the 615 Singapore SMEs surveyed by United Overseas Bank (UOB) in January this year, 51 percent said that implementing productivity measures is a top priority - even more so than reducing costs and increasing revenues.

One of the main target areas these SMEs identified for increasing productivity was technology, with a number of firms keen to digitise more of their services to speed up processing and transaction times. Accounting, payroll and marketing were all areas of focus, while looking ahead many SMEs are investigating how to digitise expense management, customer relationship management and sales.

Digitalisation is another key focus for the government, who this year introduced the Productivity Solutions Grant, an extension of the SMEs Go Digital programme that allows Singapore SMEs to offset the costs of adopting digital solutions offered in the programme up to a maximum support level of 80 percent. In June UOB also launched “The FinLab”: an online platform to help SMEs and startups across Asean to digitalise.

Of course, productivity is also about people, which is why the government is also supporting businesses to invest in their staff with the SkillsFuture Enterprise Credit programme through which eligible employers will receive a one-off S$10,000 credit to upskill their workers. To get the best from their staff, SMEs can look to job redesign initiatives as well as curated training programmes.

For Singapore SMEs, growth can be challenging if it is limited to the domestic market. With larger markets such as China, Indonesia and Vietnam on the doorstep, smaller companies from Singapore need to focus on expanding into Asia and, eventually, globally. This is particularly true for those that have already established themselves at home and so are in a stronger position. Despite this, though, less than 25 percent of Singapore SMEs with a turnover of less than S$1 million have an overseas footprint. 

As such, expansion is another key area of focus for Singapore SMEs, with a 2019 survey conducted by global insurer Aon revealing that half of SMEs in Singapore are considering expanding their operations overseas. Encouragingly, a more recent survey conducted by QBE showed that smaller SMEs in Singapore that had not yet expanded overseas were more eager to internationalise compared to their medium and larger-sized peers. 

While the first phase of the Covid-19 pandemic is now thankfully behind us, there are undoubtedly still dark days ahead for businesses and individuals alike. However, Singapore’s SMEs remain a vibrant and essential part of our economy and society and with the right vision, drive and support, they will no doubt emerge from Covid-19 ready to seize the new challenges that lie ahead.