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Govt support for SMEs welcomed amid economic restructuring

The government plans to reinforce support for smaller firms as Singapore's economic restructuring continues, which is something that business groups have welcomed.

SINGAPORE: The next phase of Singapore's economic development will focus on a shift to sustainable and quality-driven growth as laid out by the Ministry for Trade and Industry (MTI), with the government gearing up for the second half of its current term.

The plan involves reinforcing support for smaller firms as Singapore's economic restructuring continues, which is something that business groups have welcomed.

The Chefmanship Academy, which is helmed by the private sector with government support, teaches techniques for dining establishments to raise productivity amid rising costs and competition.

"For example, formerly when we prepare stock, we need to boil for six hours. But by using modern techniques and products, the cooking time and ingredients can be reduced by half,” said Pek Sek Kiat, training manager for Unilever Food Solutions at the Chefmanship Academy.

The academy is a project under Partnerships for Capability Transformation (PACT), a government scheme promoting knowledge transfers from large to small firms.

Business groups have said that state support for local companies is generous.

MTI has set aside S$300 million for the next three years to help small and medium enterprises (SME) restructure, while S$1 billion from the National Productivity Fund has been committed for productivity programmes.

The schemes aim to help firms add value to their businesses.

The government also said they will assist local companies to remain competitive and seize new growth opportunities.

A case in point is the S$500 million committed for a “Future of Manufacturing” initiative.

The initiative helps the industry adopt game-changing technologies like advanced robotics that replace older production methods.

The challenge, however, lies in transforming an entire sector.

Ho Meng Kit, chief executive of Singapore Business Federation, said: “Productivity goes beyond the effort of each individual enterprise. There is a limit to how much you can automate.

“And what you need to do, really, is to make that improvement as a cluster of similar industry, as a vertical association."

Some firms may also fall by the wayside, unable to keep up with restructuring efforts.

Kurt Wee, president of the Association of Small and Medium Enterprises, said: “We might see business attrition. I think we should pay attention, potentially, to sectors whereby we may want to avoid having displaced employment and employee groups.

“And hopefully, jobs lost are less than jobs created."

The government's economic agencies are also pursuing new growth opportunities like 3D printing, with the potential to create a range of new jobs for Singaporeans. 

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