Poll shows more firms using assistance schemes for conventional activities
- POSTED: 08 Jan 2014 18:50
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More businesses appear to be using government assistance schemes for conventional activities to defray costs, rather than activities for innovation and capability transformation. This is according to a poll of some 435 respondents by the Institute of Singapore Chartered Accountants.
SINGAPORE: More businesses appear to be using government assistance schemes for activities to defray costs, rather than for innovation and capability transformation.
This is according to a poll of some 435 respondents ahead of the upcoming budget on February 21.
Rising rentals and tighter manpower constraints remain key concerns this year, and yet another new challenge could be creeping up on Singapore businesses.
With interest rates expected to go up, the Singapore Business Federation sees financing from banks likely to get more expensive for businesses.
SBF hopes that more can be done to come up new ways to help firms with non-bank financing.
Respondents to the survey by the Institute of Singapore Chartered Accountants (ISCA) are calling for greater support to help reduce these costs.
Still, industry leaders said businesses need to move beyond productivity and focus on activities that promote innovation and capability transformation.
The survey revealed that most companies prefer to tap the Productivity and Innovation Credit (PIC) schemes just to buy and lease equipment or train employees.
Jessica Tan, who chairs the Government Parliamentary Committee for Finance and Trade & Industry, said: “How do we encourage our SMEs to take advantage of the areas around innovation, IP creation, and patent registration, R&D? These are the areas that exist today but why aren't our companies taking it up?”
One reason could be that most companies still find the terms and conditions for these schemes too restrictive, according to the survey.
But innovation can increase value add and competitiveness.
Ernest Kan, president of ISCA, said: “To be able to generate higher value add, you need to be innovative, I think that is where the panellists focused a lot on discussing - how to build a Singapore brand, how the budget can consider incentives that can help companies to build a brand, and to innovate.”
Meanwhile, most companies felt that the Wage Credit Scheme did not result in larger wage increments or bonuses.
The scheme co-funds 40-per cent wage increases to Singaporean employees earning a gross monthly wage of up to S$4,000 from 2013 to 2015.
Only 12 per cent of the respondents said the scheme resulted in their firms raising wages.