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Singapore's small businesses 'strong and adaptable': CPA Australia

They are likely to ride out the current economic volatility in global markets, but could benefit from a greater emphasis on innovation, according to a survey. 

SINGAPORE: Small businesses in Singapore are optimistic about growth in the next 12 months, even if they are apprehensive about the economy, a survey has found.

The findings from CPA Australia's annual Asia-Pacific Small Business Survey, which is based on responses from about 3,000 small business operators in Malaysia, Vietnam, Indonesia, China, Hong Kong, Australia, New Zealand and Singapore, were released on Friday (Jan 22).

The professional accounting body's chief executive Alex Malley said 59 per cent of respondents from Singapore reported their businesses grew over the last 12 months, up 8 per cent from the same survey in 2014. 

Furthermore, 57 per cent of Singapore's small businesses expected their own outlets to grow in the next 12 months, despite a 13 per cent fall in economic confidence from the previous year.

“This positive outlook is in part explained by the adaptability Singapore’s small businesses have shown when faced with unfavourable economic conditions," Mr Malley said. 

"WELL-PLACED" TO RIDE OUT VOLATILITY

Smaller businesses in Singapore have been financially prudent in the face of an uncertain economic climate, with fewer seeking external financing or hiring more employees in the past 12 months, the study found. 

This was "an entirely appropriate response" to the current economic environment in the country, Mr Malley said, adding that such strong management practices are indicative that Singapore's small businesses are "well-placed to ride out the current volatility on international markets and take advantage of future improvements in the global economy". 

BUSINESSES COULD BENEFIT FROM GREATER FOCUS ON INNOVATION

CPA Australia noted that 15.2 per cent of Singapore businesses surveyed indicated that they expected to innovate through the introduction of a unique new product, service or process, less than the survey average of 22 per cent.

It recommended that small businesses place a greater emphasis on innovation and take advantage of the "world-leading support for innovation on offer by Singapore’s government".

Small businesses with that engage in e-commerce and have a social media presence are significantly more likely to be growing and creating jobs, CPA Australia said. 

However, the survey findings show that those in Singapore are currently lagging behind their peers, especially those in Hong Kong and Shanghai, on both generating revenue from online sales and establishing a social media presence. 

It found that 19.4 per cent of Singaporean small businesses expected to grow their e-commerce presence to a large extent in the next 12 months, lower than the survey average of 32.2 per cent, while 79.6 per cent of Singaporean small businesses used social media in their business compared with the Asia average of 92.6 per cent. 

"We expect that the Government’s strong support for innovation by small to medium-sized enterprises should translate into more Singaporean businesses focusing on innovation and technology uptake in the coming years," CPA Australia said.

"And those that do take advantage of the support that is available will find themselves in a good position to out-compete their less nimble and tech-savvy competitors."