SINGAPORE: The government should consider developing globally competitive companies and introducing broad-based support for small- and medium-sized enterprises (SMEs).
These are the two key ideas the SME Committee (SMEC) hopes the government will implement for the upcoming Budget 2017, the committee announced at a press conference on Wednesday (Jan 4).
The SMEC, which is chaired by Crescendas Group’s chairman and CEO Lawrence Leow, with Senior Minister of State for Trade and Industry Sim Ann and Minister of State for Manpower Teo Ser Luck serving as advisors, said these recommendations were submitted to the government on Dec 30, 2016.
According to the Singapore Business Federation’s (SBF) assistant executive director Koh Tat Liang, the suggestions came amidst an uncertain global economic outlook. As reflected in a recently released national business survey, local SMEs are increasingly pessimistic about the situation.
THIRD ENGINE OF GROWTH
Under its recommendations, SMEC hopes the government will develop globally competitive companies, as Singapore’s third engine of growth apart from multi-national companies and government-linked companies.
On this point, SMEC chairman Mr Lawrence Leow said: “To achieve this, we have to transform into a creative and entrepreneurial nation that can attract foreign entrepreneurial talents and high technology enterprises to settle here, form joint ventures with local enterprises and create new businesses that will help propel our economy.”
One method to achieve this is to introduce incentive schemes to attract innovative companies to establish their regional base in Singapore, with the condition that they enter into a joint venture with local companies, said the SMEC.
It also suggested studying if setting up a private bourse for innovative companies to raise capital is feasible.
And to address the issue of attracting talent, the committee urged the government to look into current employment regulations to take into account “entrepreneurial talents”, and introduce an “Entrepass” for entrepreneurs that enter a joint venture with qualified local enterprises.
Meanwhile, the committee also hopes more support can be given to smaller companies to help them tide over operating concerns and to seize growth opportunities.
For instance, the SMEC recommended that the government hold back any planned increase in the foreign worker levy across all sectors for 36 months.
The SMEC also hopes government landlords will provide rental rebates for all industrial, commercial and retail properties, as well as take the lead in adopting the Fair Tenancy Framework.
And to help companies with challenges in financing, the business community hopes the government will increase the working capital loan offered by SPRING Singapore beyond the current cap of S$300,000, and to also increase the risk-quantum co-shared by the government, which currently stands at 50 per cent.
On the innovation front, SMEC hopes more flexibility can be given when R&D initiatives are considered for incentives.
And to better enable SMEs to go abroad, the SMEC also recommends the enhancement of the Global Company Partnership programme, by increasing the grants awarded.
While noting that the government has put in place measures to enhance productivity growth among SMEs, the SMEC said the results have been lacklustre.
SBF’s Mr Koh said a mindset change is necessary, and must come top down.
To achieve this, the SMEC suggests that SME leaders should be included for funding support in leadership training schemes.
Both Ms Sim and Mr Teo said they welcomed the recommendations from the committee. Ms Sim said the recommendations were “well-considered” and was a “strong effort” by the committee members.
“Certainly they will serve as very useful inputs for the government, especially as we are preparing for the recommendations under the Committee on the Future Economy, as well as for the upcoming budget,” she said.
Ms Sim added that she was “encouraged” the recommendations placed an emphasis on competitiveness to set the stage, before tackling broad-based measures.
“We must not lose sight of competitiveness. I think that’s key. That’s fundamental,“ said Ms Sim.
When asked if near-term measures or long-term efforts to transform the economy were more important, Ms Sim said they were “all important priorities”.
She added that recommendations that built upon existing government policy are an affirmation that the existing suite of schemes are in the right direction.
Budget 2017 will be delivered by Finance Minister Heng Swee Keat in parliament on Feb 20.