SINGAPORE: A combination of new initiatives and expansion of existing schemes worth S$1 billion was announced on Monday (Feb 18) by Finance Minister Heng Swee Keat to help local companies build “deep” capabilities.
This forms one of the three key thrusts aimed at supporting the ongoing industry transformation, said Mr Heng in his Budget statement.
Firms can look forward to “customised” assistance in identifying and overcoming business challenges, as well as scaling up, in the form of two new programmes – the Scale-up SG programme and the Innovation Agents programme.
The former, which will be launched by Enterprise Singapore in partnership with the private and public sectors, will help “high-growth local firms” to build new capabilities, innovate, grow and internationalise, said Mr Heng.
The latter, also administered by Enterprise Singapore, will be a two-year pilot for firms to seek advice on innovation opportunities from experienced industry experts.
Under the Innovation Agents programme, these experts will be “matched” with suitable firms, and the mentorships can be a one-to-one or group consultation lasting for a few months to a year based on needs and scope.
To deepen the pool of “smart, patient capital” to help firms scale up, Mr Heng announced that an additional S$100 million will be set aside for the Co-Investment Fund (CIP) III.
This follows the S$400 million that the Government has set aside since 2010 through two rounds of fund injections for the CIP to invest in local small- and medium-sized enterprises (SMEs), alongside the private sector. This has catalysed about S$1.3 billion of additional funding for SMEs.
The just-announced Government capital is expected to bring in at least S$200 million of additional funding, said the finance minister.
Businesses will also find it simpler to access official financing schemes under a new streamlined initiative.
Set to be launched in October, the Enterprise Financing Scheme (EFS) will streamline eight existing SME financing initiatives. It is set to cover financing needs across different stages of growth, including trade, working capital, fixed assets, venture debt, mergers and acquisitions and project financing.
One of them includes the SME Working Capital Loan scheme introduced in 2016. This scheme will be extended by two more years until March 2021 to catalyse further support worth S$1.8 billion, said Mr Heng.
Meanwhile, the EFS will also provide stronger support for companies that have been incorporated for less than five years.
Mr Heng said this will be done through the Government taking on up to 70 per cent of the risk for bank loans to these young firms, up from the current 50 per cent under most existing loan schemes.
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HELP IN DIGITAL ADOPTION
More help will also be on hand to help firms stay on top of technological advances, especially in digital technology.
For one, the SMEs Go Digital programme – introduced in Budget 2017 to help SMEs grow digital capabilities – will be expanded to build more sector-specific industry digital plans, starting with the accountancy, sea transport and construction sectors.
The Infocomm Media Development Authority (IMDA) will announce more sectors later this year.
Said Mr Heng: “These will guide SMEs on relevant digital technologies and skills training programmes."
In addition, the number and range of cost-effective, pre-approved digital solutions under the SMEs Go Digital programme will be widened, he added.
Companies in the services sector, meanwhile, can tap on the Digital Services Lab – a three-year pilot launched by the Ministry of Communications and Information last year.
Citing the example of how the pilot is developing solutions to integrate the logistics chain for retail malls, Mr Heng said it brings together industry and the research community to “co-develop digital solutions with sector-wide impact”.
To help more firms integrate technologies and re-engineer their business processes, the Automation Support Package (ASP) will also have a two-year extension, said Mr Heng.
Introduced in Budget 2016, the ASP has helped more than 300 companies to automate operations and raise productivity.
Meanwhile, Government agencies are also embracing technology to serve companies better, such as the one-stop shop for grants – Business Grants portal – launched in 2017.
Coming up, the Ministry of Trade and Industry and relevant agencies will develop a one-stop portal to make it easier for businesses to transact with the Government. A pilot for the food services sector can be expected by the third quarter.
In his Budget speech, Mr Heng stressed that industry transformation efforts remain a “continuing journey” despite “good growth” of 3.2 per cent last year and “good progress” in productivity.
“The basic building blocks of a vibrant economy are strong, competitive companies that maximise value creation,” said Mr Heng, as he outlined the need to build deep enterprise capabilities. The other two "key thrusts" refer to developing deep worker capabilities and forging strong partnerships.
“Companies at different stages of growth have different needs. The leadership of each company is in the best position to lead and drive changes, while our agencies can provide support at each stage of growth.”