SINGAPORE: Fewer Singapore businesses ventured overseas last year amid the COVID-19 pandemic, but more took on projects to raise productivity and build new capabilities, said Enterprise Singapore (ESG) on Friday (Feb 5).
The number of local businesses going overseas dropped 38 per cent to 1,600, which was expected due to global travel restrictions, the government agency said in its annual review.
Among those that continued to pursue internationalisation, they did so in different ways such as participating in virtual trade fairs and online networking events. They also tapped e-commerce platforms to market and sell their products and solutions.
ESG’s CEO Png Cheong Boon told reporters that these digital platforms allowed businesses to quickly establish and maintain market presence despite the travel curbs in place.
China and Southeast Asia remained the top markets that local firms were interested in, he added.
Speaking to reporters at the same press conference, Trade and Industry Minister Chan Chun Sing said the pandemic has emphasised the limitations of Singapore’s small domestic market and the importance of venturing abroad.
“While internationalisation activities slowed in 2020, we maintained a positive momentum and supported 1,600 enterprises in their efforts to venture overseas,” he said.
In the year ahead, ESG will continue to support companies to seize new opportunities in key markets and deepen partnerships with economic partners through initiatives such as the expanded Market Readiness Assistance Grant, he added.
ESG’s report also showed about 14,800 businesses embarked on projects to improve productivity and upgrade capability. This was 78 per cent more than the previous year.
These projects, covering areas such as automation, process and workflow redesign, as well as digitalisation, were in line with the strategies outlined in the various industry transformation maps.
About 600 businesses started on innovation projects to develop new products and solutions so as to capture opportunities in the pandemic or improve on their longer-term competitiveness. This was a comparable figure to 2019’s, noted ESG.
Overall, 15,300 businesses - with the bulk coming from the lifestyle, trade and connectivity, and modern services sectors - took on projects to improve productivity and innovation, as well as venture overseas last year.
Some businesses received support in more than one area, noted Mr Png.
Altogether, the projects are expected to generate S$18.4 billion in value-add to the economy and create 22,200 professional, managerial, executive and technical (PMET) jobs, according to ESG.
“While last year has been a difficult year for many of our local enterprises, requiring ESG to focus on helping companies to survive the crisis, it has not slowed ESG’s resolve to help our companies transform and seize opportunities in new markets, and through the innovation of products and development of new processes,” Mr Chan said.
More importantly, there is a shift among local business leaders, with more realising that the post-pandemic world will be very different.
“This is an important distinction as it determines the steps that our business will take going forward,” he said.
“Those who realise that there is no return to the pre-COVID-19 days will double down on their transformation efforts to ensure that they remain resilient and competitive in a changed economy. I am glad to see more enterprises and businesses leaders thinking along those lines.”
ESG also rolled out several initiatives to help firms survive the immediate challenges of the COVID-19 pandemic.
For instance, it stepped up manpower at its call centre to handle the surge in business enquiries, especially during the "circuit breaker" period and subsequent phases of the economic reopening.
In total, it handled more than 200,000 COVID-related calls and email enquiries last year, quadrupling from that of 2019.
On helping businesses to tide through cash flow issues and disruptions, it focused on two areas - ensuring access to financing and accelerating digitalisation.
On the former, around S$18 billion worth of loans was disbursed to 21,000 businesses in 2020. Nearly 90 per cent were micro and small enterprises, largely from the wholesale trade, construction, manufacturing, professional services and retail sectors.
Tapping on digital technologies and tools also became important as businesses were forced to find new ways to operate, especially during the circuit breaker period.
Thus, ESG assisted 23,500 enterprises to upgrade, digitalise and achieve business continuity amid the pandemic.
It also supported 3,600 retailers and 19,000 F&B establishments to build digital capabilities and sell online via the e-commerce and food delivery booster packages.
BEYOND THE PANDEMIC
Moving forward, the government agency will support more enterprises to continue with transformation efforts.
ESG chairman Peter Ong said firms need to build new capabilities that can support internationalisation in a “hybrid manner”, as well as harness innovation to meet new needs and compete beyond price.
They also have to seize opportunities in new growth sectors, especially agri-technology, education technology and advanced manufacturing, as well as in markets such as Southeast Asia and China.
China, for instance, is on the path to economic recovery and will be doubling down on efforts to build a strong domestic consumer market, an innovation eco-system and mega regions such as the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).
The GBA covers only 0.6 per cent of China’s total land area but accounts for 5.2 per cent of the country’s population and 11.1 per cent of economic growth in 2020.
“Our companies should try to tap the depth of the capital markets and robust technology ecosystem in this region to explore more collaboration,” said Mr Ong.
Meanwhile, there are emerging trends in sustainability that present significant economic opportunities.
“While we start 2021 with signs of some gradual recovery, however we are definitely not out of the woods yet,” said the ESG chairman, noting that the pandemic can “play up anytime” both at home and overseas “at short notice and with unpredictable impact”.
Businesses will have to be “highly agile to pivot as the situation affords” and pick up pockets of growth given expectations of market volatility. They will also need to compete on the basis of superior value proposition based on innovation and strong brand attributes, he added.