SINGAPORE: More than S$100 million has been set aside over the next three years for an integrated scheme to foster partnerships among local enterprises of all sizes, said Minister for Trade and Industry (Industry) S Iswaran in Parliament on Friday (Mar 2).
The fresh funding from FY2018 to FY2020 will be for the single PACT scheme, which streamlines existing enterprise partnership support measures across various agencies.
These include the Economic Development Board’s Partnerships for Capability Transformation, SPRING’s Partnerships for Capability Transformation and Collaborative Industry Projects, as well as IE Singapore’s Global Company Partnership Grant.
Under this integrated scheme, companies will receive support of up to 70 per cent of the qualifying costs, and have a dedicated headcount appointed by a lead company to identify and develop PACT projects. The single PACT scheme, administered by the Economic Development Board (EDB) and Enterprise Singapore, will be launched on April 1, 2018.
According to Mr Iswaran, projects among small- and medium-sized enterprises (SMEs) and start-ups will now qualify for support.
The scope of PACT will also be expanded to include sourcing for services providers, as well as to promote the early adoption of new technologies among local enterprises, he added.
Based on feedback from many SMEs on the value of collective branding, resource pooling and venturing overseas together, PACT will also support such strategic alliances to move into new business areas in both domestic and overseas markets.
“In other words, it aims to help SMEs complement one another as a group as they venture into new areas, whether its Singapore or internationally,” said Mr Iswaran.
The fresh funding could be attributed to the “quite positive experience” from EDB and SPRING’s support for 180 projects to date, resulting in about 1,000 partnerships, said the minister.
“In view of these positive experience that we’ve had, we have allocated S$100 million over the next 3 years for an integrated PACT Programme, to support these and more forms of collaboration among enterprises to work and grow together in capability and business development.”
He added that while competition is the natural instinct of companies, enterprises can also support one another to succeed in transformation.
This partnership is important amid the roll-out of the 23 Industry Transformation Maps.
“The ITMs are inclusive in their design…(and) they aim to address the diverse needs of industries and enterprises,” he said. “However, there is a limit to how many of the over 200,000 enterprises that Government agencies can directly engage."
"That’s why we have stressed the importance of partnerships, with the trade associations and chambers, the unions, also with other stakeholders because they can play an important role to propagate the transformation message, and broaden the reach of the ITMs," Mr Iswaran emphasised.
TAPPING ON ASIA’S INFRASTRUCTURE DEMANDS
In his speech delivered during the Committee of Supply debate, Mr Iswaran also provided some details about the new Infrastructure Office, which will be launched in October.
Mr Iswaran said the Infrastructure Office is a continuation of last year's International Financing Scheme (IFS) Non-Recourse Financing Scheme – a scheme with risk-sharing between Government and banks for loans that are secured on the project’s cash flow, rather than the SME’s assets.
The new office will aim to build a deeper understanding of the pipeline of infrastructure projects in the region, promote collaboration between foreign and local enterprises from the entire infrastructure value chain, as well as facilitate the structuring, financing and execution of Asian infrastructure projects.
Mr Iswaran said the growing demand for infrastructure in ASEAN and developing Asia is one that offers significant opportunities that span several ITMs, including financial services, professional services, precision engineering and construction.
However, the identifying and structuring of infrastructure projects, as well as finding the right partners to finance and execute them, remain a challenge both in ASEAN and developing Asia, he added.
The Infrastructure Office will work closely with private sector players in the local ecosystem, supported by Government agencies like Enterprise Singapore, EDB, the Monetary Authority of Singapore and the Professional Services Programme Office, said Mr Iswaran.
“In short, the aim is really to bring together the different players in the infrastructure ecosystem that we have in Singapore… so that we can bring our capabilities together to address these opportunity as a group.”
ENTERPRISE SINGAPORE TO BE ENTERPRISE-CENTRIC
On the new entity that will be born this April from the merger of IE Singapore and Spring Singapore, Mr Iswaran said the Enterprise Singapore will tailor its programmes to the needs of the different segments of enterprises.
This is because Singapore’s enterprise landscape is “quite variegated”.
“Micro and small enterprises account for a significant majority, with medium and large enterprises comprising only about 4 per cent and 1 per cent, respectively, of the total enterprise base. Yet, if you look at their share of value add, that has the inverse pattern.
"Resources, capabilities and their employment contribution also vary considerably across this broad enterprise spectrum,” Mr Iswaran elaborated.
For instance, to support companies at different growth stages, Enterprise Singapore will combine SPRING’s Start-up SG initiatives and IE’s international networks to “create a more conducive environment for start-ups”.
“Beyond mentorship and funding, startups increasingly need to internationalise a lot earlier in their development in order to gain access to new markets, and also acquire complementary capabilities,” he said.
For companies that are scaling up, Enterprise Singapore will provide support in key areas of capability development.
For one, it will use the new Productivity Solutions Grant (PSG) to support the adoption of pre-scoped solutions by SMEs to improve their operational efficiency and productivity.
Announced by Finance Minister Heng Swee Keat during the Budget for 2018, the PSG is a new streamlined grant that makes it easier for smaller firms to get access to funds to adopt technologies and productivity solutions.
On the issue of access to financing, the pilot Venture Debt Programme (VDP) will be extended by three years till March 2021, announced Mr Iswaran.
The VDP enables local high-growth enterprises to finance their expansion plans with less equity dilution, he said. Since its launch in October 2015, 17 companies from diverse sectors have benefitted from the programme, he added.
Companies aiming to tap overseas opportunities can look to Enterprise Singapore’s internationalisation initiatives, said Mr Iswaran.
The Market Readiness Assistance (MRA) scheme, first introduced in 2013 to help companies defray the costs of foraying into new markets, will see an extension of its higher grant quantum.
In Budget 2015, the grant support was raised from 50 per cent to 70 per cent of qualifying expenses from April 1, 2015 to March 31, 2018. Mr Iswaran said this higher grant support will now be extended for another two years.
Meanwhile, the ASEAN Leadership Programme, set to be launched in the second half of the year, will help equip Singapore business leaders with a deeper understanding of Southeast Asian markets and the skillsets required to lead business expansions in the region, said Mr Iswaran.
For companies to scale up to the next level of growth, the minister noted that capability development, innovation and internationalisation are "deeply intertwined".
To that end, local enterprises can turn to the new Enterprise Development Grant (EDG), which will consolidate both the SPRING’s Capability Development Grant (CDG) and IE Singapore’s Global Company Partnership Grant (GCP) by the fourth quarter of this year.
The EDG will give companies the flexibility to “bundle internal upgrading activities, domestic projects and international expansion plans in one application”, said Mr Iswaran.