Budget 2022: ‘First priority’ to strengthen digital capabilities; push for innovation also on agenda
SINGAPORE: Amid Singapore’s “first priority” to strengthen its digital capabilities, about S$200 million will be set aside over the next few years to enhance schemes that build such capabilities among firms and workers, said Finance Minister Lawrence Wong on Friday (Feb 18).
This focus comes as Singapore has a “window of opportunity over the next few years to establish leading positions in key market segments”, said Mr Wong in his speech for Budget 2022.
“We will accelerate our investments in new capabilities to power our next stage of growth.”
The S$200 million sum will go partly towards enhancing initiatives such as the Advanced Digital Solutions scheme, which helps firms adopt cutting-edge digital solutions such as in robotics.
It will also go towards expanding the Grow Digital scheme, which helps businesses access overseas markets digitally.
This will come on top of infrastructure investments in broadband infrastructure and future technologies such as 6G.
More details will be announced at the Ministry of Communications and Information’s Committee of Supply session, he said.
PUSHING FOR INNOVATION
Mr Wong also stressed the importance of research and development in innovation, but said Singapore’s total business expenditure on R&D “lags” other economies.
He also noted that most of this R&D is currently driven by multi-national companies.
“Local enterprises, which comprise about 80 per cent of all firms, account for only about a quarter of total business R&D expenditure,” he said.
To help local firms undertake R&D, the capacity of centres that provide research and innovation support to small- and medium-sized enterprises (SMEs) will also be increased.
There are currently more than 80 such centres across polytechnics and Institutes of Technical Education, which work closely with SMEs to undertake industry projects – often leading to innovations, he said.
To further support such collaborations, these centres’ capacities will be increased such that they will be able to undertake close to 2,000 innovation projects across five pilot sectors over the next five years.
These sectors are: Agri-tech, construction, food manufacturing, precision engineering and retail.
“This amounts to an eight-fold increase in the number of innovation projects undertaken in these sectors,” said Mr Wong.
STRENGTHENING LOCAL ENTERPRISES
For the broad base of SMEs, Mr Wong said the priority is to raise their productivity.
These firms currently make use of the Productivity Solutions Grant (PSG) to adopt digital and automation solutions.
To push for a greater take up of productivity solutions by SMEs, S$600 million will be set aside to expand the range of solutions available under the PSG, said Mr Wong.
This is estimated to support more than 100,000 productivity projects over the next four years – more than double the figure supported since the scheme began, he noted.
In addition, a new initiative – Singapore Global Enterprises – will give larger local enterprises more customised assistance to scale up in overseas markets.
The scheme will provide “bespoke assistance tailored to the needs of promising local enterprises”, in areas such as innovation and creating partnerships.
These firms will also need more support in talent development, noted Mr Wong. To that end, a new Singapore Global Executive Programme will be launched to help them attract and nurture new talent.
The programme will involve industry and overseas attachments, mentorships and peer support networks.
To help companies with financing needs, two components of the Enterprise Financing Scheme will also be enhanced.
Firstly, the Merger & Acquisition (M&A) Loan will be expanded to include domestic M&A activities from Apr 1 this year to Mar 31, 2026. “This will support companies to grow and expand through mergers and acquisitions,” said Mr Wong.
Mr Wong also earlier announced the enhanced Trade Loan until September this year. On top of this extension, the enhanced 70 per cent risk-share under the Trade Loan for firms venturing into “more nascent markets” like Bangladesh or Brazil will also be maintained.
“We hope this will encourage our enterprises to seek untapped opportunities in these markets,” he said.