SINGAPORE: Singapore firms have pressed on with transformation efforts in 2021 despite COVID-19 challenges, with about 22,000 companies taking on projects to improve their productivity and build new capabilities.
This figure is about 48 per cent more than the 14,800 firms in 2020, according to Enterprise Singapore’s (ESG) latest annual review released on Friday (Feb 11).
More than half of these firms came from the food services, retail, wholesale trade and manufacturing sectors, ESG’s chief executive Png Cheong Boon said at a press conference.
Many of the productivity and capability upgrading projects focused on automation, process and workflow redesign, as well as digitalisation, he added.
ESG also stepped up efforts to help small- and medium-sized enterprises (SMEs) go digital. For example, the Start Digital initiative was enhanced with new solutions in digital collaboration, digital marketing and digital transactions last year.
The initiative, first launched in January 2019 by ESG and IMDA, allows SMEs to sign up for digital solutions that run for at least 18 months and receive at least six months of fee waivers.
More than 30,000 firms have benefitted from the initiative to date, Mr Png said.
ESG’s report also showed that about 600 businesses embarked on innovation projects in 2021, the same as the previous year.
Such efforts to develop new products and solutions have helped local firms to gain a competitive advantage, said Mr Png, citing medical technology firm Endofotonics as an example.
The home-grown firm has developed “the world’s first molecular AI diagnostic platform” that is able to improve early-stage stomach cancer detection, he added. This technology has been approved for use in Singapore hospitals.
On internationalisation efforts, about 1,600 enterprises carried on with overseas projects last year despite the global travel restrictions and uncertainties brought on by the pandemic. This figure is unchanged from 2020.
China and Southeast Asia remained the top markets, but some firms also tapped ESG’s Market Readiness Assistance grant to venture into markets further afield, like Saudi Arabia and South Africa.
Others were introduced to projects in the United States and Europe across areas, such as lifestyle and consumer and technology, Mr Png said.
ESG also facilitated more than 300 overseas projects, which helped Singapore firms secure new businesses, establish partnerships and diversify into new markets.
Overall, the agency supported 22,100 firms in projects related to productivity, innovation and internationalisation last year, up 44 per cent when compared to 2020.
“When fully realised, these efforts are expected to generate S$17.9 billion in value-add and create 23,300 skilled jobs for the Singapore economy,” said Mr Png.
Beyond enterprise development efforts, ESG continued to support businesses in coping with COVID-19 disruptions.
These include extending grants and financing schemes, supporting industry-led efforts on fair tenancy practices, assisting businesses to cope with restrictions and additional public health requirements arising from changing pandemic developments.
Around S$8.6 billion worth of loans were extended to 12,600 businesses last year, largely under the Temporary Bridging Loan programme and the Enterprise Financing Scheme-Trade Loan.
A majority of these firms – 91 per cent – were micro and small enterprises. Most of them were from the wholesale trade, construction and manufacturing, said Mr Png.
The number and quantum of loans disbursed mark a significant fall from 2020, where around S$18 billion worth of loans were disbursed to 21,000 businesses.
Responding to a question on that, Mr Png explained that the “sudden” emergence of COVID-19 and a “severe” hit to the economy in 2020 had driven many companies to tap on various loan schemes that year.
But the economic recovery last year alleviated the pressure on most sectors.
“Therefore, some of these companies may not necessarily need to tap on loans,” he told reporters. “That said, some sectors are still affected so those who are still in distress or need a longer recovery period (have) come forward.”
Nevertheless, the amount of loans disbursed in 2021 remained elevated – at four times higher than the pre-pandemic years of 2019 and 2018, said Mr Png.
“That means that there’s still quite a fair number of companies that are still struggling,” he added.
To help, ESG has also encouraged its partner banks to proactively restructure loans when needed, so as to ease the repayment burden of SMEs. About 20 per cent of the outstanding loans under the agency's financing schemes have been restructured to date.
“GO ON THE OFFENSIVE” IN 2022
Speaking at the press conference, Trade and Industry Minister Gan Kim Yong said he was encouraged to see businesses taking steps to transform amid the downturn.
While “significant headwinds” remain ahead in 2022, such as cost pressures from higher energy and commodity prices, supply chain bottlenecks and uncertainties about the pandemic amid the spread of the Omicron variant, there are “reasons to be confident”, he added.
For one, COVID-19 vaccination rates are high and still rising, while death rates have fallen. Societies have become “more resilient”, with the arrival of anti-viral drugs presenting hopes that the world can avoid another mass lockdown and progressively roll back travel restrictions.
A “strong” global economic recovery in Singapore’s major economic partners can also be expected.
Mr Gan said: “While we will need to continue to help businesses adjust to COVID-19, it is timely to also help them go on the offensive and seize opportunities locally and abroad.
“Over the last two years, our Singapore enterprises have shown themselves to be adaptable and resilient. We now have to prepare ourselves so that when the world economy reopens fully and recovers quickly, we are the first out of the gate to seize the opportunities.”
The minister outlined three ways to do so: Grow new and emerging sectors such as the digital economy and green economy, invest more resources to groom Singapore’s “own crop of locally grown and globally competitive enterprises”, and step up efforts to capture global demand.
On tapping global demand, Mr Gan said there is a “need to urgently recover the lost ground” after global travel curbs made it difficult for firms to venture abroad over the past two years.
While ESG will ramp up efforts to help businesses break into new markets, the Government will also continue to grow its network of free trade agreements.
Intensifying innovation and start-ups will also be key, Mr Gan said, noting how Singapore-based start-ups raised S$11.2 billion in the first nine months of 2021. This is more than double the S$5.5 billion raised in 2020.
“Our success in internationalisation is determined by our firms’ ability to commercialise new technology and create world-leading products and services,” the minister added.
“I would like to see more companies capitalise on Singapore’s vibrant ecosystem to undertake R&D and innovation activities, and start new businesses.”
Elaborating, ESG chairman Peter Ong said the agency will do more to help companies deepen market presence in the region.
“If they are already overseas, we encourage them to look beyond the major cities in each major market or region. Danang in Vietnam or Surabaya in Indonesia are but some examples,” he said.
ESG will also help companies enter markets further afield. For example, in emerging markets like Latin America and Africa, opportunities can be found in consumer-related, trade, digital and infrastructure solutions, said Mr Ong.
When it comes to spurring innovation and fuelling start-up growth, “open innovation” will remain a key approach for ESG.
The agency's "Open Innovation Challenges" have been well received. "Corporates gain access to new ideas, while start-ups and enterprises can offer new solutions," Mr Ong said.
Last year, ESG worked with more than 60 organisations from 11 countries, providing pilot opportunities for the winning solution providers.
“We will continue to work with corporates to seal tangible outcomes from these efforts. To take it one step further, ESG will step up our focus on driving cross border innovation,” said the ESG chairman.
“For 2022, we have already identified more than 10 innovation calls with countries across Europe and Asia, and we will be announcing them in due course."