Week in Review: Singapore gears its SMEs for a Digital Economy
By Karamjit Singh September 2, 2017
- Southeast Asian governments can learn lessons from Singapore’s push
- SMEs are too critical a pillar of economic, employment growth in region
IT’S ironic how, despite their critical role in an economy, Small and Medium Enterprises (SMEs) tend to grab the headlines for the wrong reasons. And in recent years, those headlines always tend to be around how slow they are in recognizing the value digital offers to their business and the dangers of not adopting fast enough.
And if you think this is only a big problem for developing nations, which 9 out of 11 Southeast Asian (SEA) nations are in, think again because even the Singapore government is worried about the slow rate of digital adoption by its SMEs, which constitute 99% of all businesses while creating 70% of employment in the city-state.
That may surprise most of us as Singapore regularly ranks in the top 10 of many global economic indicators but it is worthwhile to note that those indicators are frequently based on overall economic data and from surveying large companies. And in Singapore, the base of large companies is bolstered also by the strong presence of many global companies based there.
But to its credit, the Singapore government has never been lulled into a false sense security and hearty back slapping, feeling its economic policies have covered all the bases. Because its SMEs, while on the curve with automation, have not moved anywhere near fast enough to get themselves to be digital ready. And this, if not urgently addressed, could undermine the future competitiveness of Singapore and employment.
And recently the government has rolled out another plan to get them on the digital wave though its SMEs Go Digital initiative. Led by its Info-communications Media Development Authority of Singapore (IMDA) this initiative is actually an enhancement of an existing programme, that itself was an enhancement of another SME programme! That programme is the Enhanced iSPRINT that was crafted to help SMEs to cut costs, improve efficiencies and deliver better services in the digital economy.
No government can afford to have the legs cut off from its SMEs pillar. But with digital disruption bringing down barriers and making the world flatter, quicker than Thomas Friedman could have predicted in his The World Is Flat 3.0: A Brief History of the 21st Century, bestseller from 2007, SMEs, especially those who are in market segments which makes them vulnerable to competition from overseas SMEs that have adopted digital quicker, are definitely in danger and may not even be aware yet.
But Singapore is very aware which is why the steps it has taken with its current campaign should be studied closely by its neighbouring governments and emulated as far as possible including getting its Association of Small and Medium Enterprises (ASME) as the party to operate the SME Digital Tech Hub. After all, who speaks the SME lingo better than the industry body. There are other learning points as well from what Singapore is doing, especially in alleviating the fears SMEs have around any technology adoption.
And I really hope policy makers from other countries do not use the excuse of the S$300,000 (US$221,000) funding each Singapore SME is eligible for. For sure, government’s have to make some funding available, as this is a matter of survival for their SMEs, but they don’t have to fork out the same amount or even close to it.
But governments in the region must act now to equip their SMEs to be the disruptors rather than be disrupted. So look to Singapore and learn from its fear over the future of its SMEs and what it is trying to do to give them a better future in a world that is changing too fast almost, because of digital disruption.
And before I end, I’d like to congratulate Malaysian gaming startup, Magnus Games whose Kickstarter campaign exceeded its target by 9x and in the process making it the most gaming funded project in SEA!
With that, I wish all readers a restful weekend and especially in Malaysia which had its weekend start on Thursday, thanks to its National Day and Friday which was Hari Raya Haji (btw, this was a holiday in Singapore and Indonesia as well) and extends to Monday which was declared a public holiday by the government that to the country topping the medals tally in the just ended SEA Games! And of course, have a productive week after, especially for those in Malaysia after their 5-day break.