Small and medium-sized enterprises (SMEs) hope the upcoming Budget will contain more incentives and help for expanding overseas, according to a new survey.
Respondents to the poll conducted by UOB also called for more government-backed financing schemes and measures to encourage investment in technology, amid an ongoing economic slowdown that has depressed incomes and margins for many firms.
The local lender polled 100 SMEs across industries including professional services, infocomm and media, retail, and food and beverage.
While 26 per cent of those polled want the Budget on Thursday to contain more incentives for overseas expansion, just 5 per cent of respondents said they are hoping for subsidies to hire and train older employees.
About 11 per cent are asking for the foreign worker levy to be reduced.
Finance Minister Heng Swee Keat has indicated that this year’s Budget will focus on the economy and should offer some relief to firms hit by the ongoing slowdown.
But economists have pointed out that the broader themes of economic restructuring and longer-term challenges like shifting demographics remain key.
UOB economist Francis Tan said the issues flagged by firms in the poll are not new and noted that there are already a wide range of government schemes targeted at SMEs.
“Perhaps more needs to be done to raise awareness of these schemes…There has been a lot of help available for SMEs for many years,” said Mr Tan.
He added that moves aimed at encouraging firms to raise productivity and become more innovative, such as the popular Productivity and Innovation Credit (PIC) scheme, have traditionally been “blanket measures” which have had mixed success.
“The measures should be made more targeted to focus on industries or even occupational roles that will be important for Singapore, and help them tide over this current downturn,” he added.
Survey respondent Joe Anitha, the senior finance manager of IT solutions firm Computer Infotech, said setting up a presence outside Singapore is at the top of the company’s agenda for this year.
However, Mr Anitha said the firm has been told it does not qualify for available government grants and schemes aimed at helping companies go abroad.
He added that these schemes usually require participating firms to move into completely new markets, while Computer Infotech is keen on establishing a stronger presence in areas it is already exporting to.
These include Dubai in the Middle East, some markets in Africa, and closer to home, Indonesia and Malaysia.
“(The schemes) have the right recipes but need to be more tailored,” he added. Computer Infotech recorded sales of $23 million last year and employs 15 staff.
A separate poll also by UOB, which polled 150 respondents in senior management positions at local SMEs, showed that top reasons for expanding abroad include rising costs here, limited growth in the domestic market, and a shortage of skilled labour.
“Despite the cautious economic outlook, many of our SME customers tell us they want to tap new markets to access a larger consumer base and a bigger pool of skilled labou,” said Mr Mervyn Koh, UOB’s head of business banking in Singapore.
This article was first published on March 21, 2016.
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