SMEs' Share of 4.5% Overall Labour Productivity Growth in 2017

Mr Thomas Chua Kee Seng asked the Minister for Trade and Industry (a) how much of the overall labour productivity growth of 4.5% in 2017 was attributable to our SMEs; and (b) what is the productivity performance of SMEs in the respective sectors.

In 2017, overall labour productivity, as measured by real value-added (VA) per actual hour worked (AHW), rose by 4.5%. Due to data collection constraints, data on real VA per AHW by firms’ small and medium enterprises (SME) and non-SME status are not available.

The Government also measures labour productivity in terms of real VA per worker. In 2017, real VA per worker in the overall economy increased by 3.8%. Based on the Ministry of Trade and Industry's estimates, SMEs recorded slightly lower real VA per worker growth of 3.2% in 2017. A breakdown of SMEs’ productivity performance by sectors is not available.

The Government has put in place several initiatives to support SMEs in raising their productivity. Across all sectors, SMEs can approach any of the 12 SME Centres for free business advisory services. The SME Centres collectively engage over 20,000 businesses each year through advisory sessions, capability workshops and outreach events. The number of SMEs that embarked on capability development projects with support from the SME Centres almost doubled from 600 in 2013 to 1,100 in 2017. SMEs can also approach experts at the two Productivity Centres for assistance in productivity solutions. The Singapore Innovation and Productivity Institute focuses on manufacturing, engineering, logistics and related industries, while the Singapore Productivity Centre focuses on the retail, food services and hotel sectors. SMEs can also leverage technology and digital solutions to raise productivity through schemes like the $110 million Productivity Solutions Grant for pre-scoped equipment and information technology solutions.

On top of these broad-based efforts, the Government works with industry and unions to foster improvements in Productivity, Jobs and Skills, Innovation, and Trade and Internationalisation within and across 23 key sectors, through the Industry Transformation Maps. JTC also works with industry to develop high-rise Innovative Facilities with shared services that help SMEs in the same value chain improve their land productivity and streamline production processes for higher labour productivity.

Our industry partners play an instrumental role in driving these productivity efforts. Trade Associations and Chambers (TACs) can spearhead industry-level initiatives, aggregate the needs of their members, and coordinate the deployment of solutions. To support our TACs across all sectors in these endeavours, Enterprise Singapore co-funds up to 70% of supportable costs through the $115 million Local Enterprise and Association Development programme.