Coordinated and Holistic Help for SMEs to Transform

Mr Thomas Chua Kee Seng asked the Minister for Trade and Industry (Industry) how can Government agencies be more coordinated and holistic when helping our SMEs to transform in an environment where many SMEs may have immediate concerns of survival.

Singapore is facing a period of slow growth. Some sectors have been more adversely affected, such as wholesale trade and marine and offshore engineering. We are also seeing weakness in industries like food services and real estate, though there remain bright spots, such as in the information and communications, education and health and social services sectors.

Against this backdrop, the Government is committed to supporting our small and medium enterprises (SMEs) in their growth and restructuring efforts. Our agencies have been working closely with industry partners, such as our trade associations and chambers (TACs), Centres of Innovation, SME Centres and financial institutions to reach out and provide assistance to our SMEs. Our agencies have coordinated their efforts to address needs at the industry and firm level.

At the industry level, we have embarked on a $4.5 billion Industry Transformation Programme where Industry Transformation Maps (ITMs) are being developed for more than 20 key industries. This involves a coordinated whole-of-Government effort in partnership with key industry partners and multipliers. Each ITM will be tailored to the needs of the industry.

In developing the ITMs, the Government will examine the industry landscape, the future trends and needs to set out a suite of initiatives to systematically raise productivity, develop skills, drive innovation and promote internationalisation, so as to catalyse transformation and achieve the stated vision of each industry. The ITMs are focused on providing more integrated assistance for companies across domains to ensure our industries can stay competitive in the medium term and our workers get to secure and retain good jobs.

At the firm level, our agencies work closely together on initiatives to better support our SMEs to address their immediate needs, such as in financing, as well as capability development and internationalisation, to position them for growth. In Budget 2016, we launched the SME Working Capital Loan (WCL) to help local enterprises access unsecured working capital financing during this period of slower economic growth. Under the WCL, enterprises can access a loan quantum of up to $300,000 for their daily operations. There has been a strong take-up for the WCL, and over $400 million in loans have been given to SMEs to date.

The 12 SME Centres provide first-stop assistance through one-to-one advice and guidance to SMEs, spanning immediate needs as well as business plans for the medium term. From 2016 onwards, the SME Centres will focus on enhancing business capabilities and driving the adoption of solutions to ensure that the assistance provided translates to tangible business outcomes for the SMEs. Through the SME Centres, SMEs have access to support schemes across Government agencies. These include support for capability development and internationalisation. To help more companies with capability development, SPRING introduced a simplified Capability Development Grant (CDG) application process for grants below $30,000 in 2015 to encourage more companies to take the first step to upgrade their capabilities in areas, such as productivity, financial management and human capital development. The response to this move has been positive. As of October 2016, more than 2,000 CDG projects have been approved.

Our TACs also play an important role as partners in providing assistance to SMEs. For example, through the TAC-led Collaborative Industry Projects, TACs will identify and drive the adoption of solutions to address common industry-specific needs. Since the launch of the programme in 2016, five TACs have embarked on projects which are expected to benefit 600 SMEs.

More recently, we have taken steps to make our grants more accessible through the Business Grant Portal (BGP). This is an online application platform for businesses to apply for grants across different Government agencies. Through the BGP, businesses can easily find the relevant grants to support their business needs, without the need to approach multiple agencies. The beta version of BGP was launched on 3 May 2016 with International Enterprise Singapore's Market Readiness Assistance grant and subsequently the Building and Construction Authority's Building Information Modelling grant, and over 900 applications have been received thus far. The BGP will be launched soon and businesses can expect more grants to be introduced onto the BGP progressively.

As we navigate the challenges ahead, the Government will need to work collectively with our companies, workers, unions and industry associations for successful economic transformation. It is critical that SMEs stand ready to embrace new technologies and business models and, on its part, the Government will remain firmly committed in supporting our companies through this phase.