Progress of SME Workgroup

Mr R Dhinakaran asked the Minister for Trade and Industry what is the progress of the SME Workgroup and how many businesses has the Workgroup engaged.

Mr R Dhinakaran asked the Minister for Trade and Industry (a) whether the SME Workgroup has any preliminary findings to share; and (b) if so, when and how will its findings be released.

Since its launch in September last year, the SME Workgroup has been engaging the SME community, and has reviewed the feedback from SMEs on Government policies and processes.

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To date, the Advisors in the Workgroup have conducted 17 outreach and engagement sessions, reaching out to almost 700 attendees from SMEs across a range of industries. When you take that with the other outreach efforts carried out with partner agencies such as SPRING and the outreach done by the various SME Centres, more than 5,600 SMEs have been engaged over 120 sessions since the launch of the SME Workgroup.

The SMEs had given feedback regarding rising costs, particularly from manpower, land and space constraints. In their engagement sessions, Advisors have also encouraged companies to restructure and improve productivity to address these challenges. We have also found that many SMEs are unaware of the various ways in which the Government can assist them in upgrading their businesses. The engagement sessions, with representatives from the relevant agencies, such as MOM, SPRING and WDA, have been most helpful in increasing awareness among SMEs about all the Government schemes. More SMEs are now aware that they can approach any of the SME Centres, which can provide guidance on which Government schemes are relevant for their needs.

The Workgroup will also recognise that our SMEs need to focus on growth in order to succeed. There are many Government schemes which our companies can tap on for growth, innovation and internationalisation. We will continue to monitor the needs of our companies, and study how these Government schemes can be enhanced to support our companies to tap growth opportunities. The Workgroup is an on-going effort. It is a long-term effort. We will continue to enhance the schemes and look at the challenges that are facing SMEs so that we can help the SMEs more effectively.

I thank the Minister of State for the reply. It is a good effort that you have met up with so many SMEs within the short period of four months, around 700 SMEs. How long do you think it will be before we can see progress in terms of productivity and capability building exercises by these SME Centres? Because of the tightening of the current labour quotas and labour issues, how do you plan to help them? Every SME faces only two problems – high cost of doing business and the labour crunch. Are there any special solutions which you are offering at this moment for all the SMEs?

I thank the Member for the question. SMEs face more than labour or cost of operations problems. They also face revenue and opportunity issues as well and competition from other companies or within the industry.

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The immediate issues are because of policies such as the tightening of foreign labour. We are also watching that to see what sectors are affected. We will be looking at the different schemes and a more targeted approach towards different sectors. We will see what are the schemes or programmes that can help them.

At the same time, SME Centres are reaching out to them, not just waiting for them to come. They are reaching out to them, to the small and even micro enterprises to help them understand some of the schemes that may be able to assist them through this transformation process. We need the SMEs to stay the course to be able to go through this transformation. It is not going to be very easy because that would also mean changing their process and their business models. The benefits of the productivity improvements take time to effect. The earlier they start, the earlier they can reap the benefits. That is what we are trying to encourage the SMEs to do as soon as possible.

We are looking at the different schemes and also to see what other areas in which we can help them. Most of the SMEs say they have accepted some of the facts where manpower would continue to be a constraint. They know they need to tighten the labour and increase productivity. Through the dialogue sessions, we see that they are accepting that. Now, is to be able to look at how, with the limited resources that they have, can they produce more with less; how can they increase their opportunities in internationalisation; how do they fund some of these opportunities. These are some of the schemes that we will be looking at to enhance. During the Budget period, we may announce one or two different programmes that can help the SMEs more effectively.