Helping SMEs Cope with Lower Foreign Worker Dependency Ratio

Ms Tan Su Shan asked the Minister for Trade and Industry whether the Ministry is (a) considering new initiatives in the Government's Budget for FY13/14 to specifically help SMEs make the adjustment in coping with a lower foreign worker dependency ratio ceiling; and (b) planning to provide consultancy support to SMEs who seek help, specifically to identify opportunities to pursue productivity gains, especially in labour intensive industries.

SMEs that need help to identify opportunities for productivity improvements can seek assistance from the Enterprise

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Development Centres (EDCs). At these centres, Productivity Management Programme advisers conduct workshops to introduce productivity concepts to SMEs, help SMEs assess their productivity performance and advise SMEs on productivity improvement plans and implementation. SMEs can also tap on SPRING's Innovation & Capability Voucher (ICV) to engage consultants to help them upgrade their capabilities in innovation, productivity, human resources and financial management.

The Government also recognises that some SMEs may need more specialised and in-depth consultancy support, and has set up productivity centres to address the challenges faced by each sector. Two productivity centres have been set up for the Construction and Manufacturing sectors. A third centre for the Services sector, initially focusing on Retail and Food Services, will be launched this year. These three and future centres conduct industry-specific productivity diagnosis and improvement projects. They also train and develop productivity consultants and managers to facilitate the adoption and implementation of productivity initiatives.

In addition, we are building up a pool of industry-specific productivity consultants. SPRING has engaged the Japan Productivity Centre (JPC) to develop and train productivity consultants for the local Retail and Food Services sectors, which comprise mostly SMEs. The Building and Construction Authority (BCA) will also introduce a training course to educate small builders and subcontractors on construction productivity.

Apart from consultancy support, the Government also offers various schemes for SMEs to build up capabilities and improve productivity, so that they can restructure, reduce dependence on manpower, and achieve more sustainable growth. For example, SPRING and IE Singapore offer a suite of capability development schemes that companies can tap on. These schemes cover a wide range of areas, such as branding, technology adoption, innovation and service quality. Last year, we increased the grant subsidy rate for these schemes from 50% to 70%, for three years.

Yes, we will consider initiatives to help SMEs as part of the Budget exercise.

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