Opinion: The Business End of Budget 2019

This is an opinion by SBF CEO Ho Meng Kit. Any extracts should be attributed back to the author. 28 February 2019.

Singapore Business Federation CEO Ho Meng Kit shares his thoughts on the Budget 2019 announcements.

Singapore Business Federation CEO Ho Meng Kit shares his thoughts on the Budget 2019 announcements (Photo credit: SBF).

Following the Budget 2019 announcement by Finance Minister Heng Swee Keat, we find out what stood out for businesses and the value that can be brought to workers too.

Singapore Business Federation (SBF) CEO Ho Meng Kit shares his perspectives.

How would you describe the current business landscape in Singapore?

Amid a landscape of uncertainty, the Singapore economy slowed from 3.9 per cent in 2017 to 3.2 per cent in 2018. Further softening is anticipated in 2019, as US-China trade tensions, a potential no-deal Brexit, China’s slowing growth and other headwinds continue to keep sentiments muted.

However, we would be underselling Singapore if we start thinking of the country as being characterised by mediocre growth of between 2 per cent and 3 per cent. As mentioned by Minister for Finance Heng Swee Keat, one of the visions of Budget 2019 is to develop Singapore into the global Asia hub for innovation, technology and enterprise.

The Government has launched and expanded numerous schemes to systematically develop deep enterprise and worker capabilities, build strong partnerships locally and worldwide, so as to drive SME growth and internationalisation. SMEs account for about 99 per cent of firms in Singapore, employing some 65 per cent of our workforce, and accounts for nearly half of the country’s GDP (Gross Domestic Product). So, it is critical for us to ensure that they succeed and flourish.

At the broader level, we are still seeing growth in the region. At 5 per cent to 6 per cent growth, ASEAN is still going strong, while Chinese growth may have tapered, it’s still a robust 6 per cent – not a small number by any measure. Given such growth in the region and the various measures introduced by and enhanced through Budget 2019, I believe that the current slowdown is only temporary.

On the contrary, there are in fact plenty of opportunities ahead. With our network of 23 bilateral and regional free trade agreements and economic partnership agreements, Singapore can in fact become an ideal nexus for companies looking to enter Asia and vice versa.

[Read More: Catch up on the Budget 2019 announcements here.]

What are some of the biggest challenges businesses face?

One of the biggest challenges local SMEs face is that of digitisation and adopting technology to improve work processes.

According to SBF’s National Business Survey (NBS) 2018/19, a top priority among our companies is the Government’s support for accessing new and critical technology. Our businesses want more support for their transformation and innovation efforts to enhance efficiency, build resilience and develop competitiveness.

Hiring and retaining skilled manpower continues to be a key challenge for many of our businesses. Among the key challenges faced, according to the SBF NBS 2018/19, were the lack of suitable manpower with technological expertise and the retraining of workers to develop their digital skills. This is an area where more support measures such as education and assistance for companies to redesign jobs or retain and train mature workers will be helpful.

How do you think businesses can transform and grow with the technology-focused initiatives announced in Budget 2019?

New measures such as the Scale-up SG Programme, Innovation Agents Programme and Digital Services Lab will best meet our members’ aspirations.

The Scale-up SG Programme, for example, which provides customised support to high-growth companies could see more Singapore-based unicorns emerge. As they scale up swiftly, they will in turn, generate good jobs, better career opportunities and wage progression possibilities for Singaporeans.

The Digital Services Lab, which encourages collaboration between the industry and research community, will also help our companies to co-develop digital solutions with sector-wide impact.

With the expansion of the SMEs Go Digital Programme, more sectors, such as accountancy, sea transport and construction, will get their own industry digital plans that will guide them on relevant technologies and skills training programmes. Our SMEs will also have access to a wider range of affordable, off-the-shelf digital solutions and we hope they will take advantage of the programme to boost digital adoption.

How do you think businesses can tap the enhanced Enterprise Development and Productivity Solutions Grant?

The Enterprise Development Grant (EDG) is a broad-based programme that provides funding for firms to enhance core capabilities, innovate and improve productivity, and gain access to overseas markets. The Productivity Solutions Grant (PSG), on the other hand, is more specific in that it supports companies keen on adopting IT solutions and equipment to enhance business processes.

While the EDG is aimed at helping companies develop strong business foundations and strategies, adopt technology and innovative processes, and grow their overseas presence, the PSG can be viewed as a technology enabler. Both grants can be used in tandem.

Budget 2019 had a strong focus on both businesses and workers.

Budget 2019 had a strong focus on both businesses and workers.

As workers are key to helping businesses succeed, how do you think businesses can develop their worker’s skills and talents?

When we help workers, we’re also helping businesses, and vice versa. As Minister Heng said, “stronger companies provide better jobs and pay for workers, and highly skilled workers make companies stronger.”

Businesses can tap on the Professional Conversion Programmes that will be launched for new growth areas. A new Global Ready Talent Programme will streamline existing schemes to support students and professionals in gaining international experiences through internships and job postings. As companies prepare to internationalise, they should also put in place a global-ready workforce.

As businesses grow, how can they enable their workers to grow together with them?

As Minister Heng said in his Budget speech, all transformation efforts supported by Enterprise Singapore’s EDG must include positive outcomes for workers, such as wage increases.

As companies grow their revenues and widen profit-margins, workers who contributed to the success ought to be correspondingly rewarded as well. This is one of the most basic factors that maintain staff motivation.

Beyond monetary rewards, other factors such as job satisfaction and engagement are important too. What businesses need to do is to automate mechanical tasks, redesign jobs, and reskill employees so that they can do higher-value work. That way, they can enjoy better salaries and better career prospects. The end goal is to ensure that workers continue to have good jobs and opportunities, even as the company grows.

How do you think businesses can work together with the unions and industry associations to develop workers and grow together?

Besides workers and companies, Budget 2019 also addresses another key player in our industry transformation efforts – the trade associations and chambers (TACs) who play an important role in helping their members build capabilities and improve access to local and international networks.

We are encouraged to hear that the Government will strengthen its support for TACs through the Local Enterprise and Association Development programme. For our industry transformation efforts to bear fruit, our enterprises and TACs, workers and unions, and the Government must continue to work closely together. SBF looks forward to close collaboration with our members and the Government to create more opportunities for our businesses and workers.

What are the initiatives that stood out for you from the Budget 2019 announcement?

The Scale-up SG Programme is significant in the sense that it recognises the urgent need to accelerate the growth of high-potential companies. Tech start-ups are in a race to define new products and wants, and the pace has quickened. In a business landscape shaped by ideas, it is important for us to help our SMEs bring theirs to fruition quickly.

Their success will in turn generate good jobs, better career opportunities and wage progression possibilities for Singaporeans.

 

Share this story: