Singapore reveals comprehensive plan to support SMEs in 3 focus areas

Namely productivity, innovation and capability upgrading.

The Ministry of Trade and Industry (MTI) has announced a series of measures to enhance support for small and medium enterprises (SMEs) to restructure and achieve quality growth.

MTI said SMEs can look forward to enhanced support in three focus areas. First, more support will be provided in the areas of productivity, innovation and capability upgrading. For example, a new SME Talent Programme has been introduced to attract talent from the Institutes of Technical Education (ITEs) and Polytechnics to work in SMEs upon graduation.

Second, to help SMEs seek new business growth opportunities, assistance programmes to encourage internationalisation and promote collaboration between larger enterprises and SMEs will be enhanced.

Third, the Government will work towards creating a more conducive business environment by simplifying SPRING’s assistance schemes for SMEs and enhancing the existing Enterprise Development Centres (EDCs) into one-stop, integrated SME Centres.

The additional support arises from a review of strategies for the SME sector. The review started in April last year and was undertaken by MTI, SPRING Singapore and International Enterprise (IE) Singapore, in close partnership with stakeholders from the SME community. They aim to enhance assistance for SMEs to transform their businesses, and help them overcome some of the key challenges that they are facing. 

“The SME sector is an important pillar of Singapore’s economy. They contribute more than 50 per cent of economic output and 70 per cent of employment. The review of the development strategies for our SMEs aims to help them strengthen their business competitiveness. I urge all SMEs to invest in skills upgrading, new technologies and innovative processes, and to tap on the various schemes available to step up productivity improvements. The Government will support our SMEs in their move to intensify their business transformation to achieve quality growth,” said Minister of State for Trade and Industry, Mr Teo Ser Luck.

Here is the comprehensive SME roadmap from MTI:

Encouraging productivity and innovation. As announced in Budget 2013, the Government will introduce a Productivity and Innovation Credit (PIC) bonus. Companies that invest a minimum of $5,000 in productivity and innovation activities in a year will receive a cash bonus equivalent to the amount spent. The bonus will be capped at $15,000 over three years of assessment, from 2013 to 2015. It will be paid over and above existing PIC benefits. This will help SMEs defray the cost of implementing their productivity improvements.

In addition, the PIC will be expanded to include Intellectual Property (IP) in-licensing. This will help SMEs innovate and develop new products. With this, SMEs can claim 400% tax rebate and/or 60% cash payment when they inlicense the IP for application in their business. This will lead to lower costs as companies embark on innovation. In addition, the capital allowance under PIC will also be enhanced to include more automation equipment such as basic tools of trade to improve productivity.

Encouraging industry collaboration for productivity improvements. To encourage industry collaboration for productivity improvements, the
Government will work with industry players and partners such as Trade Association and Chambers (TACs), to identify sector-wide productivity issues faced by companies. Consortia comprising solution providers and users will be formed to come up with initiatives with deployable and scalable solutions that can be adopted to improve productivity within the sector. The Government will co-fund the development and adoption costs of these solutions.

Nurturing talent for the SME sector. SMEs can expect a flow of talent with the new SME Talent Programme targeting ITE and Polytechnic students. Jointly administered by SPRING and TACs, the programme enables SMEs to attract and recruit local talents early by  sponsoring a study award for students, followed by a job opportunity upon graduation. This will help SMEs build a strong core of local talents for sustainable business growth. 

Seizing Opportunities for Growth. SMEs looking to grow their business overseas can get easier and faster help with the new Market Readiness Assistance Grant (MRA Grant). SMEs accessing markets can tap the grant to get advice from pre-approved consultants on areas like market assessment, market entry and business restructuring through internationalisation.

Recognising SMEs’ lack of resources in seeking business leads overseas, SMEs will get greater support for in-market business development. The Government will fund TACs through the Local Enterprise and Association Development Programme (LEAD) for in-market intermediaries to help SMEs identify and harness business opportunities.

SMEs can also access more business opportunities by tapping on the enhanced Partnerships for Capability Transformation (PACT) scheme, which has been expanded beyond the manufacturing sector. The enhanced PACT scheme will support collaboration projects between SMEs and large
enterprises in areas that involve co-innovation, technology test-bedding, knowledge transfer and sharing of best practices. Such collaboration projects will help SMEs build a better track record and expand their businesses.

The Government will also continue to provide support and extend outreach to high-growth enterprises to help them become the next Singaporegrown MNCs of the future.

A More Conducive Business Environment. To help SMEs better access government assistance, SPRING has undertaken an exercise to streamline its schemes. The various grant programmes offered by SPRING have now been streamlined into one main Capability Development Grant (CDG), which supports SMEs in their productivity improvement and capability development efforts. This will make it easier for SMEs to apply for government assistance as they no longer need to decide upfront which programme to apply for. SPRING has also shortened and standardised its application forms to two pages, and will be introducing a new online grant portal to reduce paperwork for businesses. The CDG will take effect from 1 April 2013. Please refer to Annex 6 for more information on the

Streamlining of Schemes. Currently, SMEs that need assistance can approach any of the Enterprise Development Centres (EDCs) for advice. In future, these EDCs will be expanded into integrated one-stop SME Centres, where SMEs can access information, seek advice on a wide range of assistance programmes from relevant government agencies and private-sector organisations. Such centres will also extend outreach to more businesses, providing more concerted government help and easier access to the schemes.