Industries to consider working in - Singapore Budget 2015

The Budget was finally announced and while we await eagerly more details from respective statutory boards and ministries, there are tell-tale signs that we can pick up to predict how the job market might evolve into.

Granted we can only see the success 5 years down the road, no one ever loses by over-preparing themselves for the imminent changes. The last thing you want to happen is to be caught late in the game when everyone else has pivoted off in another direction.

History has shown us how painful changes, whether they are unintended (recessions that forced many financial institutions to fire en masse) and intended (tightening of foreign workers quota that led to slow/negative business growth and resulted in cost cuts, which include Singaporean managers).

Here are some of the signs I picked up that you might want to contextualise into your personal situation and assess accordingly:

Industries

Government policies (directly and indirectly) have always determined the fate of numerous industries. Look at the cooling measures on the property market. It resulted in huge departure of property agents.

As at 1^st Jan 2015 there are a total of 30,830 registered agents, down from 31,783 in the previous year. This is according to Council of Estate Agencies. More agents also did not renew their registration, from 3,382 in 2014 to 3,959 in 2015. Number of entrants into the industry also fell from 3,336 to 3,006.

It would be naïve to overlook the impact this Budget would bring to certain trades and industries:

1. Education institutions – Especially those that are providing courses supported by government agencies. The SkillsFuture credits can be used on such training and education. With the target market having more spending power, you can expect educational institutions to sprout up or ramp up their operations. In addition, there will be Enhanced Subsidies for Mid-Career Singaporeans. Again benefiting companies that provide trainings for such customers. If we apply June 2014 population data by Department of Statistics, we are looking at 2.82 million of qualified citizens. Multiply that by $500 each (and that is only the first top-up), you are looking at a mind-blowing injection of SGD$1.4 billion into the education and training industry alone. And the number of qualified citizens will go up as they grow into 25 years old.  Remember what they say, education is a recession-proof business. It is made even so with this booster from the government. Verdict: Join!
2. Childcare – There are also plans to provide more affordable, quality childcare at a tune of $50 million per year over the next 5 years. Participating centres would have to charge at an “affordable” price in order to participate in the new Partner Operator (POP) Scheme. As the Ministry of for Social and Family has yet to announce details as the time of writing, it is unclear how the new scheme could benefit centres from a business perspective. If we were to use the Anchor Operator (AOP) Scheme as reference, centres could look forward to government grants and subsidies that help reduce operating costs. I reckon this would be more applicable for mid-to-low tier childcare operators that cater more at the masses. Your premium players will not budge since they are capable of charging premium dollars. Verdict: Wait and see
3. Business consultancies – The last time PIC application process was simplified, adoption went through the roof. By doing likewise for CDG, we can expect the same to happen. Given the scope of CDG, beneficiaries would be in the consultancy business that covers the ten CDG development areas (Brand Development, Business Excellence, Business Innovation, Enhancing Quality and Standards, Financial Management, Human Capital Development, Intellectual Property & Franchising, Productivity Improvement, Service Excellence and Technology Innovation). Providers that touch on one or many of these areas can look forward to an injection of approximately $600 million over the next three years. Verdict: Join!
4. Start-ups – The government will pilot a venture debt risk-sharing programme. This basically means it will split the risk with banks to lend money and these are aimed at start-ups. With much emphasis on the start-up scene even prior to the Budget, another injection of $100 million over three years could very well give it another boost. This includes the Business Angel Scheme that will get a top up. But do realise that there are more failed start-ups than successes. Verdict: Join if you have a high risk appetite!
5. Internationalisation experts – Companies that do market research for business overseas expansion and provide Merger & Acquisition services would be smiling as government raised their support for SMEs for all activities under IE Singapore’s grant schemes from 50% to 70% until Mar 2018. Double Tax Deduction is also enhanced together with the introduction of a new International Growth Scheme. The signs are all there to encourage Singapore companies to go beyond our shores. And if that is too slow, how about the increment of the tax allowance for acquisition costs from 5% to 25%. All these are projected at a tune of $340 million. With local businesses still unable to restructure quick enough, their best bet might be to look at an external market (or support centres). The M&A and business expansion specialist can look forward to a bumper year. Verdict: Join!

These are simply based upon Budget measures. It doesn’t take into account other external factors such as market conditions and also business sentiments. Apply your best weighted judgement before you decide to jump into any of them.