Question
Ms. Tan Su Shan: To ask the Minister for Trade and Industry how can the Government encourage bigger businesses to give local smaller firms an equal chance to become a preferred provider that will provide these smaller players a useful headstart to evolve into our next generation of global enterprises.
Oral Reply by Mr. Teo Ser Luck, Minister of State for Trade and Industry
The Partnerships for Capability Transformation (PACT) programme was introduced in 2010 with a budget of $250 million under EDB to incentivise large companies to work with smaller companies to raise the latter’s capabilities, and enable them to become preferred suppliers. The PACT programme was further expanded last year, with an additional $60m over three years set aside for SPRING to engage companies beyond manufacturing sectors, and support co-innovation between large and small businesses.
PACT helps smaller firms in three ways. First, PACT helps large firms to identify and partner local suppliers, and helps these smaller suppliers learn best practices from the large enterprises. Second, PACT provides support for SMEs to upgrade their capabilities to meet global standards and become qualified suppliers of large companies. Third, PACT supports co-innovation projects where large organisations and SMEs work together to test-bed technologies. This helps SMEs build up their portfolio and track record.
The take-up rate for PACT has been encouraging. Over the last year, 40 large organisations have signed up for more than 50 PACT projects, with another 70 projects in the pipeline. The ongoing PACT projects are expected to benefit more than 300 smaller companies.
The Government also supports joint overseas ventures in order to develop global companies. IE Singapore's Global Company Partnership (GCP) grant supports companies working as a group to land overseas projects, allowing large companies to undertake internationalisation activities jointly with smaller companies, and share costs. Support under the GCP includes prototyping and market testing for products, as well as overseas attachments to large companies to acquire new technologies and capabilities.