Distinguished Guests,
Ladies and Gentlemen,
Good Morning.
1. I am very happy to join all of you today at this year’s inaugural SME Centre Conference jointly organised by the SME Centres.
Government’s Assistance to Help SMEs Innovate
2. SME is a big topic. We will never be able to solve all the problems but we always try our best to. This year’s Budget statement has just been completed and SME issues occupied a large amount of our time during the parliamentary sessions. Many Members of Parliament are concerned about our SMEs, especially the micro enterprises and the challenges they are facing, such as the costs of doing business. Our economy is undergoing a restructuring and our companies need to level up. SME Centres play an integral role in this. Our schemes and programmes would not have been as successful without them.
3. We have talked about the need for businesses to be productive. To be productive is to do more with less. Does this mean we squeeze businesses out or do we encourage them to refresh and reinvent? We hope that productivity comes about through innovation but innovation is a challenge in itself. It requires thinking out of the box and doing something that is different. Many companies usually tap on productivity schemes to defray costs. However at the end of the day, whatever schemes the companies tap on and invest back into the business should prepare them for the challenges of the future. Your competitors are always doing something different. We have come across companies doing things in innovative ways, even small companies, and it is really an eye-opener.
4. I am glad that many of our SMEs have taken up different productivity schemes, from Productivity and Innovation Credit (PIC) to vouchers. Many SMEs have provided feedback on this year’s announcements and one initiative that was well received was the extension of the PIC scheme by three years. This extension means businesses are given more time to implement changes. There are a lot of schemes and we are trying to figure out different ways to help businesses tap on them. For instance, not everyone needs to apply for PIC as there are other schemes that may be more applicable. This year, we introduced PIC+. Hopefully with this support, it will enable SMEs to make larger investments.
5. SPRING has also enhanced the Innovation and Capability Voucher (ICV). To put it simply, every company is entitled to eight vouchers. Each voucher is $5,000, hence companies can get up to $40,000. With the enhancement, two out of eight vouchers can be used to purchase equipment, machinery and other things you may need for your business. Because of the amount and ease of application, microenterprises are really suited to use it. Many of them do not know of ICV though, which is understandable as they are busy running their business every day. But they would want to know how to apply for the voucher after learning about it. Hence we need to do more outreach and engagement. That is why SME Centres are really important.
6. We have examples of companies that have started to use our schemes. Skylace Language School is a SME which has taken its first step towards improving its business productivity by utilising the ICV. The school employs 14 teachers and operates five enrichment centres which offer Chinese enrichment classes for children. It also provides training for teachers. Through an ICV consultancy project, Skylace conducted a business diagnosis on its management and business operations and identified areas for improvement. These areas included improving its retention strategy, streamlining its processes and better management of data for greater competitiveness in the market. Skylace is now planning to tap on the enhanced ICV to follow up on its consultancy project and implement solutions like software programmes for streamlining its existing processes, and creating a centralised database for ease of information management and marketing purposes.
SME Centres play crucial role in developing SMEs
7. As mentioned by Mr Lau earlier, the SME Centres play a crucial role in Government’s support to SMEs. Many of our SMEs are not familiar with the various government schemes which are available. They are now able to approach any of the SME Centres as the first point of help for customised assistance such as business diagnosis services, and seek advice on how they can tap government assistance schemes. The SME Centres also frequently hold workshops to help SMEs in areas where there are capability gaps, such as business management and financial knowledge. These workshops are very well attended. Last year, the SME Centres trained some 1,000 SMEs on such business capability development areas, and assisted over 20,000 SMEs[1].
8. In addition to having five SME Centres hosted by each of five major Trade Associations and Chambers[2], we have also set up satellite SME Centres across Singapore. Our SME Advisors go out to smaller heartland businesses, as well as industrial areas, to engage them. Our Advisors work really hard. We now have a total of 12 touchpoints located across the island, including seven satellite SME Centres in the heartlands. We will further enhance access by having an additional 3 satellite SME Centres this year, bringing the total number of SME Centre locations to 15.
9. Earlier this month at MTI’s COS, I introduced a new SME booklet which summarises key government schemes available to businesses. The booklet contains an overview of the locations and contact details of the SME Centres. It also provides SMEs with information on both existing and new government assistance schemes at a glance. There is also a section on frequently asked questions. . We will be distributing this to SMEs through the trade associations and chambers, as well as the SME Centres.
Companies have benefitted from the SME Centres
10 There are more examples of companies which have benefitted from SME Centres. One such company is Arrow Tyres Pte Ltd. The company was co-founded by Mr Alvin Boey in 2009. This small company with 13 employees is in the business of installing car tyres and rims. Changing car tyres is a labour intensive exercise. When the change involves run-flat-tyres, more than two employees may be required as these tyres are more difficult to remove. With rising manpower costs and a desire to improve productivity, Mr Boey wanted to find a better way to change the tyres and rims. With assistance from the SME Centre@ASME, Mr Boey invested in a machine that allows just one employee to change all four run-flat-tyres with ease. This new machine increased the company’s process efficiency by 40%. The SME Centre business advisor also helped Mr Boey to apply for PIC to offset part of the cost of the machine. As a result of automation, his company is able to free up manpower to serve even more customers. Servicing turnaround time has also been dramatically reduced, leading to higher customer satisfaction.
11. Another company that has benefitted from assistance from the SME Centres is O.E. Manufacturing Pte Ltd. The company is a manufacturer and service provider of hydraulic cylinders. Mr James Wong, the owner, approached the SME Centre@SCCCI to learn more about how he could increase his company’s efficiency. The business advisor helped Mr Wong analyse the factors affecting his company’s productivity. The analysis uncovered inefficient work processes, wastage and low value-added activities that hampered the company’s productivity. Mr Wong was advised to focus on inventory management and to revamp his housekeeping practices. Now, his workplace is well organised and his employees are able to retrieve goods faster and more accurately, resulting in 20% productivity increase for his company.
12. The examples of Arrow Tyres Pte Ltd and O.E. Manufacturing Pte Ltd show that the SME Centres play an important role in providing SMEs with professional advice. The SME Advisors also shared with us their experiences on the ground. One common feedback they hear is that our SMEs are busy and do not have time to think about changes. But it is important to do so. The sooner you do it, the earlier you enjoy the benefits. Our businesses often do not have a long term vision and this is more prevalent especially among the microenterprises. But businesses need to realise that change is not just about scale. It is for survival too. Hence we need our SMEs to step forward and make the change.
13. We are also encouraging SMEs to go overseas. One of the solutions to tap on is IE Singapore’s Market Readiness Assistance (MRA), which provides support for business matching, tax advisory and legal advice for overseas expansion.
Conclusion
14. In conclusion, let me thank the Chamber and Association Partners for their strong support all these years, and acknowledge the hard work of the SME Centres staff. This journey of restructuring and transformation is not at the finishing line yet. But the government is here with you. However for us to help you, you have to first help yourselves. I urge all SMEs to tap on our schemes and take full advantage of the services available at the SME Centres. Thank you.
[1] [1] Breakdown of 20,000 SMEs: Enterprise Development Centres (EDCs) assisted 7,000 SMEs (Jan – Mar) and SME Centres (expanded from EDCs) assisted 13,000 SMEs (Apr-Dec).
[2] Participating Trade Associations and Chambers are: (i) Association of Small and Medium Enterprises (ASME); (ii) the Singapore Manufacturing Federation (SMF); (iii) Singapore Chinese Chamber of Commerce & Industry (SCCCI); (iv) Singapore Indian Chamber of Commerce & Industry (SICCI); and (v) Singapore Malay Chamber of Commerce & Industry (SMCCI).