Small and medium-sized enterprises (SMEs) are the primary focus and comprise the largest beneficiaries of the economic measures laid out during Budget 2017 and in the Committee on the Future Economy report.
It may therefore not come as a surprise that the Ministry of Trade and Industry unveiled plans to merge IE Singapore and Spring Singapore recently.
We believe the merger will benefit SMEs. Many firms across different industries have told us that they would feel more assured if there is one specific agency tasked with supporting their growth and related needs.
SMEs are often faced with increasingly complex challenges, such as manpower constraints, rising costs and relentless competition from bigger companies. They are also under pressure to deliver improved results, increase customer satisfaction, improve competitive standing and enhance productivity.
IE Singapore facilitates the overseas growth of Singapore-based firms and promotes international trade, while Spring Singapore helps to facilitate the growth of industries within Singapore and enhance the capabilities of local enterprises.
We hope that with the merger, there will be more targeted support for developing our SME ecosystem.
Policy must be more nimble and adaptable to address SME needs.
First, there is a need to shift away from the "one-size-fits-all" approach and adopt more targeted measures.
Instead of a broad brush, a more holistic policy framework should address the various stages in a company's life cycle - from inception to full-scale operations to venturing abroad - and provide targeted support accordingly.
This is especially necessary since SMEs may have limited capacity to do long-term planning due to an intense near-term focus on survival.
Second, many companies we spoke to are aware of the well-intentioned government grants, but have often found the application process complicated and time-consuming.
SMEs were often asked for supporting proof, and often did not have the capacity to meet the high bar set. There is a need to streamline the application process in order to maximise benefits.
Third, productivity-enhancing schemes need to be targeted and offered over the entire lifespan of a company, given that the productivity push should be continual, instead of having broad-based measures that reward spending with specific expiry dates.
Targeted schemes are important and can be highly effective. However, they normally entail an approving authority deciding what qualifies for the benefits and what doesn't. This also involves an application process.
The Business Grants Portal eases the administration process, but a potential problem may arise if we have 10 different schemes administered by five different agencies. Companies could end up with 50 different sets of qualifying criteria for schemes.
With the merger, a possible solution is to set up a team specialising in grant applications for start-ups and SMEs, and park the entire spectrum of available grants and incentives under this team. This would allow SMEs to fully tap the existing benefits.
The role of the agencies should be to facilitate the growth of promising Singaporean enterprises and help them translate their entrepreneurial energies into tangible products and services, and provide a boost to our local economy.
- The writers are head of tax and head of enterprise at KPMG Singapore respectively. This is an edited version of a commentary that first appeared in The Business Times.