Small businesses need a mindset shift, says report
Smaller firms here are missing out on the vast opportunities in emerging Asia because they are not as aspirational about expansion as their regional counterparts.
That is the view of the authors behind a new Boston Consulting Group (BCG) report, who warned that a mindset shift is necessary for small and medium-sized enterprises (SMEs) to escape their comfort zone and tap the region's full potential.
The report, which was launched over the weekend in conjunction with the Singapore Summit forum, found that emerging Asia's lack of infrastructure, talent and clear regulation can stymie business expansion.
But firms that want a piece of the region's rapid growth should not wait for these pieces to fall into place.
The report's authors studied companies that have been successful in the region and noted that they have one thing in common - rather than being paralysed by the region's many obstacles, or waiting until local conditions are friendlier, they helped to shape the environments around them.
"We found that companies need to have a different mindset if they want to succeed in Indonesia, Malaysia or China, compared to Europe, the United States, Hong Kong or Japan, where all of those things are more or less in place," said Mr Christoph Nettesheim, senior partner and managing director at BCG Singapore.
While it is tougher for SMEs to change existing regulations and infrastructure, "it starts with a mindset shift", said fellow co-author Michael Meyer, a partner and managing director at BCG Singapore.
"As an SME, will you be able to replicate (what these successful companies did)? Probably not to the same extent.
"But it starts with a mindset shift. Be aware of the barriers and address them, and also be aware of your competitive advantage," he said.
SMEs here can leverage on Singapore's reputation for quality and trustworthiness, added Mr Nettesheim.
Singapore is a "big exception in the region", he said, noting that firms and governments look to it to export their capabilities.
However, "there is a risk that companies which start here might assume that the operating models they have used here will work elsewhere".
Success in the region boils down to adaptability and a strong vision, added Mr Nettesheim.
In the oil and gas sector, for instance, large Singapore firms like Keppel are making waves globally but there are also significant opportunities for SMEs in the consulting or engineering segments.
"There are many more opportunities for smaller companies if they would be as aspirational as some of their counterparts in Indonesia, Malaysia and China," he said.
"They have so much more knowledge and experience than others in the region, so they could reshape the environment. But I don't see enough of that going on."
Mr Meyer agreed: "We often hear that it's difficult to get Singaporean talent to agree to go overseas. Instead people commute, they're not on the ground.
"This ties back to the infrastructure and regulatory certainty we're used to in Singapore.
"We need a mindset shift in order to deal with these different environments."