SINGAPORE - Fewer Singapore businesses are planning to venture overseas, with large companies a tad more cautious than their small and medium-sized counterparts, a survey by the Singapore Business Federation (SBF) showed.
Overall, the proportion of domestic companies planning to make a foray abroad fell to 57 per cent in 2023, down from 65 per cent in 2022, according to the latest National Business Survey released on Jan 5.
The poll of more than 1,000 respondents, conducted between September and November 2023, registered a negative 10 percentage point swing among large companies, down to 52 per cent, while small and medium-sized enterprises (SMEs) saw a smaller 8 percentage point decline, dipping to 58 per cent from the previous survey.
The key reasons for the retreat included the familiar unpredictable demand in foreign markets, insecurity over partners amid a more fragile business backdrop and costs linked to setting up an overseas operation.
The findings also revealed new fears, such as a dearth of managers and skilled workers to run external business units, a paucity of funding, as well as the lack of regional cooperation.
SBF chief executive Kok Ping Soon said: “While geopolitical and economic uncertainties have dampened businesses’ interest in internationalisation, expanding overseas is imperative for the growth of our companies.”
The apex business chamber adopts a multi-pronged approach to helping local companies take that first step, including organising familiarisation trips, operating a network of regional centres that act as pathfinders, and hosting events and conferences to bring together like-minded entrepreneurs from at home and abroad.
On the cards are more than 20 overseas business trips that will “help our companies identify growth opportunities in key markets”, Mr Kok said.
He added that SBF’s team of market advisers and its Singapore Enterprise Centres in Jakarta, Bangkok and Ho Chi Minh City also “stand ready to help companies navigate the complexities of operating in those markets”.
“We will continue to curate platforms – both locally and externally – to expose our businesses to overseas opportunities and connect them to potential partners.”
For example, SBF will host two key events in 2024: its flagship Singapore Apex Business Summit in July and its Asean Conference in September.
SBF’s programmes have already helped some 76 per cent of local businesses spread their wings in 2023, with companies of all sizes extending their foreign presence, up from 74 per cent in the previous poll. All of these businesses said their foreign operations had contributed to their overall revenue.
More than half of the respondents attributed 40 per cent and above of the topline to their overseas takings, another 14 per cent posted between 20 per cent and 39 per cent more, while the remainder made less than 20 per cent from abroad.
Meanwhile, the survey’s other key findings include a dimmer business outlook for 2024, with 30 per cent of SMEs and 22 per cent of large firms expecting the economy to worsen.
Sector-wise, both IT and professional services, as well as manufacturing, were more bearish. In contrast, their counterparts in construction and civil engineering, banking and insurance, as well as logistics and transportation, were more upbeat about the year ahead.
Top challenges businesses face remain largely unchanged, led by rising business and rental costs, as well as the ability to retain workers, although the proportion of those who felt this way was marginally lower than in 2023.
In terms of priorities, the main focus among businesses across the board was largely financial, with 76 per cent of respondents citing revenue growth, 62 per cent citing cutting costs, and just under 60 per cent giving prime importance to ensuring positive cash flow.
Separately, SBF will publish its Budget 2024 wish list on Jan 8, focusing on how the Government can help local businesses overcome their main difficulties through the various schemes and assistance mechanisms.
“Government support for companies to address today’s cost challenges, while equipping them with required capabilities in digitalisation, internationalisation and ESG (environmental, social and governance), will be needed for businesses to be competitive and future-ready,” Mr Kok said.
