For small and medium enterprises to be more competitive, they must do more to cooperate with other enterprises, said Finance Minister Heng Swee Keat yesterday.
"Many enterprises in big countries are competitive because they are able to cooperate to venture into new territories," he said at the Lianhe Zaobao Singapore Budget 2016 Business Forum.
Mr Heng, who spoke in Mandarin, cited his experience meeting Wenzhou businessmen who make fire-lighters. "I was very impressed and asked them how their ministry of trade had managed to bring them together."
To his surprise, they told him that they had organised the expo in a huge conference hall on their own to make it more convenient for clients to see their products without having to visit them one by one.
"Similarly, I hope that our small and medium enterprises (SMEs) can come together and develop together," Mr Heng said.
Cooperation through facility sharing could be a way to offset higher operating costs here and help homegrown firms be more competitive globally, he added.
As for domestically-oriented companies, Mr Heng urged them to improve productivity and innovate through technology or new business models.
To that end, he revealed that he had asked Senior Minister of State for Finance Sim Ann and president of the Singapore Chinese Chamber of Commerce and Industry Thomas Chua, to form a group under the Committee on the Future Economy to look into helping SMEs innovate.
Mr Heng emphasised that SMEs have different needs and that the group is looking at SME needs in different sectors.
He said that for instance, it might be beneficial for SMEs in some sectors to collaborate with bigger players. The Government is also looking at simplifying policies and processes for grant applications to help SMEs, he added.
Close to 300 participants attended the forum which included industry expert talks on how SMEs can navigate tough business conditions.
Many participants were pleased to hear of the Government's focus on SMEs, but voiced concerns on rising labour costs, such as the foreign workers' levy rates which are slated to rise on July 1.
Architect Chng Beng Guan said that while he understood the Government's rationale for the levy to encourage automation, some smaller contractors taking on smaller projects are not able to make use of automation without the scale to do so.
Others like Mr Tan Nam Sing, who owns a business which conducts swimming lessons for children, said the firm was looking to internationalise, but that he had heard little from the Government on SMEs in the service industry.
"It would be good if the Government would explain how SMEs in services can tap on these government schemes," he said.