Budget 2016: Businesses must take next step

Despite the gloomy economic outlook, Singapore is not only persevering with its restructuring plans but also entering a new, more advanced stage of the game.

The Government embarked on its economic restructuring journey in 2010 by urging local businesses to raise their productivity and take the first steps towards innovation, research and development, and automation.

But five years on, it is signalling that it is time to take things to the next level.

This was clear from Finance Minister Heng Swee Keat's Budget speech on March 24, in which he announced that the broad-based Productivity and Innovation Credit scheme, aimed at encouraging companies to take that first step, will end soon.

In its place is the Industry Transformation Programme, which targets nothing less than a futuristic renewal of Singapore's industry - robotics, cutting-edge automation, closer collaborations among companies and between the private and public sectors, not to mention pervasive innovation across companies big and small.

The message was reiterated in Mr Heng's speech on Wednesday rounding up the three-day Budget debate, in which he made plain that the Government would not be bailing out "zombie" businesses and that it would offer targeted help only to viable operations.

Companies that have already made good use of the support measures that the Government has rolled out over the years are in good stead to tap the latest Budget initiatives to weather the downturn and position themselves for further growth when the upturn comes.

But for companies that have spent the past five years waiting for more bailouts and relief measures, this is the strongest signal yet that they had better buckle down and upgrade - or face annihilation.

A version of this article appeared in the print edition of The Straits Times on April 08, 2016, with the headline 'Businesses must take next step'. Print Edition | Subscribe