SINGAPORE - "Lower for longer" is becoming the reality of Singapore economy, and companies here must look overseas to grow amid the headwinds.
Minister for Trade and Industry Lim Hng Kiang made this comment on Thursday (June 23) when speaking at the inaugural Internationalisation Forum, organised by Human Capital Singapore.
Companies must brace for a long period of low economic growth and low commodity prices, he said.
"To achieve sustained growth, companies need to venture into new and diverse markets, expand their international footprint and gain economies of scale," Mr Lim said.
The government provides a suite of support measures on this front, such as IE Singapore's Market Readiness Assistance scheme, but collaboration with trade associations and chambers is also important especially for small and medium enterprises (SMEs).
These smaller firms, which often lack resources, can form consortiums and create scale to make going overseas easier, he added.
The forum had an attendance of around 400 business leaders and government officials, including about 50 from Chongqing.
Three Memorandums of Understanding were signed during the forum to establish bilateral business partnerships.
China is one of the top three destinations for overseas expansion, speakers at the forum noted. CapitaLand chief executive Lim Ming Yan said the country's urbanisation will remain a key driver for the developer there.
But Southeast Asian markets, particularly Malaysia and Indonesia, remain the most popular choices for SMEs due to familiarity, Singapore Business Federation chief executive Ho Meng Kit said, adding that Myanmar and Cambodia are also attracting increasing business interest.
There are however risks to internationalisation, and SMEs often cite the difficulty of navigating an unfamiliar business and bureaucratic environment as the top challenge, Mr Ho said.
Banyan Tree chairman Ho Kwon Ping suggested that SMEs can "piggyback" on larger Singapore corporates to go overseas.
This is something CapitaLand is actively doing, Mr Lim told The Straits Times, citing the firm's efforts to bring local retailers to CapitaLand overseas malls as an example.