Local firms focusing on growth after riding out pandemic: ESG

The economic recovery looks to be well entrenched, with new data showing that more firms are trying to reconfigure their business models for the post-pandemic world while fewer are seeking help to get by.

Enterprise Singapore (ESG) noted yesterday that the number of companies tapping government support for growth and transformation efforts rose 44 per cent to 22,100 last year. There was also a 40 per cent decline in the number of firms seeking public financing to 12,600 over 2020, reflecting a more robust economy.

The challenges of business continuity and cash flow also seem to have eased last year, with companies drawing loans of $8.6 billion, a 52 per cent drop from 2020.

Trade and Industry Minister Gan Kim Yong acknowledged some challenges at the agency's 2021-in-review briefing: "We are facing cost pressures from higher energy and commodity prices, as well as supply chain bottlenecks. Geopolitical tensions have caused major uncertainties and potentially, further technological bifurcation."

Omicron added another layer of uncertainty. But with Singapore's high vaccination rates, falling Covid-19-related deaths and signs of a global economic recovery, "we have reasons to be confident", Mr Gan added.

Instead of just riding out the pandemic last year, 1,600 local enterprises tapped ESG support in overseas markets, spurred both by new-found capabilities in digitalisation and the push to find new supply sources.

A Singapore Business Federation (SBF) survey in the second half of last year found that sentiment had improved, with the number of firms saying that they had been hurt by the pandemic falling from 63 per cent in 2020 to 34 per cent.

SBF chief executive Lam Yi Young said companies are also more confident about overseas expansion: "One in three businesses indicate that they are confident in pursuing overseas expansion in the next six to 12 months."

ESG chairman Peter Ong said he was "inspired" by the gumption shown by local firms: "Compared to 2020, ESG facilitated overseas projects for more enterprises in 2021. While this was still below the number of projects secured pre-Covid, it is still encouraging to see many pressing on."

China, Vietnam, Malaysia, the United States and Indonesia were top markets on local entrepreneurs' list. This year, said Mr Ong, ESG will step up its efforts to get more global pickings for local firms. He also noted that the agency would continue to groom promising local companies with global ambitions.

The priorities reflect a starkly different outlook from 2020, when the agency had to ramp up a contact centre overnight, field frantic queries from firms and help secure essential supply lines while the economy shrank 5 per cent that year.

With 7 per cent gross domestic product growth last year and 3 to 5 per cent projected this year, ESG will no longer focus on just helping businesses ease cash flow and stay afloat amid Covid-19 disruptions.

ESG chief executive Png Cheong Boon said the agency made the most impact when firms and trade associations came together to look at new innovations and markets.

The pandemic brought the Government and business community closer than ever before, said Mr Ang Yuit, vice-president for the Association of Small and Medium Enterprises. Without ESG, companies would still have digitalised, said Mr Ang, "but it would have been more uneven". "ESG created the effect of raising the water level for everybody, raising the tide."

The association hopes to see paperwork made easier for trade bodies to collaborate with ESG, as well as for small and medium-sized enterprises (SMEs) to apply for grants. It also hopes for a later-rather-than-sooner hike in the goods and services tax from 7 per cent to 9 per cent.

Touching on the agency's efforts last year, Mr Ang said: "Enterprise Singapore really busted itself to make things happen."

This helped Singapore SMEs move forward more than those of other countries, he said.

Mr Gan, whose ministry oversees the agency, said that ESG took on "many additional roles without hesitation" in the pandemic. "Your efforts to secure essential healthcare and industrial supplies have helped to keep our supermarket shelves well-stocked."