SINGAPORE - Only 14 per cent of small and medium-sized enterprises here intend to expand ovearseas while almost half had no interest in taking their business beyond Singapore in the near future, a survey found.
In the poll by QBE Insurance of more than 400 firms, 45 per cent said that they will not explore expansion across borders - a figure which rises to 56 per cent for smaller SMEs.
Of SMEs currently operating only in Singapore with no intention to venture overseas, the top barrier cited by 42 per cent of them was insufficient funds to expand overseas, while 38 per cent cited unfamiliarity with the standards and processes of foreign markets.
Other prominent concerns include the level of competition in other markets, regulatory and legal compliance and political instability.
The QBE Insurance survey report suggested that another possible factor behind the lack of appetite for venturing abroad could be the improving perception of the economy in Singapore, driving belief that sufficient growth can be attained locally. Half of respondents feel the economy will improve in the next 12 months, while just 24 per cent feel it will become worse.
Local SMEs may not yet feel ready to capitalise on growth prospects in new markets, but 44 per cent are expecting an increase in sales in the next 12 months, up from 40 per cent in the previous year, the survey found.
It also found that digitalisation appears to be a key focus of local SMEs. Some 95 per cent of firms surveyed this year currently use, or intend to invest in, digital technologies.
But barriers to digitalisation remain. Among SMEs who already incorporate online business processes, 48 per cent noted the perceived high cost of investment as a problem while 39 per cent admit their staff lack the necessary skills to fully leverage new technologies to their benefit.
Fewer yet view cybersecurity as an issue, with only 23 per cent of all SMEs surveyed see security of sensitive data as a concern, while 35 per cent of smaller SMEs admitted to having no cyber protection at all.