Only 14 per cent of small and medium-sized enterprises (SMEs) here intend to expand overseas while almost half have no interest in taking their business beyond Singapore soon, a survey found.

In the poll by QBE Insurance of more than 400 firms, 45 per cent said they will not explore expansion across borders - a figure that rises to 56 per cent for smaller SMEs.

Of SMEs operating only in Singapore with no intention to go overseas, the top barrier cited by 42 per cent of them was insufficient funds to expand abroad, while 38 per cent cited unfamiliarity with the standards and processes of foreign markets.

Other prominent concerns included 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 could be attained locally.

Half of respondents felt the economy would improve in the next 12 months, while just 24 per cent felt it would become worse.

While local SMEs may not yet feel ready to capitalise on growth prospects in new markets, 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 appeared to be a key focus of local SMEs. Some 95 per cent of firms surveyed this year use, or intend to invest in, digital technologies. But barriers to digitalisation remain.

Among SMEs that already incorporate online business processes, 48 per cent noted the perceived high cost of investment as a problem, while 39 per cent admitted their staff lacked the necessary skills to fully leverage new technologies to their benefit.

Fewer yet viewed cyber security as an issue, with only 23 per cent of all SMEs surveyed seeing security of sensitive data as a concern, while 35 per cent of smaller SMEs admitted to having no cyber protection at all.