SMEs have to put their own interests first

Tenders put up by our government agencies and stat boards attract numerous bidders fighting to keep their companies alive.
Tenders put up by our government agencies and stat boards attract numerous bidders fighting to keep their companies alive. PHOTO: ST FILE

It is ideal when small and medium-sized enterprises (SMEs) collaborate (Singapore wins when SMEs cooperate; Jan 4), but in practice this is hard to do in Singapore's competitive business environment.

Tenders put up by our government agencies and stat boards attract numerous bidders fighting to keep their companies alive. Given this cut-throat competition, how do we expect SMEs to share information when only the fittest survive?

Even when SMEs do make information available, they have to be careful as sharing too much can break competition law and run the risk of a fine, if the information can be used by competitors to fix prices.

We must acknowledge that like every other disruptive business process, collaboration comes with its share of caveats.

For a collaborative effort between companies to be successful, both parties need to have something to offer the other. Cultural differences may also cause a clash in business philosophies.

Trust remains a major concern as the parties involved must be willing to abide by the terms of engagement. Some companies have yet to even build levels of trust within their own organisations, let alone with competitors.

Until well-established protocols are put in place for collaboration, SMEs will likely remain sceptical as they act out of profit-driven self-interest.

Cheng Choon Fei

A version of this article appeared in the print edition of The Straits Times on January 10, 2019, with the headline 'SMEs have to put their own interests first'. Print Edition | Subscribe