SINGAPORE - Singapore will earmark $600 million in its Budget 2022 to help small and medium-sized enterprises (SMEs) boost their productivity by digitalising and automating their business processes.
The funding will be used to expand the range of solutions offered by the Productivity Solutions Grant (PSG) and encourage more SMEs to tap the scheme, said Finance Minister Lawrence Wong.
"For the broad base of SMEs, our priority is to raise their productivity," he said in his Budget speech on Friday (Feb 18).
"We estimate that this will support more than 100,000 productivity projects over the next four years. This is more than double the number of projects supported since the scheme began," he said.
The PSG was launched in April 2018 to support the adoption of IT solutions, equipment and consultancy services that improve productivity. The scope of the scheme was aligned with industry road maps such as the Industry Transformation Maps and Industry Digital Plans.
Maximum funding support under Enhanced PSG was raised from 70 per cent to 80 per cent in 2020. In the Budget 2021, the enhanced support level was extended to March 31this year.
The Government will also provide more support for local companies to undertake research and development (R&D) activities that form the basis of innovation.
Mr Wong said he would like to see more collaboration between local firms, especially SMEs, and the 80 centres of technology and innovation centres in polytechnics and the Institute of Technical Education.
"I will increase the capacity of the centres so they can provide research and innovation support to more SMEs," he said.
Over the next five years, these centres will be able to undertake close to 2,000 innovation projects across five pilot sectors: agri-tech, construction, food manufacturing, precision engineering and retail.
The Government will also set aside an additional $200 million over the next few years to enhance schemes that build digital capabilities of local businesses and workforce.
The schemes that will receive the enhanced funding are the Advanced Digital Solutions (ADS), the Grow Digital and the TechSkills Accelerator schemes.
Mr Wong, in his Budget speech, said that strengthening digital capabilities has long been a priority.
“Even before Covid-19, we had started to restructure our economy. Through the Industry Transformation Maps, we have made a good start in building capabilities we need for the future,” he said.
“But much more work lies ahead. We will therefore accelerate our investment in new capabilities to power our next stage of growth.”
Mr Wong said Singapore will also continue to invest in the upgrade of its technological infrastructure.
He said broadband access speed will be increased by around 10 times over the next few years and the Republic will also invest in future technologies such as 6G.
Ms Eileen Chua, managing director at SAP Singapore, said that as businesses regain the confidence to pivot from recovery to growth, greater support is needed to enhance their digitalisation efforts, particularly to build resilience, agility and innovation into the future.
“Government support and Budget policies geared towards capability building, digitalisation, workforce upskilling and experience management are crucial to enable businesses to build a competitive advantage and pursue sustainable long-term growth,” she said.