SINGAPORE Despite the government's extensive efforts to nudge firms to venture abroad, a survey has found that only a quarter of small and medium enterprises (SMEs) which operate only in Singapore want to spread their wings overseas.
The main concerns cited by the firms were insufficient financing and lack of familiarity with other markets. Other worries include the level of competition, regulatory and legal compliance, as well as political instability in overseas markets.
The study by insurance firm QBE involved 402 SMEs here. Among the 238 companies which do not have any overseas presence, 58 said they intend to change that. The findings of the survey � which was conducted in September last year � were published on Monday (Jan 29).
The study noted that improved economic sentiments in Singapore � giving firms the confidence that sufficient growth can be attained domestically � is a possible reason for firms' lack of appetite for international expansion.
Half of the respondents feel that the economy will improve in the next 12 months, as compared to a quarter (24 per cent) which feel it will worsen.
Speaking to TODAY, Kurt Wee, president of the Association of Small & Medium Enterprises (ASME), felt that there needs to be a larger push towards international expansion by both public and private players. The ASME, for instance, hopes to group SMEs here into various overseas nodes, where each node can tap on shared facilities and services, so as to lower the firms' costs and risks.
It also hopes to provide a framework to guide SMEs in charting a roadmap for themselves in venturing overseas, and offer advice on which market may be most appropriate for different businesses.
Still, firms must take the first step, Wee stressed. This has to come from the SMEs themselves They must knuckle down and start embarking on foreign markets. SMEs must recognise the need to grow and take advantage of international opportunities, he said.
In September last year, the Ministry of Trade and Industry announced that International Enterprise (IE) Singapore and Spring Singapore will be combined into a single government agency to help local firms grow their businesses and expand overseas. The new agency, called Enterprise Singapore, will be formed by the middle of this year.
The Committee on the Future Economy (CFE) report � which was released in February last year � stressed the need for Singapore to deepen and diversify its international connections, in order to position itself for the coming decades.
The Government's push for Singapore companies to break into overseas markets can be traced back to 1993, when a new direction was set for Singapore economy to develop a second wing?.
More recent measures included S$240 million worth of steps announced in Budget 2015 to encourage local firms to spread their wings overseas. The initiatives then included raising the support level for SMEs under IE Singapore's grant schemes, and introducing a new tax incentive to meet the needs of larger Singapore firms in their internationalisation efforts.
Apart from overseas expansion, the QBE study also polled SMEs on their attitudes toward digitalisation and cybersecurity, among other things.
The study found that while about 95 per cent of the respondents currently use or plan to invest in digital technologies, almost half (48 per cent) said they are still concerned by the perceived high cost of investment.
About four in 10 feel their staff lack the necessary skills to fully leverage new technologies to their benefit.
On cybersecurity, about a quarter indicated that they have concerns over the security of sensitive data, while more than a third admitted to having no cyber protection at all.
The study also showed that SMEs were relaxed about workplace health and safety, with 59 per cent saying they are aware of all the requirements in this area. -- NNN-TODAY
Source: NAM News Network