IT IS not all doom and gloom for the small and medium enterprises (SMEs) in Singapore as they are positioned to make the leap into the next phase of growth, even as global economic conditions are uncertain, a panel discussion said.
The key to staying ahead of competition from the region, as the emerging countries narrow the gap in productivity and efficiency levels, is to build new capabilities and leverage technology, three speakers noted.
Jimmy Koh, head of economic-treasury research at United Overseas Bank (UOB) pointed out that business owners have to ask themselves what their industries will look like in the next five to 10 years.
"In every business, the margin is declining, your volume is going to grow lesser but your costs keep rising, so how do we continue to remain viable in that environment? That is the question we all have to ask," he told close to 300 participants at the SME Outlook 2016 session.
The transition to the next phase of growth will be driven by talent so it is vital to strengthen the senior and middle management team, said David Toh, partner, entrepreneurial and private clients, at PwC Singapore.
A common feedback from SMEs is the difficulty in recruiting "the best and the brightest" as they face competition from bigger firms, he said.
But the slowdown in economy spells opportunity for SMEs to keep a lookout for such people in the market, said Mr Toh, who added that partnerships with accelerators are beneficial to businesses.
This is because the accelerators would provide mentorship, connect firms to areas they want to grow into, as well as help consolidate some of the common back-end cost functions, thereby managing costs.
During the hour-long panel discussion, chief executive of the Singapore Business Federation, Ho Meng Kit, urged the government to review and streamline some of the schemes available to support SMEs.
He made the point in response to a question that there are too many existing government schemes which could confuse SME owners.
Mr Ho welcomed the fact that the government is being proactive in helping SMEs but noted that the conversation within the business community should focus on the ethos of lifelong learning and skills mastery.
"It should be about your growth opportunities, your business, your competitors and these are more important than just the schemes."
Slowing growth in China is also on the minds of the business community and as this happens, the impact will be felt globally, said Mr Koh, who added that he thinks there will not be a massive depreciation in renminbi.
"Whether we are going to see a devaluation in renminbi depends on whether we are going to see significant US dollar strength globally. And based on the assumption of a gradual US Federal Reserve interest rate hike, we think that a significant renminbi devaluation is unlikely."
The forum held last Friday was organised by The SME Magazine in collaboration with UOB and hosted by Fullerton Hotel.
This article was first published on November 30, 2015.
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