Budget 2016: Trade associations and chambers must step up to the plate

ONE of the novel and striking features of Budget 2016 was Finance Minister Heng Swee Keat's commitment to set aside S$30 million over the next five years to support trade associations and chambers (TACs) develop their capabilities. There will also be additional funding for industry-wide transformation projects under Spring's Collaborative Industry Projects Programme.

Given the budget's focus on targeted support for various industries under the proposed Industry Transformation Programme (ITP), additional support for TACs (of which there are about 350, many of them industry-specific) is appropriate.

It is also clear that many TACs need help. Judging from industry feedback, many smaller TACs fall short of their members' expectations. Some are beset with problems relating to not only capacity and capability, but also leadership, succession planning and internal politics.

It is not clear that funding alone is the best answer to these problems - although it is true that some TACs are constrained by the fact that sometimes, too much of their management time is spent on fund-raising events and too little on programmes to help their member companies.

Funding aside, in order to be more effective, some TACs may also need organisational changes, better systems and processes and closer rapport with their members. While they will need some funding to attract better talent and perhaps equipment, most of the proposed funding - apart from being targeted at TACs with proven effectiveness - should ideally be project-specific, as indeed it has been so far under the Local Enterprise and Association Development (Lead) programme. Since the Lead programme was started in 2005, it has supported more than 30 TACs with over S$100 million in funding for various projects designed to improve productivity and foster innovation.

In the context of the proposed ITP, there is a lot more that TACs could do.

They can help members access government support schemes - of which there will be many more of a bespoke nature and which TACs, with their specialised skill sets can work with. Members of TACs should not need to hire consultants to navigate and apply for government assistance schemes; TACs should be able to provide this service, even if it is through keeping consultants on retainerships, to support members.

Going forward, partnerships will also be critical for innovation, knowledge sharing and resource pooling. TACs are well placed to help forge partnerships among their members, and to build consortia to bid for contracts - as is common in, for example, Japan and South Korea. TACs can also partner other TACs (including overseas) for cross-industry ventures.

Of special importance is collaboration between larger and smaller companies in an industry. Some TACs already encourage this. For instance, the Singapore International Chamber of Commerce recently launched awards to showcase collaborations where large companies help Singapore SMEs innovate and boost growth and productivity. Increasingly, success in the future will involve - indeed, require - such intra-industry partnerships.

With increased government assistance and greater scope for TACs, it is up to these organisations to step up to the plate and be the greater force that they can be.

This article was first published on April 8, 2016.
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