Over S$80m set aside to help SMEs go digital

More than S$80 million will be spent on measures to help small and medium enterprises (SMEs) in Singapore to go digital and adapt to a world where tech is increasingly disrupting businesses, Finance Minister Heng Swee Keat said on Monday.

While observers applauded the measures, some said they thought the sum set aside was insufficient, and that success would boil down to resources and the SMEs' willingness to digitally transform their businesses.

For starters, the government will launch the SMEs Go Digital Programme to help these companies build digital capabilities.

The programme, to be led by public sector agencies such as Spring Singapore and the Info-communications Media Development Authority (IMDA), has three broad initiatives.

Budget 2017: Heng Swee Keat receives warm welcome back in Parliament

  • Finance Minister Heng Swee Keat delivered his second Budget speech on Feb 20, 2017.
  • Mr Heng's health took a hit in 2016 when he suffered a stroke in Parliament.
  • He returned to work in August, but has kept a low profile since, making his first public speech earlier this month at the release of the CFE's report, which he co-chaired.
  • His return to Parliament on Monday was greeted with support from fellow MPs, who thumped their seats as he began his Budget speech.
  • It was a shorter speech than the one he delivered last year, clocking in at about one-and-a-half hours - but still packed a substantial amount.
  • Budget 2017 addressed Singaporeans' immediate concerns while laying the groundwork for future growth.

First, sectoral Industry Digital Plans (IDPs) will be introduced to offer SMEs advice on the technologies they can leverage at each stage of their growth.

Work will begin with sectors where digital tech is said to be able to significantly improve productivity.

These include retail and cleaning.

Secondly, at SME Centres, SMEs will get in-person help from business advisers on off-the-shelf tech solutions pre-approved for funding support, or on access to ICT vendors and consultants.

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More digitally advanced SMEs will get advice from an SME Technology Hub to be set up by IMDA.

Finally, SMES that are ready to pilot emerging ICT solutions will receive advice and funding support.

Mr Heng said: "The government will work with consortiums of large and small firms to help them adopt impactful, inter-operable ICT solutions, to level up whole sectors."

Kurt Wee, president of the Association of Small & Medium Enterprises (ASME), told The Business Times that the digital proposals are in line with market needs; the new SME Technology Hub is particularly useful as local SMEs can receive help for their specific technological needs.

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He noted, however, that the S$80 million for the programme "may not be sufficient".

Lee Tiong Heng, tax partner at Deloitte Singapore, said that the success of the plans will depend on the amount of resources the relevant agencies can bring to the table.

He added that the plans nonetheless recognise that SMEs are at different stages of maturity in terms of adoption of digital technologies, and targeted support is thus welcome.

Leslie Loh, founder of Lithan, a training-services provider for SMEs and startups, praised the sectoral IDPs, citing that the appointed sectors have been affected by digital disruption and "suffering for some time now".

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He added that while the retail and wholesale sectors will be overhauled by e-commerce, the cleaning and security industries will undergo more incremental transformations.

Meanwhile, the government will boost capabilities in data and cybersecurity - both important assets for firms.

The Cyber Security Agency of Singapore will work with professional bodies to groom cybersecurity professionals.

A*Star, the agency that spearheads Singapore's R&D work, will expand its efforts over the next four years to support 400 companies in conducting operations and tech roadmapping.

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This will help SMEs identify how tech can help them to innovate and compete.

A*Star and the Intellectual Property Intermediary (IPI) will also boost SMEs' access to intellectual property (IP).

IPI will match companies with global IP that meets their needs, and A*Star will enhance the Headstart Programme so that SMEs, with which it co-develops IP, can enjoy royalty-free and exclusive licences for 36 months, up from the initial 18 months.

A new Tech Access Initiative will be rolled out in September, through which A*Star will provide SMEs with access to advanced machine tools for prototyping and testing; this comes on top of user training and advice.

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Erik Ingvoldstad, chief of digital transformation firm Acoustic Group, commended the Tech Access Initiative: "If these technologies get democratised and fully utilised by SMEs, I believe we can see a new boom in innovation, not just in terms of startup ideas, but for SMEs to stay competitive in a tougher marketplace."

But he pointed out that even with the capabilities and government efforts to encourage digital transformation, a willingness to change must come from the SMEs themselves.

"This is often a challenge, as SMEs are too busy running their businesses to focus on the future. However, if they don't make the changes now, they will be left behind by their competitors. I think this can be a game-changer though, if the SMEs see this as an opportunity to transform their businesses, and not just as a government handout."


  • More than S$80 million set aside to boost SMEs' digital capabilities
  • SMEs Go Digital Programme launched
  • A*Star to support over 400 SMEs in operations, tech roadmapping efforts
  • IPI and A*Star to boost SMEs' access to IP
  • Tech Access Initiative launched
  • For more Budget 2017 stories visit bt.sg/budget17

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Singapore to raise water price by 30% over two years
Big emitters face carbon tax from 2019


This article was first published on February 21, 2017.
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