Spring effect helps SMEs add $8b to the economy

At a time when small firms are coping with labour shortages and rising competition, Spring Singapore has ridden to the rescue.

Its helping hand to Singapore companies last year will create an estimated $8 billion in value-add for the economy while adding 22,000 jobs when fully realised.

This is the highest value-add ever projected by Spring and beats the $6.16 billion value-add projected for 2013, the agency said yesterday.

The number of small and medium-sized enterprises (SMEs) tapping the agency's support grew from around 3,000 in 2013 to 9,000 last year.

With the economy restructuring, Spring has found different ways to help SMEs - from money to ideas to talent.

For those that want to become more productive, it has been offering $5,000 per voucher under its Innovation and Capability Voucher scheme.

Last year, about 9,700 vouchers were granted - up from 1,738 in 2013 - to around 7,000 SMEs, Spring chief executive Tan Kai Hoe said yesterday.

Nature Vegetarian Restaurant, for example, used the vouchers to introduce a wireless paging system that helps customers call staff.

"That helps us cut down our customers' waiting time and, in turn, improve our sales by 5 per cent," director Edmund Toh said.

Spring also helped tech start-up 1RWave develop tracking tags to monitor patient movements and matched the company with Tan Tock Seng Hospital for test-bedding.

Chief executive Kuan Yeh Cheang said: "There's a lot of help being dished out to SMEs like us. What we have is a luxury that many other countries don't."

And since small firms struggle to attract manpower, Spring has managed to match more than 600 applicants and interns with SME employers, Mr Tan added.

Meanwhile, Spring-funded Centres of Innovation have helped 360 SMEs develop technology solutions.

Mr Tan said that for each dollar it spends, Spring aims to create a value-add of $20. He later told The Straits Times that 90 per cent of the companies taking Spring's help to raise their game were small and micro outfits.

"However, these projects will take one to two years to be completed. Hence, it will take some time before the impact of these projects can be felt," he said.

Mr Kurt Wee, president of the Association of Small and Medium Enterprises (Asme), told The Straits Times: "I believe Spring as a lead SME agency has done a great job... Partly due to its help, SMEs have been able to survive the economic restructuring so far.

"Now our key concern is not asking for more government help - our main worry right now is the volatile economic environment."

CIMB economist Song Seng Wun noted: "Creating an $8 billion value-add to GDP is impressive. Having a government body dedicated to SMEs is important because SMEs are still the backbone of Singapore as they contribute more than half of economic output and offer over 70 per cent of employment.

"This is still the early stage of restructuring - much work remains to be done. And if restructuring is to succeed, we can't afford to lose a large chunk of our economy in the process, or not have a government body overseeing this part of the economy.

"But the Government can only help so much. The SMEs themselves must now up their ante."


This article was first published on Feb 7, 2015.
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