Singapore Budget 2017 — SMEs Go Digital Programme (GDP)
A prospect client was asking about this yesterday, hope to share here on the SME GDP…
Among the many new initiatives of the Singapore Budget 2017 include the SMEs Go Digital Programme, aimed at helping local enterprises acquire digital capabilities, a S$600 million fund to give firms a leg-up in expanding overseas & programmes for Singaporeans to gain deeper skills.
Previous approaches such as the Productivity and Innovation Credit (PIC) scheme were fine in theory but in practice, they were difficult to do because of vague terms and tough operating environment.
Some of the firms were confused about what was subsidised or not, & it came at a time when many businesses were fighting fire.
When their minds are somewhere else, it could be difficult to ask them to focus on productivity.
As such, many are not surprised by the absence of the PIC scheme in this Budget, which is due to expire in the 2018 Year of Assessment.
The new measures such as the SMEs Go Digital Programme, could be “more successful” in bringing the SMEs onto the path of transformation.
Singapore’s Info-communications Media Development Authority (IMDA) will work with SPRING Singapore & other sector agencies on the Small Medium Enterprises (SMEs) Go Digital programme to help companies build digital capabilities.
Companies can also get help in person at SME Centres, & a new SME Technology Hub to be set up by IMDA.
Singapore is maturing as an economy & competing on the quality of ideas & ability to create value.
The ability to use digital technology and embrace innovation will help businesses stay competitive and grow.
This will start with sectors where technology can significantly improve productivity, including retail, food services, wholesale trade, logistics, cleaning and security.
3-Pointer Quick Elaborations of the new SME’s GDP initiative :
1. Plans to strengthen capabilities in data and cybersecurity
With increased digitalisation, data will become an important asset for firms, and strong cybersecurity is needed for our networks to function smoothly.
More than S$80 million will be made available for these programmes.
2. Industrial Transformation Maps (ITMs) to deepen partnerships and spur innovation
The ITMs help us to identify key enablers, which involve different stakeholders, to transform sectors.
Forward-looking regulations are required to enable government agencies to balance managing risks and creating space to test innovations.
Eg, there was a review of the regulatory framework governing venture capital (VC) firms by Monetary Authority of Singapore earlier in February 2017. This gives [the VC firms] greater flexibility, making Singapore more conducive to VC investment.
3. Helping businesses to scale up globally
To further support the growth of local businesses, the Singapore government will continue to develop a smart financing ecosystem.
The government will commit up to S$600 million in government capital for a new International Partnership Fund.
The fund will co-invest with Singapore-based firms to help them scale-up and internationalise.
By catalysing private finance and sharing risks with financial institutions, this will help local companies to better tap into the growing market for infrastructure development in emerging economies, particularly in Asia.
a. The SME Working Capital Loan will be continued for another two years.
Under the programme, the government co-shares 50% of default risk for loans of up to $300,000 per SME.
The Tech Access Initiative for small companies that would like to do prototyping is also introduced.
A*STAR will provide access and training to use its advanced machine tools for prototyping and testing. This will be available from available from September 2017.
The Wage Credit Scheme will also continue to help firms cope with rising wages. Over $600 million will be paid to businesses this March. Approximately 70% of this amount will be paid to SMEs.
Some general market Comments :
1. The Go Digital Programme for SMEs is a further step in the right direction as it focuses on embracing digital rather than acquiring technology.
2. As we live in an increasingly globalised world, the creative employment of technology is necessary for Singapore to retain its competitiveness as a cutting-edge economy.
Hope this little sharing helps.
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