Singapore SMEs to create 15,000 new jobs by 2015

But despite this government-supported growth SMEs still face short-term hardships, says trade minister Teo Ser Luck.

The Singapore government handed out $98 million last year on upgrade projects for small and medium-sized enterprises (SMEs), and these will create a torrent of new jobs, yet the current business environment poses many pitfalls for failure.

"When fully implemented within the next three years, these projects would create more than 15,000 new jobs and generate an additional value-added of $4.4 billion for the economy. This expansion would contribute to sustaining economic growth in Singapore over the longer term," said Teo Ser Luck.

"Both SMEs and SMPs (small and medium-sized practices) face business challenges. Resource constraints, talent attraction, productivity and rising business costs are some of the key common issues that have always plagued small business set-ups. Beyond these challenges, SMPs also have to constantly develop their capabilities and technical expertise to meet clients’ rising expectations and keep abreast with the latest knowledge and trends in the accountancy profession," he said.

"As we move forward amidst the backdrop of a more subdued economic outlook, global economic conditions are still expected to be uncertain and volatile. For example, global demand and trade are expected to deteriorate, and credit market conditions may tighten if the economic situation worsens. Singapore, as an international hub with a small and open economy, will certainly face challenges arising from these global development," he added.

"To continue to do well in such conditions, SMEs and SMPs have to continually enhance their internal organisational capabilities and develop a competitive workforce. They need to have the relevant resources, knowledge and mindsets to be able to quickly identify and tap on business opportunities as well as lucrative markets," he said.

"To do this, firms should engage in strategic planning to help identify the right opportunities. This would require the management to be familiar and up-to-date with the local and overseas business landscape. Companies should also invest in developing technological capabilities and know-how in order to streamline processes and reduce costs. Hiring the 'right' person for the job and developing such talent within the firm is also a critical success factor to grow the business. Finally, firms should also continually seek to improve their productivity – this would help them overcome constraints especially on the manpower front," he added.

"It is important that the needs of small enterprises and the challenges they face do not slip between the cracks. They make up a large part of our economy. Today, 99% of enterprises in Singapore are SMEs, employing 70% of the workforce and contributing up to 60% of the national gross domestic product or GDP. Without doubt, SMEs play a key role in our economy by keeping our business market vibrant and continuing to contribute to the job market," he said further.