Why Singapore firms need to go global

lnternational expansion is leading to higher revenues and profits compared to staying domestic, Regus observes.

In a new global survey of over 12,000 companies, Regus saw that Singapore conglomerates with market presence abroad tend to perform better than those who simply focus on the local market.

"These findings indicate that foreign expansion is good for business and should be considered urgently by domestically-focused companies who do not want to be left behind in fiercely competitive markets," said Regus in a release.

"Evidence from the survey emphasizes the need for a shake-up in attitudes at domestically-focused firms. There is a divergence between the outlook of Singapore companies already operating internationally – where 87% intend to expand still further – and those solely operating in home markets – where only 77% intend to expand abroad over the next few years," it added.

Singapore firms reluctant to branch out into international markets do so because of two property and people concerns.

Regus found that 53% of firms say the biggest obstacle to overseas expansion are the challenges of setting up a physical presence in a foreign country. Meanwhile, 75% of companies also say that property commitments have to be very short term when setting up a foreign operation, as they do not know how quickly or slowly they will grow.

“This report provides hard evidence that in the current economic climate, Singapore firms that have diversified overseas are faring better than those who have stayed with their home markets. This applies to companies both large and small and should act as a wake-up call for those still solely focused on domestic markets to find effective and cost-efficient ways of moving cross-border in order to enhance their earnings and spread their risk," said William Willems, Regional Vice-President for Regus Australia, New Zealand and South-east Asia.

"In Singapore exports reportedly rose in November 2011 and with the proximity of rapidly developing markets, it is not exactly difficult for Singapore companies to open up cross-border markets!" he added.