DPM Tharman Shanmugaratnam at the ASME 30th Anniversary Celebration Dinner

Mr Kurt Wee, President of the Association of Small and Medium Enterprises (ASME)
Past presidents of ASME
Distinguished guests
Ladies and gentlemen

It is my pleasure to join everyone here today.  My congratulations to the Association of SMEs (ASME) on your 30th Anniversary.

I would first like to congratulate ASME, and thank its past and present leadership, for your contributions to Singapore’s SME sector over the past three decades. ASME has been a strong voice for our SMEs, and one of the Government’s active dialogue partners. The Committee on the Future Economy (CFE), for example, has benefited greatly from your valuable insights, and I know ASME President Mr Kurt Wee has been an active participant on the committee.

Tackling the economic headwinds

The challenging business environment is probably at the top of the minds of many of our businesses today.  The challenges that Singapore faces reflects structural as well as cyclical factors.

1. Structurally, Singapore is now growing more slowly, as our labour force is growing at a more gradual pace compared to even a few years ago, and certainly much more slowly than a decade ago. Our normal growth is now 2 to 3 per cent, even with good economic conditions in the rest of the world.
2. But we are currently growing below our new normal. The reasons for this are cyclical. Global and regional trade is weak, and investment demand in the leading economies remains very sluggish. In some areas, such as the commodity and oil-related sectors, the down-cycle may be persist for some time.
3. That’s why growth this year has slowed, likely to be 1.0 to 1.5 per cent. While growth is expected to pick up next year with some modest improvement in the global growth outlook, it is unlikely to be sharply higher.

The Government has introduced some measures to help the business sector in this year’s Budget, and we continue to monitor the situation carefully. Financing, in particular, has been one of the key challenges faced by SMEs, which is understandable in a slower and more uncertain environment.

Hence in Budget 2016, we launched the SME Working Capital Loan (WCL) to help local enterprises access up to $300,000 in unsecured working capital financing. There has been a strong take-up for the WCL, and over $500 million in loans have already been made to over 3000 SMEs under the scheme.

Some sectors have been hit harder than others. This morning, the Government announced the enhancement of IE Singapore’s Internationalisation Finance Scheme (IFS) and the re-introduction[1] of SPRING’s Bridging Loan (BL) for companies in the Marine and Offshore Engineering (M&OE) industry[2]. The industry is going through a deep and long downturn. It will have to restructure, and there will be inevitable downsizing. But this additional government support is aimed at helping the many viable companies in the M&OE industry with core capabilities that should be preserved for the long term. 

Upgrading capabilities for future growth

Our most important priority is to help firms, especially our SMEs, to restructure and upgrade capabilities so we emerge stronger when the demand cycle turns.

Our whole approach has to be aimed at deepening the skills of our workforce, including managerial skills, and to grow through business innovation and internationalisation. Deep skills, innovation and internationalisation are the keys to our future growth, whichever the sector our companies are in.

We have enhanced our range of Government assistance schemes to help our businesses build up these capabilities. 

• SkillsFuture, SPRING’s Automation Support Package (ASP) and Capability Development Grants (CDG) are major ways, and already being well used.
• SMEs can also approach any of the 8 Centres of Innovation (COIs) currently housed within our polytechnics and A*STAR research institutes, to get technology consultancy and training, and even to use their laboratories.
• Those who want to take a bigger step forward and build up internal R&D capabilities can tap on A*STAR and SPRING’s GET-Up Programme, which sends into the SMEs, on secondment,  senior research scientists and engineers (RSEs) from our universities, research institutes and polytechnics.
• And SMEs that wish to internationalise can tap on the Market Readiness Assistance (MRA) grant and Global Company Partnership (GCP) programmes from IE Singapore. 

I am heartened to note that many more SMEs are coming on board and taking advantage of these schemes.  Since the start of the year, over 23,000 grants have been awarded to support businesses who are investing in innovation, productivity or greater overseas market access.

1. This includes over 16,000 projects through SPRING’s Capability Development Grant (CDG) and Innovation & Capability Voucher (ICV), and over 7,000 projects through IE Singapore’s Global Company Partnership (GCP) and Market Readiness Assistance (MRA).
2. More than half of these grants went to SMEs.
3. But many more firms should take advantage of these schemes. We aim to scale this up, and support 200,000 more projects over the course of the next 5 years.

ASME’s continuing contribution

The Government’s strong partnerships with ASME and our other industry partners have helped us reach out to the SME sector extensively.

The SME Centre network, which ASME has been actively involved in, has been an effective channel for SMEs that require face-to-face assistance on Government schemes, such as from SPRING, IE, IMDA and IRAS. Collectively, our 12 SME Centres have engaged 63,000 SMEs to date.

ASME has actively encouraged SMEs to upgrade, raise productivity and seek out new opportunities.

1. Programmes such as the Singapore Prestige Brand Award (SPBA) which ASME co-organises with Lianhe Zaobao, are an example.
2. To help SMEs better attract and recruit local talent from Institutions of Higher Learning, ASME has also worked with SPRING on the SME Talent Programme (STP), reaching out to more than 7,500 students and 1,000 SMEs since 2013. To date, 640 students have been matched with 110 SMEs through internships, study sponsorships or fresh hires.
3. I look forward to seeing ASME and the business community build upon these efforts, especially to enable our SMEs take full advantage of the digitalised economy.
4. Working together, we can help many more of our SMEs transform themselves and become a vibrant part of the future Singapore economy.

Conclusion

So as we celebrate the 30th Anniversary of ASME, I look forward to hearing more about the success stories of our many SMEs, as we work together towards a brighter future for Singapore.

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