This article examines the impact of SMEs Go Digital grants (i.e., Productivity Solutions Grant (PSG) and Start Digital (SD)) on firm-level outcomes using annual firm-level data from 2017 to 2020.
Our findings show that SMEs Go Digital grants led to improvements in firms’ outcomes. In particular, the take-up of PSG and SD grants led to an increase in firms’ productivity of 3.0 per cent and 1.8 per cent respectively, as well as an increase in firms’ revenue of 2.2 per cent and 1.6 per cent respectively.
Further heterogeneity analyses highlight the following. First, smaller firms saw the largest improvement in outcomes from the take-up of PSG and SD grants. Second, tailored solutions resulted in better outcomes. Specifically, sector-specific PSG solutions were almost twice as effective in improving firms’ productivity and revenue as compared to generic PSG solutions. Among the SD solutions, digital transaction solutions led to the largest improvement in firms’ productivity. Third, both PSG and SD grants resulted in larger improvements in firms’ outcomes during the COVID-19 pandemic as compared to before the pandemic.
Amidst rapid technological advancements and constant changes in the business environment, the Government remains committed to curating relevant and effective digital solutions for firms, and supporting firms in their digitalisation journey.
The views expressed in this paper are solely those of the authors and do not necessarily reflect those of the Ministry of Trade and Industry or the Government of Singapore.
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25 MAY 2023