Speech by MOS Teo Ser Luck at the Inaugural SME Capabilities Forum at Leo Room, Resorts World Convention Centre

Distinguished Guests,

Ladies and Gentlemen,

Good Morning.

Introduction

It is a pleasure to join all of you today at the inaugural SME Capabilities Forum. The forum brings together Small and Medium-sized Enterprises (SMEs) from various industries to exchange ideas on how they can innovate, collaborate and grow. I understand that there are SMEs from 20 different industries in the audience today. This offers an excellent opportunity for our guests to network, share information and learn from one another.

Importance of innovation in helping SMEs grow and improve competitiveness

Our SMEs have recognised the importance of productivity and innovation to their competitiveness. The 2014 SME Development Survey conducted by DP Information Group found that 87% of SMEs were looking to improve productivity in 2014, compared to 58% in the previous year. 75% of SMEs were also looking to implement innovation in areas such as process, product or service improvement.  What is even more encouraging is that smaller SMEs are starting to upgrade and transform themselves. In 2014, close to 90 per cent of the SMEs that benefited from SPRING’s support had annual revenues of less than $10 million. By applying technology, and thinking creatively about their business models, our SMEs can grow their top line, manage costs better, and become more competitive.

Firstly, by applying technology to automate operations, SMEs can save time on manual tasks and improve output. One good example is Ha Li Fa – the manufacturer of the BoBo brand of fishballs and fishcakes. Through SPRING’s support, Ha Li Fa automated its production line and implemented an integrated inventory tracking system. As a result, Ha Li Fa’s production output increased by more than 50 per cent while achieving 100 per cent order fulfillment rate. The streamlined processes also allowed staff to be redeployed to more meaningful roles, thereby resulting in increased labour productivity, higher employee morale and greater job satisfaction.

Technology has also opened up new avenues for SMEs to engage customers through digital marketing platforms. A 2014 study conducted by Google showed that most Singaporeans use the internet to help them make purchasing decisions. Book-binding company Grandluxe Pte Ltd is one SME that has leveraged on this trend to innovate and enhance its customer engagement strategy. With SPRING’s support, the company first conducted market research to understand customers’ needs and then developed a digital marketing plan to engage customers via online platforms. Through the company’s engagements with bloggers and by creating a strong social media presence on Facebook and Instagram, Grandluxe was able to make use of new media to promote its new Bynd Artisan retail concept, where Grandluxe creates personalized notebooks and stationery for customers on the spot.  Grandluxe has successfully raised brand awareness, and is seeing its social media presence increase rapidly.

Secondly, SMEs need to be innovative in their business models in order to adjust to changing market conditions. This is especially crucial for industries undergoing disruptive change. For instance, brick-and-mortar travel agencies are facing intensified competition in recent years from online travel agencies, and reduced demand for packaged tours.  To help such travel agencies, SPRING recently organised a customised Travel Innovation Programme for a group of six mid-sized travel agencies. These participating travel agencies learnt how to develop sustainable business models that leverage on the latest trends in the travel industry. I am happy to note that two of these travel agencies are currently in discussion with SPRING to embark on a full-fledged project to develop implementation strategies for their new business models.

Business model innovation is also important for companies seeking to seize new opportunities. Adonis International is one example of this. Known by many for its beauty and wellness products and treatments, the home-grown beauty brand is now diversifying into the hospitality industry with the launch of Adonis Hotel at Purvis Street last November, following a business innovation project supported by SPRING. This strategic move has enabled Adonis to potentially increase its top-line by extending its know-how in wellness and customer service into the related hospitality industry. At the same time, Adonis International is able to showcase its range of quality wellness products to international customers at various touch points in the hotel.

Government will continue to enhance assistance for SMEs

The Government will continue to listen closely to the needs and concerns of SMEs, and improve our assistance to address these needs. SMEs now have access to assistance provided by the 12 SME Centres, located at the Trade Associations and Chambers (TACs), as well as in the heartland Community Development Councils (CDCs). The business advisors at these SME Centres provide business diagnosis services and advise SMEs on how to tap on government assistance schemes. The SME Centres also hold regular workshops to help SMEs in areas where there are common capability gaps, such as in business management and financial knowledge. SPRING has also simplified the application process for smaller scale projects under the Capability Development Grant (CDG), which will make it easier for SMEs to tap on this programme for capability upgrading.

Mr Tan Kai Hoe, Chief Executive of SPRING, earlier shared that SPRING will be stepping up engagement efforts with industry partners to put together more Collaborative Industry Projects (CIP) that can benefit SMEs. Today, several such projects will be shared at the breakout sessions in the afternoon. SMEs which participate in these projects can be supported by SPRING for up to 70% of the qualifying adoption costs. I strongly urge our SMEs to consider taking advantage of the opportunities offered through these projects.

Conclusion

I hope today’s forum will enable you to make new contacts, and pick up new ideas and best practices which are relevant for your businesses.  I also urge you to take the opportunity to share your experiences with other SMEs, so that overall competitiveness can be enhanced through collaboration and win-win partnerships.

On this note, I wish everyone a fruitful day ahead.

Thank you.