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Singapore SMBs expect more growth in 2018

Singapore SMBs expect more growth in 2018

Middle-market enterprises in Singapore appear to be shrugging off geopolitical tensions and other risks.

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By Nigel Frith 26.07.2018

Middle-market enterprises in Singapore appear to be shrugging off geopolitical tensions and other risks. According to a new EY Growth Barometer report published by Ernst & Young on Wednesday, 90% expect to record growth in excess of the 6% average global rate for the year.

The annual study of more than 2,700 SMB executives in 21 countries found that Singapore will be among the global leaders in terms of growth expectations. Around two-fifths are confident that they will hit growth of more than 10% for 2018, which is considerably higher than the 25% average rate for respondents in all countries.

More than half are also aiming to record growth of between 6% and 10%. The figures suggest that Singapore companies are very optimistic about the next 12 months and go against the recent narrative that escalating trade tensions may crimp growth and rein in expectations for those in the Asia-Pacific.

“We are seeing a rare synchronization of growth across all major global economies that is boosting executive confidence, particularly led by the Asia-Pacific region,” EY Global Growth Markets Leader Annette Kimmitt said. “For the first time, middle-market company leaders are getting ahead of change and shaping their businesses through investment, expansion and prioritization to ride the wave of opportunity.”

While growth is on the agenda, risks still pose a challenge for Singapore enterprises, and the primary external threat noted by respondents is flat or slow global growth. In total, 40% of Singaporean executives said that this is a concern, which is higher than the 25% who said so globally.

Trade conflict has dominated headlines in recent weeks, but these worries may not actually be filtering through to middle-market businesses, as just 3% of respondents in Singapore said that geopolitical uncertainty is the most pressing concern for the next six months.

Companies in Singapore may be benefiting from successful digital transformation schemes, as they recorded the third-highest adoption rate of cutting-edge artificial intelligence (AI), behind only China and the Netherlands. Almost three-quarters are also planning to leverage AI during the next two years.

Singapore is eager to adopt more tech after Minister for Communications and Information S. Iswaran outlined a refreshed roadmap for technology that will guide research and development investments both in the medium and long term. The new plan centers around empowering ICM companies to use emerging digital technologies.

Iswaran said that the Research Innovation Enterprise (RIE) 2020 Plan will see SGD $360m pumped into the Services and Digital Economy domain. The investment will focus on initiatives such as AI Singapore and other innovative tech, including cybersecurity and machine-learning.

The minister said that the latest investment is just the start and that more needs done in the future. He added: “I fully intend to increase R&D spending on the Services and Digital Economy domain. We must be prepared to do more in R&D because digital technologies will only become more pervasive – and companies and countries around us are already investing heavily in this.”

The government launched a TechSkills Accelerator (TeSA) program back in 2016 that has helped train 39,000 employees at various companies. Iswaran said that the initiative has played a key role in ensuring that the local workforce has the right skills and is able to take part in the growing digital economy through niche and popular ICT roles.

The latest investment and initiatives all aim to help Singapore become more tech and IT-literate, ensure that it keeps pace with other countries and drive competitiveness in today’s digital business landscape.

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