Budget 2017: S’pore gov’t introduces SME Go Digital programme
The Singapore government has demonstrated its commitment to supporting SMEs with the introduction of the SME Go Digital programme during the announcement of the Singapore Budget 2017. This is welcome news for SMEs, and provides a good start to their digitalisation journey.
In his speech, Minister for Finance Heng Swee Keat said that the Info-communications Media Development Authority (IMDA) will work with SPRING and other sector lead agencies in this effort.
The Minister says the SMEs Go Digital Programme will have three components:
a. First, SMEs will get step-by-step advice on the technologies to use at each stage of their growth through the sectoral Industry Digital Plans. The programme will start with sectors where digital technology can significantly improve productivity. These include Retail, Food Services, Wholesale Trade, Logistics, Cleaning and Security.
b. Second, SMEs will get in-person help at SME Centres and a new SME Technology Hub to be set up by IMDA. SMEs can approach business advisors at SME Centres for advice on off-the-shelf technology solutions that are pre-approved for funding support, or connect to Info-communications and Technology (ICT) vendors and consultants. The more digitally advanced firms can get specialist advice from the SME Technology Hub.
c. Third, SMEs that are ready to pilot emerging ICT solutions can receive advice and funding support. We will work with consortiums of large and small firms to help them adopt impactful, interoperable ICT solutions, to level up whole sectors.
To support the programme, the government will also strengthen its capabilities in data and cybersecurity. “With increased digitalisation, data will become an important asset for firms, and strong cybersecurity is needed for our networks to function smoothly. The Cyber Security Agency (CSA) of Singapore will work with professional bodies to train cybersecurity professionals,” said the Minister.
The Minister announced that more than S$80 million will be allocated for these programmes.
“The Go Digital Programme for SMEs is a further step in the right direction as it focuses on embracing digital rather than acquiring technology,” comments Lyon Poh, Head of Digital + Innovation at KPMG in Singapore.
“As we live in an increasingly globalised world, the creative employment of technology is necessary for Singapore to retain its competitiveness as a cutting-edge economy,” says Larry Sim, Tax Partner at KPMG in Singapore.
“The measures to strengthen SMEs capability to innovate is a good start and builds on the strength of our agencies. However this is only the beginning as many SMEs are only commencing their innovation journey,” adds Harvey Koenig, Tax Partner at KPMG in Singapore. “They will need even more help along the way to navigate issues such as working with innovation partners, protecting their intellectual property and commercialising their ideas. SMEs should look to schemes such as the Capability Development Grant and R&D tax incentives to fund their innovation projects.”
SME Working Capital Loan
Minister Heng also announced the continuation of the SME Working Capital Loan for another two years. Under the programme, the government co-shares 50% of default risk for loans of up to $300,000 per SME. “There has been good take-up for this scheme. Since its launch in June 2016, the scheme has catalysed more than $700 million of loans,” says the Minister.
The Finance Minister also introduced the Tech Access Initiative for small companies that would like to do prototyping. A*STAR will provide access and training to use its advanced machine tools for prototyping and testing. This will be available from available from September 2017.
Minister Heng also that the Wage Credit Scheme will continue to help firms cope with rising wages. “We expect to pay over $600 million to businesses this March. Roughly 70% of this amount will be [paid] to SMEs,” he said.
Supporting Innovation of SMEs
To support SMEs in their efforts to innovate, A*STAR will launch the Headstart programme. Under this programme, SMEs that enter into a Research Collaboration Agreement with A*STAR can enjoy royalty-free and exclusive IP licenses for 18 months in the first instance. With immediate effect, A*STAR will extend this to 36 months.