SINGAPORE (Jan 29): Small-medium enterprises (SMEs) in Singapore are more optimistic than ever about their businesses and overall economy coming into 2019, finds a recent study conducted by Australian insurance provider QBE Insurance.
According to the fourth edition of the annual survey of Singapore SMEs, 44% of respondents polled in Nov 2018 were expecting their businesses to pick up over the next 12 months with almost half (47%) saying they intended to internationalise.
39% were also of the opinion that Singapore’s economy will pick up over the same period.
Notably, this year’s survey finds that smaller-sized SMEs (five to 50 staff) who intend to internationalise, 40% of them are currently domestic-only and thus will be making their first ventures abroad.
In contrast, only 25% of medium-sized enterprises (51-200 staff with annual revenue of less than $1 million) who intend to internationalise will be doing so for the first time.
This figure drops even further to 18% for large SMEs with 200 staff or under, and whose revenue falls within the $25-100 million range.
According to QBE, the significantly higher proportion of small SMEs willing to venture overseas for the first time is indicative of a growing appetite among Singapore’s enterprises to conduct global business.
The insurance firm however highlights that Singapore’s SMEs still appear to be lagging in digital adoption, with most surveyed businesses being slow to take up cyber protection measures, digital payment offerings and government support for digitisalisation.
This comes as about 25% of overall SME respondents said they lack internal processes or policies to protect themselves from risks of security, fraud and cyber hacks – despite indicating concern over these issues. The figure rises to a third when looking only at smaller-sized SMEs.
40% of SMEs cited the high cost of investment as the main reason for not digitalising, or not making use of digital technologies and processes.
Other key reasons included lack of digital skills within their business, as well as a lack of financing and funds.
“SMEs form 99 per cent of Singapore’s businesses. It is important that they continue to align to the overall economic direction for Singapore set by the government,” says Karl Hamann, CEO of QBE Insurance Singapore.
“While many are still showing hesitance towards digitisation, they should tap on resources available to help smoothen their transition to the digital economy,” he adds.