In the wake of the contracting economic climate and global uncertainties, local firms are creaking under the pressure. The newest annual National Business Survey by the Singapore Business Federation (SBF) highlighted that 44 per cent of the firms expect no changes to the current climate whereas 49 per cent expect the business climate to become more challenging in the coming months.
Based on the SBF survey carried out between August and October last year, 51 per cent of the businesses perceived that Singapore business climate had deteriorated in the last year.
That as many as 1,018 firms perceived that business sentiments were weaker was not surprising given the prolonged US-China trade tensions, remarked the Ho Meng Kit, CEO of SBF. He also added that “Although the survey was done prior to talks of the Phase One trade agreement, the results are unlikely to vary that much now if the survey is conducted now.”
Other key concerns of firms such as China’s economic slowdown, increasing business costs and uncertainties caused by the US-China trade dispute were also given importance by the SBF.
Yet, Singapore firms are still expanding their footprints overseas in this midst of gloomy economy prospects. Overseas presence from last year increased from 75 per cent to 84 per cent. Small and medium enterprises have especially expanded globally from 68 per cent to 78 per cent from the previous year. SBF also highlights that Thailand, Malaysia and Indonesia, which are Southeast Asia countries continue to be the favourite places firms expand to.
“It is encouraging that our SMEs are extending their global footprints more aggressively despite the economic uncertainty that shrouded 2019…The growing e-commerce and digital economy provide our businesses with new opportunities as they can expand into new markets with little to no physical presence,” SBF remarked.
According to the survey also, 94 per cent of firms are aware of promoting “business transformation” as a means of maintaining competency and competitiveness. Technology has also been found to be instrumental to these transformations for 66 per cent of firms.
In addition to this, 69 per cent of firms also find that the main obstacle to the adoption of new technologies is the perceived cost. Mr Ho stated that “The shift in mindset is a big step in the right direction and we hope to see this increased awareness translate into actions. The perceived high cost of technology adoption is a common misconception…Companies can start small, such as setting up a website, or getting on social media.”
However, the adoption of the concept of business transformation has been slow among firms, with the trend beginning only ten years after the government started to exhort firms to innovate, Mr Ho further added.
For the upcoming Budget, firms have “returned to basics” in the kinds of provisions they want. For example, both large firms and SMEs are calling for tax rebates and reductions, incentives for industry-related training and corporate venturing and easier access to information and resources from government agencies have formed the key priorities for companies.
In the meantime, SBF is also set to release its own wishlist for the upcoming budget.