Small and Medium Enterprises Seek Stronger Coordination Amid Economic Pressures
The latest survey by the Singapore Chinese Chamber of Commerce & Industry (SCCCI) highlights rising concerns over business costs and calls for better government coordination to support companies, especially SMEs.
The survey, which gathered insights from over 1,000 businesses, reveals that increasing costs are the primary concern, particularly among small and medium enterprises (SMEs) that make up 91% of respondents. Other significant worries include finding suitable manpower and inflationary pressures.
Despite these challenges, businesses remain optimistic about their recovery from the pandemic. Approximately 37.7% expect higher revenues in 2022, while 36.4% predict their revenue will remain stable. This is a positive shift from 2021 when almost half of the businesses projected a decline.
Manpower issues remain critical, with 57% of businesses maintaining their workforce and 26% looking to increase headcount, mainly by 25%. Rising manpower costs and the difficulty in hiring skilled local and foreign workers are major obstacles. To address these, 53.9% of companies are focusing on automation, digitalisation, and transformation to reduce manpower dependency.
The costs of doing business are expected to increase, with 74.9% of companies predicting a rise, and a significant number expecting an increase of up to 25%. Despite these financial pressures, 71.6% of respondents anticipate profits in 2022, with half of those expecting higher profits than in 2021.
Digitalisation continues to be a key focus, with companies citing improved operational efficiency and higher productivity as the top benefits. However, challenges such as the costs involved and the lack of internal expertise hinder broader digital adoption. Most businesses still rely minimally on online revenue streams, with only 10% or less of their income generated online.
Additionally, a lack of skilled employees for reskilling and training is another obstacle for businesses, as is the high cost of complying with regulatory requirements. In terms of expansion, two-thirds of companies plan to venture into international markets, with Malaysia, Vietnam, Indonesia, and China being the top choices.
Government support remains crucial for many businesses, with 67.5% of respondents applying for grants, primarily those aimed at facilitating digitalisation. Companies have called for more coordinated government actions and initiatives to help SMEs participate in cross-sector opportunities.
Sustainability is also a growing focus, with 70.8% of businesses recognising its importance. However, high implementation costs and limited resources remain significant barriers.
In light of these findings, SCCCI has made several recommendations, including a more balanced approach to local and foreign manpower, enhanced government support for digitalisation, and faster-paced sustainability efforts for SMEs.
SCCCI President Kho Choon Keng emphasised the need for continued proactive government support, urging authorities to anticipate future challenges and enhance funding to help businesses thrive in the competitive global market.
