Small and medium businesses (SMEs) made up 70 per cent of the employed workforce in 2020. They makeup 99 per cent of enterprises in the country and bring a healthy 43 per cent of the total nominal value-added of S$428 billion (US$322 billion).
Even with their significant contributions to the country’s economy – Singaporean SMEs have faced an unprecedented challenge as the COVID-19 pandemic lockdown measures continue to affect life as they know.
Sales revenue dips, fast-changing customer trends, negative repercussions on cash flow and supply chain problems are just some of the shockwaves SMEs have had to face down to keep their business afloat.
And as Singapore undergoes yet another heightened alert in the middle of 2021, those with plans of market expansion, goals for the fiscal year or other expectations are forced to turn their attention once again to business survival.
A hesitant approach to innovation
Businesses have been forced to consider business continuity above all else – which has postponed or even halted entirely the pursuit for innovation in their SME.
Survey shows that small businesses continue to lag behind when it comes to digital transformations. A study of 782 Singaporean small businesses found that commonly attributed reasons to this delay remain to be:
- High costs. SMEs hold on to the belief that digitalisation will be more expensive than they can handle.
- Fear of cybersecurity issues. Without solid implementation, lack of knowledge and unavailable manpower – SMEs fear that their infrastructure will be vulnerable to malicious parties.
- Lack of necessary digital skills amongst employees. Intent to digitalise might be there, but some SMEs worry about what this means for their employees who lack the knowledge to implement modern technology in their day to day operations.
Be that as it may, automation and innovation are what differentiates a struggling business from one that adapts and thrives in an uncertain landscape.
Cloud technology, versatile e-commerce stores, omnichannel sales and marketing strategies, digitalised supply chains and other forms of modern technologies are not just an option for SMEs anymore – they’re necessary.
Journey towards digital adoption
Adopting innovative technology doesn’t immediately equal expensive budget plans or pricey implementation fees.
SaaS systems for instance, once a luxury only to be used by massive multinational corporations – are made readily available to any SME for affordable monthly subscriptions.
And for that fee each month, SMEs can monitor and improve their finances, digital marketing activities, payroll, and other processes with data-backed insights.
Such fast-paced digital adoption has cultivated a workforce that is more digitally savvy, or at least ones with the ability to lean into new skills quickly and efficiently. This is why, now more than ever, SMEs should rethink their perception of the digital shift.
Instead of going in blind or rushing towards digitalisation for the sake of business survival – approach this with strategy.
Do management and your workforce have a positive attitude towards digital adoption? If not, how can company culture be revisited to ensure that your workforce is passionate about replacing traditional systems with modern ones?
Understand what changes you want to be reflected with new technology before using any system. Will this avenue bring you more sales in the long run? Will it increase customer satisfaction? Does this new technology have the power to streamline your supply chain?
How will implementing new technology impact business as you know it? Is there a need to hire talent to see this through?
These are the key elements and questions to consider when scaling a small business in Singapore with the help of automation and innovation.
An upper hand with flexibility
Smaller workforces that can be found in SMEs are agile, quicker on their feet to evolve than multinational companies who must completely transition from legacy systems.
Quickly implementing such systems will allow SMEs to get competitive in the ways that matter now.
Another advantage that Singaporean SMEs specifically have is strong support from the government to affordably implement digital strategies.
Such initiatives include claimable bonuses, tax relief, wage subsidies and other measures meant to help small businesses ride out the wave of COVID-19 and the consecutive Circuit Breaker.
Those that might be relevant to your own small businesses are the Digital Resilience Bonus (DRB) for Food Service & Retail businesses that have been impacted by physical distancing and lockdown measures as well as the Start Digital programme for any SME looking for an affordable way to migrate their operations online.
Singapore has made these bonuses and programmes available to businesses below a pre-requisite employee workforce size.
All of these are meant to increase the competitiveness of Singaporean SMEs in the global market – as they make data-empowered decisions for their businesses.
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