Redouble efforts to transform SMEs in Singapore, says Tharman

Efforts to transform small- and medium-sized enterprises (SMEs) in Singapore have to be redoubled in the next decade, said Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam in Parliament on Wednesday.

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File photo: Buildings in Singapore’s Central Business District (CBD).

SINGAPORE: Efforts to transform small- and medium-sized enterprises (SMEs) in Singapore have to be redoubled in the next decade, said Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam in Parliament on Wednesday.

Mr Tharman acknowledged that SMEs are challenged by rising business costs, which is why government assistance schemes are already skewed towards SMEs.

About 80 per cent of the S$7.3 billion transition support package will go to SMEs.

Mr Tharman said that the goal of a high productivity, high income society is unlikely to be achieved in a few years and could take a decade.

“We have to have a determined approach to the problems, put resources into it and make sure we move at a continuing clip,” said Mr Tharman.

“A decade from now, if we move at this clip, we’ll be in a different place where firms will be able to survive with good profit margins (and) workers will have higher incomes. And the reason why you can achieve both higher incomes (and) good profit margins is productivity would have been transformed.”

The productivity drive is made even more challenging because the government wants to raise productivity while maintaining a rising employment rate.

Mr Tharman said: “The easy way to raise productivity is go through some shock treatment, shed firms, shed jobs, but the ones who will suffer in our case are the lower-skilled and especially our older workers.

“But we’ve taken a more inclusive approach and we should retain this inclusive approach as we go forward, which makes it a special challenge.”

Mr Tharman added that for productivity initiatives to succeed, the government also needs the entrepreneurial energy and leadership of the business owners.

- CNA/ec

Redouble efforts to transform SMEs in Singapore, says Tharman