Is Singapore losing cash as SMEs pivot abroad?
Overseas revenue growth is fast outpacing total revenue growth at 4.2% vs 1.3% in 2016.
When technology SME Eutech Cybernetic found it needed more room to grow outside of Singapore’s limited market, it turned to IE Singapore who proceeded to facilitate a partnership with industry giant Certis Group to offer their smart city solutions to a global audience.
Thanks to the connection, Eutech is now leveraging Certis’ vast network and global operations to offer Singapore’s first IoT Facilities Management (iFM) solution which can create digital replicas of smart buildings into the lucrative markets of Australia and Hong Kong.
Such is the usual growth trajectory for small businesses incubated in Singapore. Due to the inherently limited size of the market and slew of manpower problems plaguing the city-state, SMEs are choosing to set up shop and expand their operations to foreign markets. It comes as no surprise that the combined profits of top 1000 SMEs in the city state plunged by 17.1% to $2.9b in 2017, according to a survey from DP Information Group, as businesses are increasingly directing their energies towards their overseas operations.
However, Singapore stands to lose not only the cash generated within its borders but also the associated economic benefits including employment brought about by SMEs who felt they’ve already reached their peak in the lion city and are migrating overseas where opportunities for further growth abound.
In fact, overseas revenue growth of companies continued to outpace total revenue growth at 4.2% vs 1.3% according to IE Singapore’s 2016 internationalisation survey.
This supports the findings of a separate survey from Stripe detailing how six in 10 startups are already selling their products to international markets with almost half (49%) expressing the intention to immediately go global within the next year.
More than a third (35%) of startups launched within 2016 are already selling their products and services internationally, the survey added.
“This shows that Singapore companies continue to show keen interest in internationalisation, with it being increasingly important for a company’s growth. It is imperative that SMEs innovate and adopt technology/digitalise to be more efficient and productive to capture the growing opportunities in the region,” IE-SPRING told Singapore Business Review.
However, this trend also points to a robust support network enabling the internationalisation of SMEs, emboldening their efforts to go global and bring homegrown brands to an international market.
Also read: Proposed GST hike do not worry SMEs: survey
In fact, to support this endeavor, government agencies International Enterprise (IE) and SPRING Singapore will merge to form Enterprise Singapore this April to better nurture and the build the capabilities of Singapore enterprises in various stages including financing, capability development, technology and innovation.
“Our assistance provides a boost for Singapore companies in different areas depending on their needs and where they are at. Besides assistance from IE Singapore and SPRING, Singapore companies have access to many other sources for business advice and support for growth, such as the Trade Associations and Chambers (TACs) and SME Centres,” IE-Spring said.
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