Firms grapple with consumer and worker safety, consistency in service quality, and data privacy issues.
Singapore’s small and medium-sized enterprises (SMEs) are struggling to meet customer needs despite the widespread push to adopt artificial intelligence (AI) and advanced robotics, according to a study conducted by professional services firm Aon.
Aon Inpoint’s 2019 SME InsuranceSurvey, which incorporates insights from over 300 SMEs in Singapore, found that failure to innovate tops the list of risks faced by Singapore SMEs.
“In addition, there is a clear link between the failure to attract and retain top talent and the ability to deal with increasing competition,” the firm highlighted, with workforce shortage becoming more pronounced as companies strive to hire high performers and strike a balance between local and foreign talent.
So what are the top 10 risks Singapore’s SMEs need to brace themselves for?
1. Failure to innovate / Meet customer needs
2. Damage to reputation / brand
3. Increasing competition
4. Economic slowdown / Slow recovery
5. Cash flow / Liquidity risk
6. Major project failure
7. Workforce shortage
9. Corporate governance / Compliance burden
10. Loss of intellectual property / data
When asked to predict the impact of these risks in two years’ time, SMEs selected ‘Increasing competition’ as their top concern, with ‘Failure to innovate / Meet customer needs’ coming in third.
According to Richard Tan, head of sales at Aon Singapore, SMEs must have the right corporate governance structure and risk management process in place as they look to innovate and internationalise.
Since Singapore is a mature economy with only five million people, up to 50 percent of SMEs are considering internationalisation. According to Aon, over 60% of SMEs are seeking external financing via bank loans to power their growth plans and help with cash flow management due to delayed payments from customers.
“In addition, the ‘On Demand’ economy has brought about issues around consumer and worker safety, consistency in service quality, and data privacy. Having a deep appreciation of these evolving risks and taking appropriate measures quickly could make or break their business ventures,” he noted.
Do you know more about this story? Contact us anonymously through this link.