But slow cash flow and global growth challenge these ambitions.
About 51% of middle-market executives in Singapore are targeting growth rates of 6-10% for the rest of 2018, EY revealed. This is higher than the International Monetary Fund’s current GDP forecast of 3.9%, indicating optimism towards business conditions and opportunities.
According to the EY Global Barometer report, 30% of executives cited overseas expansion as a growth priority to overcome the limitations of the small domestic market. Mergers and acquisitions (M&A) is the second-most cited growth strategy at 19%.
EY noted that inorganic growth could be a route that Singapore executives are considering for international expansion. EY Asean growth markets leader Choo Eng Chuan commented, “Many Singaporean entrepreneurs are open to overseas collaboration. This can take many forms. For example, by selling part of their business to an external partner, they can access new markets and explore greater opportunities. This may explain why strong alliances with external partners is the key path to boost agility for more than one in four of the country’s respondents.”
Meanwhile, slow or flat global growth is perceived as the main external risk for 41% of Singapore companies, compared with 25% in the rest of the world.
Another key challenge to growth is insufficient cash flow, a factor cited by 38% of the Singapore companies. Singapore businesses’ concerns with cash may explain why improving supply chain and operations efficiency is considered one of the top growth accelerators (29%).
The survey also found that Singapore has the third-highest adoption rate of AI at 9%, following closely behind China and Netherlands that both tie at 10%. A further 72% of Singapore companies said they plan to introduce AI within two years.
“Despite readily embracing AI, the Singapore market is not a leader in the mature application of new technologies,” EY said. Many businesses still identify technologies with the traditional roles of improving process efficiencies (29%) and financial data (25%). Meanwhile, one in five (20%) consider technological disruption as the greatest challenge to growth, behind cash flow.
Moreover, three in 10 said that attracting talent with the right skills tops the list of growth accelerators. EY added that 40% of companies are planning to hire more full-time talent and 39% are looking for additional part-time employees, contractors, or freelancers.
As Singapore companies grow their teams, more than half (54%) believe that the ideal organization is one that is able to attract younger and digitally-native talent.
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