Speech by Mr. Louis Ng Kok Kwang, MP for Nee Soon GRC at the Second Reading of the Enterprise Singapore Board Bill [Bill No. 3/2018]
Sir, I stand in support of this Bill, which will consolidate and coordinate government efforts in nurturing a vibrant ecosystem for SMEs. I wish to raise just four points for clarification and consideration.
Supporting local SMEs in internationalising
As the Minister would be aware, a recent survey by QBE Insurance found that 14% of SMEs intend to expand overseas while 45% have no plans to internationalise soon. Insufficient funding, unfamiliarity with foreign markets, concerns about competition in foreign markets were some of the reasons cited. Enterprise Singapore has the mandate of supporting our enterprises in internationalising. How does the Ministry intend to respond to these findings?
Managing the transition process
The merger of SPRING and IE Singapore is a significant undertaking and Minister Iswaran has emphasised that the priority is to “ensure a smooth transition”.
Assurance had been given that in the transition period, support for SMEs will not be affected, and companies can continue to apply to SPRING and IE for assistance under the existing programmes.
At the same time, Enterprise Singapore is intended to streamline existing grants and provide a comprehensive suite of support from a single agency. Can the Minister share whether he foresees any issues in harmonising the programmes of the two agencies and what steps will be taken to reduce any inconveniences to the companies?
Further, I understand that SME accounts are currently managed by different agencies. Minister Iswaran had highlighted efforts to streamline the account management so that there is a principal agency managing a particular relationship with a company whether it is EDB, IE or SPRING. Can the Minister provide an update on its efforts and clarify whether Enterprise Singapore will be the principal agency managing all SME accounts?
Ensuring continuity of support for small and micro-enterprises
During Question Time in September 2017, Minister Iswaran had alluded to the challenges in synthesising the missions of two organisations and the concern that one may prevail over the other.
With this focus on overseas expansion, small firms may have concerns of being neglected. This concern was articulated by Singapore Business Federation Teo Siong Seng who has voiced the concern of whether micro-enterprises such as mom-and-pop shops in HDB estates will be ignored in the process.
Minister Iswaran has articulated an inclusive mission to “create globally competitive Singapore enterprises” which will apply “to the whole range of enterprises from start-ups to scale-ups and large local enterprises”. He has emphasised that there would be “no dilution or diminution in terms of the services rendered to the wide swathe of SMEs that we have in our ecosystem”.
While this is heartening to hear, can the Minister share what concrete plans it has to ensure that small and micro-enterprises are not neglected?
Promoting sustainability (or responsible business practices) among SMEs
I would also like to highlight the need to include sustainability as part of the conversation on growth of our SMEs.
At the Singapore Apex Corporate Sustainability Awards in 2017, Minister Heng stated that pursuing sustainability is a “matter of survival” for businesses. As highlighted by Minister Heng, “[s]tudies show that sound sustainability standards lower a company’s cost of capital, and result in better operational performance. Investor demands and customer expectations are increasingly favouring sustainable businesses.”
Environmentally and socially sustainable growth has been receiving greater attention. For instance, SGX has made it mandatory for all listed companies to report their environmental, social and governance practices from 2018 onwards on a “comply or explain” basis.
Beyond large listed companies, we can do more to increase uptake of sustainable business practices by SMEs who are the biggest employers and contribute to the bulk of growth. SMEs make up 99% of our enterprises. Individual efforts by SMEs to adopt sustainable practices would collectively represent an enormous leap forward.
To be sure, there are moves in that direction. SMEs are part of the supply chain for listed companies and would be impacted by the SGX regulation. I also applaud initiatives by BCA, such as increasing funding for SMEs to green their premises, providing free feasibility assessments against BCA Green Mark standards, and piloting the Behavioural Change Programme to encourage building users to adopt sustainable behaviours. Another initiative is the Energy Efficiency fund, which supports businesses including SMEs in identifying, and undertaking energy efficiency retrofits.
We need more of such initiatives that are specifically targeted towards SMEs. In 2010, the OECD stressed that “the prospects and strategies for a green growth economy cannot be entirely understood without taking fully into account the production, technology and management practices of (SMEs)”.
Sustainability efforts may need to be tailored to the needs of SMEs. For instance, SMEs may face challenges of cost, lack of resources, lack of time, or difficulty in implementing existing sustainability indicators that are too complicated to be adopted or too high level for practical usage by small companies.
Sustainable growth is possible for SMEs. Founded by Susan Chong in 2002, Greenpac is a multi-million dollar business that provides eco-friendly packaging to Fortune 500 companies.
What we need is a concerted effort in pushing the sustainability agenda for SMEs and Enterprise Singapore as the leading agency for SMEs would be well-placed for that. Can the Minister share what plans Enterprise Singapore has to support SMEs’ adoption of sustainable business practices?
I believe that Enterprise Singapore can be greater than the sum of its parts and support the move, which demonstrates a whole-of-government approach in responding to future developments and challenges. Sir, I stand in support of the Bill.