Budget 2024 > Latest > Commentary
Mr Derrick Goh (Nee Soon): Sir, digitalisation remains an imperative for our SMEs in a rapidly evolving technology space, to thrive and capture opportunities in the new economy. The year 2023 saw the breakthrough of AI and its use cases in the real world. But as is always said, AI will not replace humans but the person using AI will. In essence, SMEs who will succeed better are those that can adapt and transform quicker, by viewing digitalisation and AI as a friend instead of a foe.
As a practitioner using various forms of AI, including GenAI, in my work to sharpen effectiveness and productivity in risk management and auditing, I can understand why SMEs may face and see AI as intimidating. There is a need to help SMEs dispel a “fear of the unknown” and the notion that AI is reserved only for MNEs.
In this regard, can MTI share its plans to help SMEs further accelerate their digitalisation so that more local businesses can harness AI to transform and increase productivity?
On sustainability, I am glad that Budget 2024 has covered key aspects of going green as a competitive advantage, because MNEs have started on their sustainability journey earlier and would expect the same for our own SME suppliers. I am also glad to learn that SMEs in more sectors will benefit from green loans and the Energy Efficiency Grant, which I had asked for at last year’s Committee of Supply debate and Government support to be more inclusive.
Yet, while advancing in the green journey is essential and more Government funding is available, a DBS study in 2023 found that only 37% of SMEs had a clear roadmap on how to achieve their sustainability goals. Many cite having to navigate complex reporting standards as a hurdle.
On this note, what is MTI’s assessment of the progress and effectiveness of existing grants and initiatives, such as the Enterprise Sustainability Programme and how may they be enhanced to help our SMEs be more ESG-savvy?
While opportunities in the digital and green economy are aplenty, we know that transformation is not easy and more funding on its own is not sufficient. What matters more fundamentally, is for SMEs to shift their mindsets and be willing to accelerate their efforts. For those who are, they should be provided with ready-access to expertise. This is where SME Centres and TACs, as critical nexus for engagement and advisory, can play a more proactive role to nudge and help SMEs digitalise and go green.
In my engagement with the industry, a feedback suggested by SMEs was for such Centres to go beyond the marketing of grant options and providing generic guidance; and offer more in terms of business development advice and more customised expertise and guidance.
As such, can MTI share on three areas.
One, whether there are plans to boost the effectiveness of SME Centres by enhancing its advisory capabilities and sharpening its own key performance indicators (KPIs) from Level 1 or baseline targets, such as number of SME visits, to be more aligned with the outcomes, such as SME productivity and customer growth of the portfolio of SMEs they cover?
Two, whether TACs can be guided to deepen understanding of their own members’ profile to provide more targeted facilitation and support as well as more effective cross-learning between its members?
Thirdly, whether we can build a more comprehensive support ecosystem for SMEs, such as by (a) synergising the roles of SME Centres and TACs with the enhanced Partnerships for Capability Transformation Scheme for SMEs to connect more easily to learn digital and green strategies; (b) deepening collaborations with Institutes of Higher Learning for training; and (c) leveraging clan associations with wide business connections for advocacy.
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