Helping SMEs as they restructure

In order to raise productivity on a larger scale within industries, the government should look into funding and building more common infrastructure and systems that SMEs can tap on. The government is one of the biggest buyers of goods and services from SMEs. It can better support companies as they strive to increase productivity, through the way tender requirement specifications are structured. I had earlier proposed a New Hire Wage Credit that will pay for a quarter of the salaries of new Singaporean hires for half a year, provided they have been unemployed or out of the workforce for at least four months. I hope the government will seriously consider this proposal because I believe it can help SMEs attract more Singaporeans, and reduce reliance on foreign workers.

I made this speech in Parliament on 11 March 2013 during the Committee of Supply debate for the Ministry of Trade and Industry.

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Many of the government’s productivity assistance schemes focus on helping SMEs improve productivity within their companies. In order to raise productivity on a larger scale within industries, the government should look into funding and building more common infrastructure and systems that SMEs can tap on. These large scale systems are often beyond the ability of individual SMEs to develop on their own.

An example of such a system is the National Electronic Health Records (NEHR) developed by MOH. This is not only used by hospitals, but in the pipeline also many private GP clinics, to share patient information and increase the efficiency and accuracy of diagnoses.

Next, the government is one of the biggest buyers of goods and services from SMEs. It can better support companies as they strive to increase productivity, through the way tender requirement specifications are structured. For example, government tender requirements for the development and maintenance of enterprise IT systems sometimes specify that vendors’ personnel must work on-site, when some roles can be run from offsite using secure remote access, saving travelling time. Providing more flexibility in tender specifications for companies to innovate can result in not only improved productivity but can also reduce costs for the government.

Lastly, the government should provide more incentives to help SMEs recruit local staff and talent. This is at the top of many SMEs’ wish list for Budget 2013, according to an ASME (Association of Small and Medium Enterprises) survey. I had earlier proposed a New Hire Wage Credit that will pay for a quarter of the salaries of new Singaporean hires for half a year, provided they have been unemployed or out of the workforce for at least four months. I hope the government will seriously consider this proposal because I believe it can help SMEs attract more Singaporeans, and reduce reliance on foreign workers.

Author: Gerald Giam

Gerald Giam is the Member of Parliament for Aljunied GRC. He is a member of the Workers' Party of Singapore. The opinions expressed on this page are his alone.