THERE is a common mistaken belief that productivity refers to a company's financial showing, and that as long as the business is recording higher and higher revenues and profits each year, then it is becoming more and more productive.

But productivity is actually a more nuanced concept. It refers to the company's use of its available resources - a productive company would be able to use the minimum amount of resources to achieve the maximum possible output.

These resources include time, manpower, land and capital.

And often, more productive use of resources would result in saved costs, reduced wastage and higher earnings.

One effective way to achieve this outcome is by adopting new technology.

Regardless of what kind of industry a company is in, there is usually some kind of technology that can help it to improve its productivity.

A company could use technology to invent a new product that would boost its sales. It could invest in the latest high-tech equipment that would help it to streamline its processes and produce more goods faster or with fewer staff.

Some restaurants, for example, have equipped their waiters with hand-held devices to record customer orders and wirelessly transmit the data to the kitchen, where dishes can then be prepared and served up faster.

'To raise productivity, more often than not, it calls for a shift towards best practices,' said Dr Ahmad Magad, the president of the Singapore Productivity Association.

'The more you are able to apply the latest technology to your business, the more productive will be your operations.'

Dr Magad is also a council member of the National Productivity and Continuing Education Council.

A strong management that can identify and embrace new technology and that can help create an innovative environment within the company can dramatically increase productivity, Dr Magad said.

One case in point is Hup Huat Noodles. The noodle manufacturer, in business for more than 60 years, recently recognised the need for innovation as the marketplace was getting tougher, with consumers more concerned about eating healthier foods.

So Hup Huat turned to the Food Innovation Resource Centre at Singapore Polytechnic and, with the technology and expert help it received there, it developed a new, healthier type of noodle.

This new noodle is made with organic flour, enriched with fibre, has a longer shelf life than Hup Huat's traditional products and has lower fat content. It is also less prone to turning rancid.

While Hup Huat used technology to invent a new product, fruit and vegetable seller Fresh Direct saw technology as a way to lift sales of its existing products.

Fresh Direct started in 1999 by selling whole fruit and vegetables to bulk purchasers.

But a few years ago, it realised that there was much higher demand for fruit and vegetables that had already been cut. Buyers include restaurants and hotels.

Fresh Direct applied for a grant from Spring Singapore's Technology Innovation Programme (TIP) to develop a unique cutting system. Now the technology it has in place not only produces cut fruit and vegetables at high speed, but it also helps to extend their freshness and uses very little water and energy to do the job.

Since installing the processing system, Fresh Direct has seen its water consumption drop by up to 60 per cent.

While many firms have trod a similar path as Hup Huat and Fresh Direct in embracing technology, Singapore still has some way to go.

According to a survey of global competitiveness by the World Economic Forum, Singapore ranks second overall.

But this is largely due to the fact that Singapore has very efficient institutions and a good business infrastructure. When it comes to 'technological readiness', the survey ranks Singapore 10th in the world.

Other relatively weak points are 'business sophistication', in which Singapore ranks 15th, and 'innovation', in which the Republic is 8th.

Spring's director of technology innovation Fung Mok Wing said many small- and medium-sized enterprises (SMEs) tend to hold back from investing in new technology because they lack the financial resources.

But he pointed out that Spring has several initiatives in place to help SMEs with the financial burden of adopting or even creating new technology.

Under TIP, for example, Spring provides grants that defray up to 70 per cent of the cost of a technology project that an SME wants to undertake.

SMEs can also apply for local and overseas experts from polytechnics, universities, research institutes and the industry to be seconded to their company and TIP can help to defray some of the cost of employing these experts for up to two years.

Then there are the Centres of Innovation, which are one-stop centres offering technology consultancy and advice to help SMEs identify practical technology ideas that can be quickly adopted. These centres can also help companies test and develop technology projects.

Mr Fung said that some companies, being unsure about the potential returns, prefer to wait for their peers and rivals to invest in a new technology and see how well it works out for those other firms, before they do the same.

'But the drawback is that your competitors will have a head start on you, and by the time that you develop the technology for your own firm, you will lose the innovative element and the premium pricing that comes with it, and there will be a lot of catching up to do,' he added.

It's particularly important for Singapore companies to step up their productivity levels as the population will not be expanding at the same rate as before, said Dr Magad.

'A large part of our GDP over the 10 years between 2000 and 2010 was achieved by and large through the expansion of our workforce, both local and foreigner,' he noted of Singapore's gross domestic product.

'On average, our GDP grew 5 per cent every year during this period, but only about 1 per cent of that growth could be attributed to productivity increases, while the remaining 4 per cent came about as a result of the expansion of our workforce.'

yasminey@sph.com.sg

About the programme

SPRING'S Technology Innovation Programme has benefited

more than 2,500 small and medium-sized enterprises (SMEs) since its launch in 2006.

An additional $320 million has been committed over the next

five years to encourage another 3,500 SMEs to adopt technology innovation.

Under the programme, Spring provides grants for SMEs to leverage on technology to improve or come up with new products or processes. Support is available for technology projects at different stages of innovation development:

FOR SMEs NEW TO TECHNOLOGY INNOVATION

THE Innovation Voucher Scheme is available for SMEs which may not be familiar with technology innovation to take the first step.

Under the scheme, any SME with an innovative idea can apply for a $5,000 voucher, which can be redeemed for technology services and advice at any of Spring's 19 knowledge partners at the polytechnics and research institutes.

FOR SMEs READY TO USE TECHNOLOGY TO DEVELOP OR IMPROVE PRODUCTS/PROCESSES

SPRING also helps to defray 50 per cent to 70 per cent of the costs for SMEs in tapping technology for developing or improving products, processes or business models.

Applicants need to demonstrate how the strategic investment in technology innovation is part of their overall business strategy.

FOR SMEs KEEN TO BUILD UP IN-HOUSE EXPERTISE

SMEs can engage local and overseas experts from institutes of the Agency for Science, Technology and Research as well as the industry for up to two years to help build up their in-house capabilities in Singapore.

Spring will cover part of the salaries, living expenses (for secondees from abroad) and some related costs for up to two years.

Applicants must show a commitment to technology innovation as part of their overall business strategy.

To qualify, SMEs need to meet the following criteria:

• Be registered or incorporated in Singapore;

   

   

• Have at least 30 per cent local shareholding;

   

   

• Have group annual sales of not more than $100 million or employment size of not more than 200 workers.

In addition, Spring collaborates with the Infocomm Development Authority (IDA) to make infocomm technology adoption affordable for SMEs. This is done by supporting their first adoption of an infocomm capability under iSprint (Increase SME Productivity with Infocomm Adoption and Transformation).

The scheme, introduced by the IDA in collaboration with Spring and the Inland Revenue Authority of Singapore in March 2010, provides funding for SMEs to adopt infocomm technology to improve productivity.

It offers SMEs support on a wide range of infocomm adoption, from simple solutions that improve business operations to innovative uses of technology that transforms a business or sector.

For more information on the scheme, visit http://www.ida.gov.sg/sme/isprint

THE TECH EDGE

'To raise productivity, more often than not, it calls for a shift towards best practices. The more you are able to apply the latest technology to your business, the more productive will be your operations.'

Dr Ahmad Magad

BE THE FIRST

'But the drawback is that your competitors will have a head start on you, and by the time that you develop the technology for your own firm, you will lose the innovative element and the premium pricing that comes with it...'

Mr Fung Mok Wing