NR/02/2012

More than 3,900 SMEs upgraded capabilities in 2011, creating more than 15,000 new jobs and generating value-added of $4.4 billion

1. Despite global economic slowdown and increasing uncertainty, and faced with the challenge of rising business costs and tight labour situation domestically, Singapore SMEs¹ continued to upgrade their capabilities and improve productivity to stay competitive and tap opportunities in the global market.

2. In 2011, SPRING Singapore supported more than 3,900 SMEs through 3,800 upgrading projects. A total grant of $98 million was committed for these projects. The upgrading projects undertaken by SMEs covered a wide range of areas such as productivity improvement, technology innovation, service excellence, business leaders and human capital development, and business capabilities upgrading. The SMEs also came from a diverse range of industries in manufacturing and services. When fully implemented within the next three years, these SMEs are expected to create more than 15,000 new jobs and generate an additional $4.4 billion in value-add for the economy.

3. In addition, more than 12,000 SMEs were assisted by business advisors in the five Enterprise Development Centres (EDCs) at ASME, SCCCI, SICCI, SMCCI and SMa. In total, SPRING and its EDC partners reached out to over 112,400 SMEs in 2011.

4. SMEs took up fewer government loans last year than in 2010. Some 5,100 loans amounting to $1.4 billion were extended to SMEs under the various programmes² administered by SPRING’s 14 financial institution partners. The lower take-up for government loans was attributed to a healthy commercial lending climate locally.

Enterprise Upgrading

5. SMEs continued to tap various SPRING programmes for their upgrading efforts. These include productivity improvements, technology upgrading and innovation, business leader and human capital development, service excellence, business excellence, branding, design and intellectual property management. SMEs also tapped various industry-specific and sectoral capability development programmes administered by SPRING.

Productivity
6. Many SMEs have embarked on productivity improvements to stay competitive. In 2011, SPRING launched the productivity plans for the Retail, Food Services, Food Manufacturing and Furniture industries. The productivity plans addressed the challenges faced by each industry with key strategies to boost productivity. Common areas identified for improvement included automation and adoption of productivity improvement tools, product innovation, and workforce investment. A total of $223 million was set aside to fund these plans over the next five years. To date, some 90 companies in these four industries have embarked on their productivity upgrading efforts.

7. Local departmental store Metro is one such company. Metro is developing and implementing a new mobile Point-of-Sale (mPOS) system for its sales staff on the shop floor. The mPOS system will allow its sales staff to handle customer purchases anywhere in the store, thereby speeding up payment transaction and reducing waiting time for customers.

8. The Productivity@Work portal and the Productivity Management Programme (PMP), launched in 2010, also gained greater traction. In March 2011, SPRING launched an interactive IMPACT Assessment Tool on the portal to help SMEs diagnose their productivity performance online. The portal has since attracted more than 210,000 unique visitors. Under the PMP, productivity advisors at the five Enterprise Development Centres (EDCs) educate SMEs on productivity through workshops and provide one-to-one consultations and business diagnosis. To date, PMP has assisted over 4,100 SMEs.

9. E-Steel, a distributor of steel fittings and piping systems, tapped the PMP to improve its productivity. Following the PMP workshop and the PMP Productivity advisor conducting an in-depth diagnosis of the company’s productivity issues, E-Steel was able to streamline and automate its processes. As a result, the average time taken for a warehouse staff to locate a specific equipment was reduced from 30 minutes to 1 minute. Staff productivity increased by 30%, and the risk of accident was further minimised.

Technology Innovation
10. More than 160 SMEs tapped SPRING’s Technology Innovation Programme (TIP) for product, process and technology innovation, to develop new products and services, upgrade & automate existing processes as well as transform and develop new businesses. SPRING also funded the secondment of 53 research scientists and engineers (RSEs) from A*STAR, under its GET-Up programme, to 43 SMEs to help them in their technology road-mapping and upgrading effort. Other SMEs were also able to tap the resources and expertise in five Centres of Innovation set up in the polytechnics and research institutes through the TIP.

11. CEL Coatings, a provider of surface finishing services, had tapped the TIP for its technology innovation efforts. Through A*STAR’s GET-Up programme, three technology experts from SIMTech were seconded to CEL Coatings. They helped develop coating services for high-end biomedical invasive devices. Two of the technology experts subsequently joined CEL Coatings, further strengthening the company’s technology innovation capabilities and capacity.

12. S&W Engineering, a specialist in heat transfer equipment, primarily for the oil and gas industry, has tapped SPRING’s TIP to automate its manual processes such as cutting, lifting and welding, as well as to develop a specialised test machine for the oil and gas industry. As a result, it was able to increase its production capacity by 10%. The introduction of new equipment also reduced the need for labour, e.g. water jet cutting resulted in 24% less labour cost than the earlier grinding methods used by the company.

13. Under the Innovation Voucher Scheme (IVS), vouchers worth $5,000 each were awarded to 350 SMEs. SMEs redeemed these vouchers for technology-related services and consultancy at 21 knowledge institutions. In total, innovation vouchers have been awarded to 969 SMEs since the inception of IVS in March 2009.

14. SPRING also supported 27 companies for their Proof-of-Concept and Proof-of-Value projects under its Technology Enterprise Commercialisation Scheme (TECS), and around 1,000 companies for the adoption of infocomm technologies (ICT) under the iSPRINT programme, a joint initiative between the Infocomm Development Authority (IDA) and SPRING.

15. In view of the importance of technology innovation to SMEs’ competitiveness and growth, the TIP was extended for another five years from 2011 to 2015, with an additional budget of $320 million to support such efforts.

Business Leaders and Human Capital Development
16. Competent business leaders and talent are needed to help enterprises navigate the increasingly uncertain and challenging environment, and drive for growth. Given the tight labour situation, it is critical for companies to better develop and manage their human capital. This is even more so for SMEs given their limited resources and small employment size.

17. Under SPRING’s Business Leadership Initiative, more than 450 SME leaders and managers from close to 200 SMEs were trained in various advanced management and executive development programmes in 2011, making a total of more than 1,000 SME leaders and managers trained since its launch in 2008. 40 SMEs also took up the HR Capability Programme to strengthen their HR systems and processes for better recruitment and retention of talents. In addition, SPRING introduced the Part-Time Pool Programme in selected shopping malls to help ease labour constraints of SMEs in the Retail and F&B sectors.

18. Jumbo Group of Restaurants is a company that has put significant emphasis on the development of staff across all levels. The company has sent its leaders and managers for advanced management training; tapped experienced mentors for its leadership team; implemented structured training programmes for staff across all levels with support from the Workforce Development Agency (WDA) and the Institute of Technical Education (ITE); and joined the part-time pool programme to address its manpower needs. As a result, Jumbo was able to lower its manpower attrition rate, maintain quality food and service across its various outlets, and open new restaurants and concepts to further grow its business. 

Nurturing Growth-Oriented Enterprises

19. In addition to supporting individual enterprise upgrading, SPRING also works closely with some 500 promising Growth-Oriented Enterprises in key industries and supported their growth journeys through the years. These partnerships allow SPRING to better understand the enterprises’ needs and direct our facilitation and assistance more effectively. SPRING hopes to help them in their upgrading, business transformation and growth, so that they can propel to $100 million annual revenue in the next few years.

20. Rotating Offshore Solutions, Esco Micro and Mr Bean are three such companies that SPRING has been working closely with in the past few years. Despite the volatile global environment, these three companies have continued to upgrade, innovate, diversify, transform and internationalise, so as to seize new opportunities and grow.

21. Rotating Offshore Solutions (ROS) is upgrading its capabilities to go beyond the engineering and manufacturing of skids and modules for the Floating, Production, Storage and Offloading (FPSO)³ topside to that of the entire FPSO topside. Through SPRING’s facilitation, ROS is partnering a Norwegian company, Kanfa, which does process design for FPSO topsides. ROS complements Kanfa’s process design capabilities with its engineering and manufacturing expertise. Through this partnership, ROS will be able to garner larger and more complex international contracts. It looks set towards achieving its target of $100 million sales within two to three years time.

22. Esco Micro started as a specialist in clean air technology, developing cleanroom solutions for the hard disk drive and semiconductor industries, but it has since diversified into the biomedical markets. With support from SPRING’s TIP, Esco Micro successfully designed and developed containment isolators for the pharmaceutical industry. It subsequently set up R&D teams in Singapore, US and China. Today, Esco Micro is one of the top three companies designing and manufacturing biohazard cabinets globally, with a presence in more than 100 countries and direct offices in more than 10 countries.

23. Mr Bean, a leading chain of soya bean food and beverage outlets, has continuously upgraded its business and expanded internationally over the years. Tapping various SPRING programmes since 2007, it has not only strengthened its brand but improved its customer service, food safety and productivity. Its strong branding has seen it expand domestically from 19 outlets in 2007 to 56 in 2011. Mr Bean has also entered new markets such as China, Korea and Japan, with plans to further expand to other parts of Asia. Through SPRING’s support, Mr Bean invested in a new soya milk production machine last year, which increased its production capacity by 67% and reduced production time by 10%.

Nurturing Innovative Start-ups

24. SPRING looks into the seeding and nurturing of innovative start-ups to generate a pipeline of high-growth enterprises. A suite of funding programmes is available to help start-ups kickstart their businesses and to commercialise their products. SPRING also provides funding under the Incubation Development Programme (IDP) to incubators and venture accelerators to nurture start-ups in their formative stages. Since 2008, the IDP has supported 11 incubators/ venture accelerators, which in turn have incubated some 350 start-ups.

25. Last year, SPRING SEEDS Capital invested in six innovative start-ups, bringing the total to 191 since it was introduced in 2001. The Young Entrepreneurs Scheme (YES!) also supported entrepreneurship programmes in 85 schools and funded 66 start-ups set up by youths below the age of 26.

26. In Vitro was one of the 66 start-ups funded under the YES! Start-Up. In Vitro designs and manufactures bio–mechanical air filtration systems that eliminate invisible but health–threatening contaminants. Its technology is the first in Asia. In Vitro was also incubated by NTU Ventures which provided mentoring and lab facilities to the company. Into its second year of operation, In Vitro has secured an additional funding commitment of $200,000 from angel and corporate investors.

27. WaterTech, which specialises in integrated systems for water and wastewater treatment, is a new start-up that SPRING SEEDS Capital has invested in last year. In addition to providing equity capital, SPRING SEEDS Capital also introduced a business mentor and new investors to WaterTech so as to help grow its business. It has since successfully secured new contracts for waste water treatment plants in North Asia. 

Driving Industry Growth

28. SPRING works closely with the trade associations and chambers (TACs) to drive industry upgrading and growth. Together with International Enterprise Singapore, it provides funding support through the Local Enterprise and Association Development (LEAD) programme to TACs so that the TACs can undertake projects and deliver programmes to upgrade their industries and enterprises, and help grow new markets.

29. Last year, seven TACs secured LEAD funding for new industry projects. New associations that joined the programme were the Waste Management and Recycling Association of Singapore (WMRAS), Singapore Chinese Chambers of Commerce and Industry (SCCCI) and Singapore Green Building Council (SGBC). To date, 30 TACs have been funded through LEAD. By partnering the TACs, specific industry and enterprises needs can be addressed in a more targeted and effective manner.

30. The Textile and Fashion Federation (TaFf) is an association that has played an active role to upgrade its members and grow the industry. It has developed and delivered programmes ranging from manpower training, process optimisation and internationalisation. It is currently spearheading the transformation of the fashion, textile and apparel industry in Singapore into one that is focused on fashion design. With funding support from LEAD, TaFf hopes to strengthen the design capabilities of Singapore’s fashion industry through a comprehensive range of initiatives like Asia Fashion Exchange (AFX), Star Creation and Fashion Design Incubator which supports the mentoring and development of new fashion designers.

31. The Singapore Precision Engineering and Tooling Association (SPETA) too plays a critical role in encouraging local Precision Engineering (PE) companies to diversify into higher value industries such as medical technology (Medtech). SPETA facilitated collaborations amongst local PE companies in product and market development so that they could offer complete product and service solutions to the global market. SPETA also successfully launched a two-day Medtech Manufacturing Tradeshow in March 2010 to showcase the capabilities of Singapore PE companies to global companies. Given its initial success, SPETA plans to expand the event into a regional tradeshow, which will see participation from regional companies and strengthen Singapore's position as a preferred manufacturing site for medical devices in Asia.

SPRING’s Focus for 2012

32. Moving forward, Singapore SMEs would face a slow growth environment with tighter labour constraints. However, new opportunities exist in regional and emerging markets. Hence, SMEs need to maintain their upgrading efforts in order to stay competitive, overcome these challenges and grow.

33. In 2012, SPRING will step up our efforts to encourage more SMEs to improve productivity, pursue innovation, upgrade capabilities, and attract and develop their human capital. We will work closely with our partners – EDCs, TACs, financial institutions, institutes of higher learnings and research institutions – to deliver relevant programmes to support SME upgrading. In particular, we want to partner with the TACs to drive industry upgrading & restructuring, as well as reach out to and support small and micro enterprises. Through these efforts, we hope to see more SMEs undertake upgrading and innovation to improve their productivity and competitiveness, transform their businesses and seek further growth in the global marketplace.

34. Mr Philip Yeo, Chairman, SPRING Singapore, said: "SPRING is committed to helping local companies adapt to the challenging economic landscape. In addition to the programmes already in place, we will be introducing new initiatives in 2012 to help SMEs increase productivity and upgrade their business capabilities. If our SMEs are able to transform their processes and strengthen their human capital, I am confident that they will be able to capture new growth opportunities regardless of the economic environment."


¹ According to the Department of Statistics, in 2010, there were about 154,000 SMEs (local & foreign) in Singapore, making up 99% of all registered enterprises. They employed about 67% of the total workforce and accounted for almost 60% of GDP.
² These programmes comprised the Local Enterprise Finance Scheme, Micro Loan Programme, Bridging Loan Programme and Local Insurance Scheme.
³ A floating production, storage and offloading (FPSO) unit is a floating vessel used by the offshore industry for the processing and storage of oil.