Singapore Growth Plan Shows Us the Way to Support SMEs
Byline: DYLANJONESEVANS THE PROFESSOR WHO SHOOTS FROM THE HIP
LAST week, as the Chancellor of the Exchequer was announcing his measures for getting the British economy back on track, one of the most productive and innovative smaller nations in the world was also starting to implement its own budget measures to restructure its economy over the next few years. And unlike George Osborne the Finance Minister for Singapore decided that the restructuring of his nation's economy over the next three years would be focused on supporting a dynamic small to medium sized enterprise (SME) sector.
This would be achieved through developing a "Quality Growth Programme" to help businesses upgrade their facilities, create better jobs and raise wages. It would also focus specifically on improving productivity for individual companies and specific industries. One of the measures introduced under this plan that will certainly raise eyebrows in Europe is the support that the Singaporean Government is giving small businesses to raise their employees' wages.
This will be done through a so-called Wage Credit Scheme (WCS) that will co-fund any increase in wages given to an employee in any year between 2013 and 2015.
For instance, if an employer increases the gross monthly wage of his employee by PS200 in 2013, the Government will pay 40% of the PS200 wage increase, not just for 2013 but also the remaining two years.
The Singapore Government is also providing around PS700m over the next three years towards a 30% corporate tax rebate for bills up to PS15,000 per annum to help small firms with cost pressures.
However, the key focus of the budget are measures which are focusing specifically on raising productivity and ensuring that Singapore retains its status as one of the most competitive economies in the world.
For example, the Collaborative Industry Projects scheme will encourage consortia of firms to develop solutions to industry-specific productivity challenges whilst a further initiative will foster SME collaborations with large enterprises so as to enable co-innovation, capability upgrading and sharing of best practices within the supply chain.
There is also a specific focus on new growth industries with an appreciation that disruptive technologies such as robotics and 3D printing will be changing the future of advanced manufacturing.
Indeed, the Singapore government will set aside PS250m over the next five years to support a "Future of Manufacturing" plan which will work with key industry partners, universities and research institutes to test-bed new technologies and develop applications that can be commercialised by local firms. …