SINGAPORE'S small and medium-sized enterprises (SMEs) are still enjoying global demand for their products and services despite the ongoing financial turmoil that has hit some of the biggest companies in the world.
While exports to the United States are slowing, some of the slack is being taken up by demand from Asia, Europe and as far away as Latin America and Russia, said Mr Png Cheong Boon, the new head of Spring Singapore.

'For our SMEs, there are still growth opportunities in different parts of the world and in different sectors,' said Mr Png, 38, in his first media interview since assuming the position of chief executive officer on Sept1. He had been deputy CEO since July 2003.

He said that despite the global slowdown, Spring has not seen a significant drop in business from local SMEs which have export operations.

In fact, the order books of smaller firms from industry sectors such as offshore and marine, oil and gas, transport and aerospace remain strong.

'The complaint from SMEs now is that they can't find enough manpower to fulfil those orders,' he said.

Even traditional sectors like furniture and textile production are reporting healthy sales.

'SMEs will also continue to play a very important role in anchoring a lot of the foreign multinational corporations (MNC) here,' he said.

'In particular, MNCs with IP-intensive products and services prefer to work with Singapore companies because of our strong respect...for IP,' added Mr Png, who was previously with the Economic Development Board, at which he spent 10 years.

SMEs are everywhere but their low profile means their role in the economy is 'historically' underestimated.

'One will find that it is always an SME that is either the supplier, distributor or even the manufacturer,' he said.

'The fact that they are able to produce good products and at competitive prices is proof that our SMEs have been doing a pretty good job.'

Official figures show that SMEs here account for 48per cent, or $107billion, of Singapore's gross domestic product.

They also employ 1.7million workers, or six out of every 10 in the local workforce.

Last year alone, SMEs added about 145,000 new jobs to the market.

According to Mr Png, the key to maintaining the solid performance is for local SMEs to stay competitive - something he said Spring would continue to focus on under his leadership.

He told The Straits Times that Spring would adopt a four-pronged strategy to help SMEs here become more innovative and competitive.

The first is to ensure that the local business environment continues to support 'enterprise formation and growth'.

This includes increasing the ease of doing business, such as reducing regulatory burdens and red tape, as well as providing easy access to business advice and support services.

'To this end, EnterpriseOne is a key initiative where SMEs...can access information pertaining to government services and programmes,' said Mr Png.

Second, to address different needs of SMEs from different sectors, Spring will work with industry associations to 'help propel the industries' growth'.

This will involve training specialised manpower, setting up technology infrastructure, and upgrading specific capabilities within different sectors.

'Through the Lead programme...we will support industry associations that are willing to take the lead to drive their industry growth,' said Mr Png, referring to Spring's Local Enterprise and Association Development.

Third, Spring will continue to provide funding or assistance to nurture technologically-savvy and innovative start-ups so that they can compete globally.

'Hopefully, some of them will grow to be the next Hyflux or our own Google.

'But these are long-term initiatives and we are likely to see some results only in seven to 10 years.'

Lastly, Spring will groom promising SMEs into innovative global businesses.

It has already taken 500 to 600 SMEs under its wing with the goal of helping them bump up their yearly turnovers from $10-20million, to $50-100million.

'At that size, they will be able to compete more effectively and tap on various sources of financing...to fund their growth.'

Spring aims to achieve that result by offering the SMEs more assistance in financing, markets exploration, management and technical know-how.

Mr Png said the pro-enterprise agency's plan is to ultimately expand the number of firms under the programme to about 1,000 SMEs within three years.

This article was first published in The Straits Times on September 22, 2008.