SINGAPORE'S 148,000 small and medium-sized enterprises (SMEs) accounted for 45 per cent of the country's gross domestic product, or $95.7 billion, last year.
They employed 62 per cent of the workforce, which works out to about 1.56 million people, and the well-being of these SMEs affects the lives of others too.
Spring Singapore's deputy chief executive Png Cheong Boon (below) says: 'They provide a source of products and services to the domestic market, so we need them to be competitive. Or else, Singaporeans will pay more for these products and services.
'And if they are not competitive, they also cannot pay their employees well.'
He adds that there is another group of SMEs which serve multinational corporations (MNCs), that need to be competitive too. 'If not, the MNCs will move away from Singapore to places like China,' he says.
'We also need to grow our external wing. We need a strong SME sector that can produce companies that are strong enough to do well globally, companies that become global players - the Singapore MNCs of the future,' he says.
Mr Png observes that over the years, while the distribution by size of companies has stabilised, there have been qualitative changes in our SMEs.
'In this increasingly global economy, more SMEs go global even from Day 1 and look at the global market from the onset. We are also seeing more technology-based SMEs that produce higher value-added products and services, as well as a change in the leadership in our SMEs,' he says.
In the past, the top management of SMEs fitted the description of the typical 'towkay' (boss). Usually in their 50s and 60s, these were entrepreneurs 'out of necessity' who found it difficult to ensure succession because their children were not keen to follow in their footsteps.
'But now, the kids are coming back to help in the company. They are more experienced and better educated. They may be overseas trained. They may have worked in big companies before. It is a new breed,' he says.
He notes that the push in entrepreneurship in Singapore society has contributed to a climate in which it is acceptable to be an entrepreneur and run a family business.
'There has been a mindset shift and societal pressure is positive,' he says.
Those from the younger generations who have a more global outlook and are not interested in being salaried workers, preferring to be their own boss, can start something on their own or join the family business.
And this spells good news for the renewal and continued well-being of our SMEs.
Comparing the Singapore economy to a human being, Mr Png says: 'You need two strong legs to run fast. Historically, the MNC leg has been strong and the SME leg not as strong. By building up the SME leg, we can run faster.'
