MANY local businesses continue to expand impressively each year, with increasing numbers venturing outside Singapore.

Some of them have done so well that they are on the threshold of becoming Singapore's own multinational corporations (MNCs).

This assessment comes from no less an industry watcher than International Enterprise (IE) Singapore's chief executive officer, Mr Chong Lit Cheong.

Mr Chong says of these privately-owned small and medium-sized enterprises (SMEs): "They can serve as role models to other aspiring entrepreneurs. On the other hand, we also see these companies as potential global players - Singapore's own MNCs in the making."

Each year sees more SMEs, described as Singapore's second wing of economic development, making an impact as they gain expertise and confidence, thanks to steadfast encouragement and help from the Government, its agencies and business organisations.

Today, there are 148,000 SMEs which make up 99 per cent of all enterprises here. They employ six out of every 10 workers and account for 46 per cent of total value added in the economy.

Over the years, the many winners of Enterprise50 as well as e50.startup awards, established by leading management and technology consulting company Accenture and The Business Times (BT) to recognise entrepreneurial excellence, attest to the growing sophistication of local businesses.

The E50 was launched in 1995 and its sister e50.startup came on the scene in 2002. The latter award was initiated to recognise outstanding young enterprises which have yet to chalk up track records to qualify for the main awards.

Accenture's country managing director, Mr Seah Chin Siong, says the E50 award has become "a valuable endorsement and a mark of recognition" here and abroad.

He adds: "The ranking is seen as a 'seal of approval' as these companies have come forward to be recognised among their peers. Winning boosts staff and employee morale as companies try to better their rankings year after year. Winners are also entitled to use the e50 logo on their corporate collaterals and they receive extensive media coverage.

"Many winners have also mentioned that more doors are open to them with regard to corporate incentives and financial institutions and their wins have also helped increase the quality of  responses from recruitment efforts."

On SME participation in overseas trade missions and trade fairs, Mr Chong says many more are joining in, and tapping on IE Singapore's products and services to build up their capabilities and connections to export, and to find overseas business partners and opportunities. IE Singapore is one of the supporters of the awards.

Mr Chong adds that the report of SME Development Survey 2007 reveals that 70 per cent of respondents have turnover generating from outside Singapore, up from 59 per cent the previous year. A majority had engaged in overseas business for more than three years.

"As for the E50 winners this year, more than half their turnover is earned through their overseas operations. These results show that more enterprises are now recognising the need to grow their operations beyond their domestic market," he says.

Other supporters of the awards are Spring Singapore and the InfoComm Development Authority (IDA). OCBC Bank is the sponsor.

Says Rear-Admiral (NS) Ronnie Tay, chief executive officer of IDA: "Infocomm technology can help companies improve their business operations and expand their market presence. This gives them a competitive edge in an increasingly globalised market environment."

Under the Infocomm@SME programme, IDA, together with partners such as Spring Singapore and the Singapore Chinese Chambers of Commerce and Industry, Singapore Polytechnic and the Singapore IT Federation, have put in place initiatives to help SMEs understand and exploit infocomm technology.

"The aim is to raise the level of infocomm adoption among SMEs which form more than 90 per cent of businesses in Singapore."

Ranking of the 50 winners in the E50 category is based on a weighted-average computation of a set of performance indicators over a three-year period and represent a wide range of business activities.

Among the indicators are an SME's operating profit before tax, its turnover, return on total fixed assets, percentage turnover from overseas operations, and amounts spent on training and research. Also under scrutiny are its management philosophy, product innovation and market presence.

All are also judged by their knowledge management, revenue growth, revenue per employee, R&D, marketing presence, innovations and strategies as well as their impact on the market. Profiles of their management teams and their investors are also looked into.

Accenture's Mr Seah says winners of the e50.startup awards, which possess "notable innovation and enterprising spirit", are assessed as stringently, except for their years in operation.

"Judges look at a combination of quantitative and qualitative factors. Company visits are also carried out randomly to verify the content of submissions and determine the authenticity of these companies."

He says that companies which make the list also "enjoy the prestige of being recognised as Singapore's most promising enterprises".

An E50 win, adds Mr Chong is a big plus for companies seeking to go public. And, according to Accenture, 103 winners have since been publicly listed.

When nominations opened in April for this year's awards, Mr Philip Yeo, chairman of Spring Singapore, said that his organisation would be a "one-stop shop" and an enterprise development agency for SMEs seeking public and private help to grow and expand their businesses.

At the event, BT's editor, Mr Alvin Tay, said some E50 winners use the rankings as stepping stones to list on the Singapore Exchange while others "gain in terms of visibility and brand recognition".

To this, OCBC Bank's head of enterprise banking, Mr Sng Seow Wah, observed that the awards were not merely a ranking exercise, nor were they simply about giving the winners a pat on the back.

"They are about giving recognition to deserving local SMEs that overcame great odds to succeed in their respective domains, and providing them that extra "wing" to fly higher," he added.

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