INTERNATIONAL Enterprise Singapore is running its fourth Singapore International 100 ranking exercise to recognise and encourage companies here to grow overseas.
And there isn't a better time than the present, says IE Singapore's deputy chief executive officer Ted Tan.
'The worsening of the economic outlook makes it even more critical for financial institutions and companies to take a long-term view and position themselves to take advantage of new growth opportunities,' he says. 'They should look to diversify their investments, supply chain and customer base. It's a good time to position for the future.'
The Singapore International ranking was set up to urge local companies to grow overseas by identifying role models and raising awareness of key markets. But IE Singapore is quietly doing many other things with the same purpose in mind.
Mr Tan says it has adopted a three-way strategy to meet companies' common concerns about venturing aboard, which are: finding suitable contacts, lack of financial capability, lack of understanding of regulations, and cultural differences. IE Singapore calls its strategy a 3C framework - Connections, Competency and Capital.
Connections are achieved through the agency's network of offices in over 30 locations globally, which help link Singapore companies with interested business partners and government officials. The offices also help organise business missions, fairs and seminars.
'Last year, more than 5,500 companies participated in such activities,' says Mr Tan. Besides private sector partners, IE Singapore uses its contacts with organisations such as the Asian Development Bank and World Bank to match-make projects with Singapore partners.
IE Singapore is especially encouraging SMEs to venture abroad, by including in the rankings this year a new category on top internationalising SMEs. It is also helping by encouraging small companies to form groups, says Mr Tan.
'As Singapore companies tend to be smaller in size than their international competitors, IE Singapore's International Partners (iPartners) programme catalyses the formation of international alliances between Singapore-based companies to sharpen their competitiveness and maximise their chances of success in overseas ventures.'
IE Singapore has so far supported 31 such alliances comprising 157 companies, with projected overseas sales of $3.13 billion by 2011.
And for those small companies that need capital finance, IE Singapore helps by providing grants, financial tools and tax incentive schemes. 'Access to financing is a key concern for Singapore companies looking to expand overseas, and particularly during this time where there is turmoil in the global financial system,' says Mr Tan.
What will also be especially helpful to Singapore companies are free-trade agreements signed recently - with China last month and Peru earlier in the year. These will allow Singapore exporters easier access into certain markets, as well as tariff concessions.
'Free-trade agreements are superhighways that connect Singapore to major economies and new markets,' says Mr Tan. For instance, the China FTA will mean that 85 per cent of Singapore exports will enjoy duty-free access to China in 2009.
And boosting activity - as well as Singapore's long-standing reputation as a hub for international trade - is IE Singapore's Global Trader Programme, which offers incentives for international trading companies here.
'This programme has anchored more than 230 international companies in Singapore, which generated more than US$465 billion in offshore trade in 2007, while total local business spending by GTP companies reached $7.8 billion,' says Mr Tan.
But more important than the strategies and incentive schemes is information. 'While economic growth in the developed countries will be slow or stagnant in the coming year, some of the emerging markets continue to hold good growth potential,' Mr Tan says.
So IE Singapore is helping local companies identify opportunities, and its efforts to strengthen business links with Latin America and Russia in particular have generated great interest.
'There is also significant room for our companies to grow in the Middle East and Africa, as these regions each account for less than 2 per cent of the total overseas revenue generated by the SI 100 companies last year,' says Mr Tan.
This article was first published in The Business Times on November 10, 2008.
