by Clement Teo with Ng Zhi Ying

The government of Singapore has released its 2014 budget, which includes S$500 million (US$400 million) to help drive economic changes at small and medium-size businesses (SMBs). This spending will focus on:

  • Emerging technologies to transform SMBs. Over the next three years, the government will subsidize 80% of the qualifying costs of deploying technology solutions that use sensors, data analytics, and robotics to transform the way an SMB does business, up to S$1 million (US$800,000) per company.
  • High-impact productivity solutions. SMBs that adopt proven ICT-based productivity solutions for their industry sector will also receive a subsidy of 70% of the qualifying costs.
  • High-speed wired and wireless connectivity. SMBs that adopt cloud computing and data analytics solutions will receive a subsidy for half of their monthly fiber subscription costs and get support to set up and leverage mobile wireless services. Business owners whose buildings are not already equipped with fiber broadband infrastructure will receive subsidies of up to S$200,000 (US$160,000) per building to wire up new in-building fiber facilities.

What It Means

SMBs have been Singapore’s technology laggards. The government is serious about upgrading these companies to mobile and digital platforms that will help them raise productivity and embrace new opportunities. Given the country’s dearth of physical resources and an open economy that has seen business costs escalate in the past few years, harnessing technology smartly will ensure Singapore’s long term survival. However, before jumping into the fray, SMBs should:

  • Start consuming SaaSSMBs may have used SaaS such as email and CRM, but many others are not ready for cloud services. Even larger firms are fence-sitters when it came to adopting emerging tech. Systems integrators and resellers need to step up and help get SMBs started, and the government needs to consider setting aside training funds for upgrading skill sets.
  • Recognize that emerging technologies still require valid business cases. While upgrading SMBs’ technology capabilities is a laudable goal, adopting new technology for its own sake is fruitless. SMBs still need to decide how new technology will help them drive business growth; without a valid business case, the government will waste its effort (and money) and SMBs will end up disappointed. One approach on how to get started could be found in creating ‘mobile moments’.
  • Ask for clear definitions of industry sector productivity. SMBs and the government need clear definitions of “productivity” in different industry sectors and concrete metrics by which to evaluate it. Without clear guidelines, both parties will chase misaligned objectives and end up with mismatched productivity targets — culminating in another fruitless effort.

Vendors jostling for a slice of the US$400 million in technology spending must look past their own agendas to help SMBs achieve the desired business outcomes. One litmus test of their sincerity would be co-investing in these technologies to attain the stated goals; they could, for instance, lower the cost of acquiring software licenses. Having significant skin in the game will motivate tech vendors to ensure that the government’s push for new technology adoption and higher SMB productivity aligns with their own success. This would be a win for everyone.