The Singapore Business Federation today unveiled the findings of its 2010/11 National Business Survey on the needs, concerns and issues faced by its members in growing their business. Conducted in Q4 2010, the findings indicate that overall, the sentiments of the business community about the Singapore economy in 2011 have improved significantly compared to 2010. The findings also include inputs from respondents on their inputs for Budget 2011. (Refer to Annex).
1. Business Opportunities and Challenges
Of the 1053 companies which responded to the survey:
80% are optimistic about Singapore's economic growth (vs 27% in 2010)
69% expect businesses to be profitable in 2011 (vs 39% in 2010)
51% of the respondents have investments plans (focusing mainly overseas) in 2011 (vs 37% in 2010)
However, despite these positive prospects, companies are still facing challenges pertaining to high labour costs and increasing competition in sales and other areas.
39% have experienced up to 10% increase in operating cost, while another 41% experienced an increase of more than 10% in 2010. Labour cost tops the list of cost components affecting companies' profits in the next 1-2 years.
Whilst companies have indicated they expect to hire more workers, the tightening labour market and the phased increment of the Foreign Workers Levy are expected to drive wages higher, affecting especially labour intensive industries such as manufacturing and services sectors. Increase in labour cost would lead to thinner profit margins for businesses. Hence heightened cost for products and services.
2. Business Strategies 2011
Given the projected operating environment in 2011, respondents have indicated that their business strategies in the new year will hinge on growth-related initiatives:
75% of respondents are looking at overseas expansion
61% aim to increase cost efficiency and productivity, with focus on investment in IT infrastructure and machinery & equipment
40% are considering introducing new product and services
3. SBF to help companies pursue sustainable growth
SBF, as the apex business chamber, will look into helping member companies in the following areas:
a. Overseas expansion/internationalisation
The Federation will step up its engagement of overseas markets through its six dedicated business groups (Middle East, Africa, ASEAN, South Asia, North Asia and Sustainable Development Business Group) for growth opportunities, including in new business areas such as sustainable development and urban solutions. In 2010, SBF led its members on 22 overseas missions to emerging and established markets to tap into trading and investment opportunities.
The Federation will also engage in more FTA outreach programmes to familiarise companies on the benefits and opportunities of tapping into Singapore's 18 FTAs. The survey findings indicate that four in 10 respondents have benefitted from FTAs, with the ASEAN Free Trade Area (48%) cited as being the most beneficial.
b. Increased cost efficiency and productivity
SBF will initiate programmes to help companies strengthen their competitive edge, and address their bottom line through automation and streamlining of business processes to optimise headcount. In this regard, SBF recently launched the Business Process Improvement Programme with Motorola University, as part of its partnership with the Workforce Development Agency's i3 Productivity Programme to help businesses increase efficiency.
c. Capacity building initiatives
SBF will also look into introducing more programmes to help companies raise their resilience and competitive edge. In partnership with SPRING Singapore, the SBF recently inaugurated the SBF Mentorship Programme and the SBF-Hay Group Human Capital Seminar Series aimed at grooming the next generation of SME leaders. In addition, given there is a growing trend in sustainable and green initiatives, SBF will expand on its Clean Technology Testbedding Community (CETC) to launch a course with Temasek Polytechnic to produce more Sustainable Development professionals.
In 2011, the business community will look forward to a budget to accelerate the pace of developing enterprise competitiveness through increasing productivity, internationalisation and capacity building. SBF will continue to deliver relevant programmes to serve the needs of its members, facilitate better coordination between public agencies and the business community, and help companies explore opportunities in new markets and areas of business.
Click here for the survey findings
Click here for SBF's recommendations
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