Singapore’s small and medium enterprises (SMEs) are expecting to lean heavily on government support in 2021 to weather the economic downturn caused by the COVID-19 pandemic, according to a survey by QBE Insurance.
The survey polled over 400 SME leaders during the fourth quarter of 2020. Half (50%) of businesses said they are looking to the government for relief measures amid the adverse economic climate. Seven in 10 of those stated a need for financial support in particular. Other areas of support identified were enterprise development programmes (37%) and general advice from the government (34%).
Only 3% of SMEs polled indicated that they did not need any support from the government.
Almost all (95%) SMEs said they were aware of government support measures, but only 61% have applied for these initiatives, indicating a gap between awareness and action, the report said.
Most SMEs are positive about the Singaporean economy, with 62% expecting the economic condition to remain the same or improve in the next 12 months. However, 81% of respondents said they do not expect their own business to grow, while 39% are expecting to cut down on staff numbers.
“Uncertainty amid a gradually recovering economy will continue to plague our business environment in 2021,” said Ronak Shah, CEO of QBE Insurance Singapore. “It is paramount that the government, businesses and individuals band together during this time to help one another out in overcoming the unique environment we operate and live in today.”
In such a trying environment, many SMEs have turned to digital technology to sustain their businesses. According to the survey, SMEs have upped their digitalisation during the pandemic, with an average of 66% of businesses processes now being conducted digitally. The pandemic has also led 68% of respondents to digitalise quicker than they had originally planned, while 91% are currently engaged in or showing willingness to invest further in technology.
On the flip side, around 40% of respondents were concerned about the high costs of investment and operation due to the lack of financial funds and staff with digital skills/expertise. According to QBE, with digitalisation efforts becoming a lifeline for businesses this year, it is likely that more SMEs will look to gain financial support around digital initiatives to help their conduct of business amid current business conditions. Meanwhile, 66% of businesses admitted to not having any cyber protection, which raises concern due to the increased reliance on digital technology in 2020.
“As businesses continue to navigate changing conditions, operate remotely and make adjustments to their operations, they need to be increasingly aware of the new threats and risks they face,” said Shah. “Only then can we ensure the longevity and survivability of our SMEs, and therefore our economy, in the long-term.”
