While larger businesses in Singapore are already leveraging on infocomm technologies (ICT) solutions to boost productivity, SMEs need to jump on the bandwagon in order to remain competitive.
This was one of the messages Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam delivered during his Budget speech last Friday.
“Budget 2014 will strengthen support for early adopters of new technologies, and for SMEs who are going beyond the norm in their upgrading efforts,” Shanmugaratnam said.
“We will also promote wider adoption of high-impact productivity solutions, beyond the early adopters to a larger group of firms in the industry. This will include a major effort to scale up the use of ICT by SMEs.”
[ALSO READ: What the 2014 Budget holds for employers]
In order to get more companies adopting ICT solutions for their business, Shanmugaratnam said the government will be putting in place three initiatives.
The first is to scale up proven ICT solutions, working with the IDA and trade associations to “extend the reach of these sector-specific proven solutions from the existing 500 SMEs to another 10,000 SMEs over the next three years”. He added these SMEs will also be offered 70% subsidies for the cost of ICT products and services.
“Second, we will encourage first movers, who can pilot emerging technology solutions that have the potential to transform businesses. These can, for example, include innovations in sensors, data analytics and robotics,” Shanmugaratnam said.
He added the government will support 80% of the qualifying costs for companies implementing innovative solutions, with funding capped at S$1million per participating firm.
Thirdly, the Singapore government will promote high-speed connectivity for SMEs, with the government subsidising “SMEs’ fibre broadband subscription plans of at least 100 mbps and providing support for them to implement Wireless@SG services at their premises”.
The government will also subsidise building owners for up to 80% of the costs of new in-building infrastructure, and this will be capped at S$200,000 per building.
Shanmugaratnam also introduced the PIC+ scheme, which is designed to help SMEs make more substantial investments to transform their business.
Under the current PIC scheme, which has also been extended by three years to expire YA2018, the expenditure cap is S$400,000 per year for each qualifying activity, capped at $1.2 million across three years.
With the new scheme, the cap has been raised to $600,000 from YA2015, meaning SMEs will now be able to claim tax deductions for up to S$1.8 million.
“Our schemes will still favour the more dynamic and efficient players. Any company that invests in order to save manpower or achieve innovative breakthroughs gets government support, as long as it has its own money in the game,” Shanmugaratnam said.