The Singapore authorities has been referred to as on to supply funding assist so giant enterprises can proceed with their digital transformation packages and smaller companies can start their sustainability journeys.
These measures are essential to safeguard the nation’s prosperity amid an more and more unsure international local weather, in accordance with a report launched by KPMG in Singapore (KPMG) and the Singapore Enterprise Federation (SBF).
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The doc outlines suggestions on what the federal government ought to embrace in its upcoming price range to keep up Singapore’s attraction as a vacation spot for international direct funding in gentle of rising competitors from different monetary hubs.
Deputy Prime Minister and Minister for Finance Lawrence Wong is scheduled to ship the nation’s fiscal 2024 price range plan on February 16.
The report means that advocating innovation, digitalization, and ESG (environmental, social, and company governance) will place Singapore in place to draw international capital and expertise. Organizations can even increase their competitiveness if they’re given assist to digitalize, decarbonize, and globalize.
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These measures will likely be integral to serving to enterprises, significantly small companies, cope with rising prices and a difficult enterprise surroundings in a softening international financial system.
Analysis suggests simply 25% of corporations in Singapore are assured the financial system will enhance throughout the subsequent 12 months, in comparison with 41% the 12 months earlier than, in accordance with SBF’s latest national business survey.
Some 58% of corporations cite elevated enterprise prices as the highest problem, with 75% pointing to manpower prices as the important thing contributor. The survey respondents would love extra assist from the federal government for his or her ESG initiatives, in addition to adoption of AI instruments and international enlargement.
The SBF survey, which polled 1,056 corporations, additionally anticipates 2024 being a more difficult 12 months for native companies that can face headwinds in home and worldwide markets.
“We advocate the federal government takes the result in streamline procurement practices with smaller enterprises which will rely closely on authorities tasks,” KPMG and SBF stated in a joint assertion.
“To deal with manpower constraints, Singapore should preserve its openness to abroad expertise and strengthen insurance policies that promote the event of native expertise. A public-private evaluate of enterprise competitiveness is required to determine alternatives for value mitigation whilst we press forward with trade transformation.”
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The report authors name for a tiered assist mannequin to facilitate corporations of their digitalization roadmaps, spanning from a lower-tier grant assist masking 20% of backoffice and operational digitalization initiatives, to a top-tier grant of 60% in funding assist for the adoption of artificial intelligence (AI) and digital ledger applied sciences.
The report additionally suggests the federal government ought to reassess current grants and subsidies, such because the Enterprise Innovation Scheme or Productiveness Options Grant, and permit smaller corporations to pay solely the online value of digital options to assist them with their money circulate. Companies suppliers can then declare the remainder of the subsidies straight from the federal government.
Grant packages, the report suggests, must be expanded to incorporate digital tasks the place growth work is led out of Singapore, however contain sources from the area. The Enterprise Growth Grant, for instance, at the moment stipulates that such growth work have to be fulfilled domestically. This restriction might stifle progress as companies won’t have the ability to entry sources and skillsets to drive the work in a well timed method.
As well as, a common grant program that covers the price of AI and machine studying adoption and worker upskilling will likely be useful for companies seeking to construct coaching datasets and perform knowledge evaluation and testing.
Smaller corporations may also admire assist in upskilling and retraining staff in rising applied sciences, together with AI, to amass the mandatory capabilities to deal with new cyber threats.
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Organizations would additional profit from reskilling that may assist their ESG growth journey, which the federal government can present via enhanced tax deductions for accredited coaching packages and tax subsidies.
The Singapore authorities can collaborate with sectoral companies and commerce associations to determine decarbonization trade roadmaps, with the purpose of facilitating organizations’ transition to a greener ecosystem.
As an example, the report recommends that the Enterprise Financing Scheme – Inexperienced initiative is expanded to spice up lending by eligible monetary establishments and assist smaller corporations start their sustainability journeys.
The report additionally requires the institution of data-sharing platforms to facilitate the change of ESG knowledge, resembling greenhouse fuel emissions related to sure actions. This course of will allow companies to hold out checks on inner knowledge or make estimates when info is just not out there.
Moreover, Singapore might look to calibrate its property tax insurance policies to supply decrease charges for green commercial and industrial buildings, which might encourage constructing homeowners to fulfill greener constructing necessities.