From the Singapore Budget 2024 to a New Prime Minister Appointment: Lessons from Singapore’s Dynamic Year

When the Singapore Budget 2024 wrapped up in February this year, UOB FinLab was eager to witness the budget’s plans coming to fruition. Since then, Singapore has had many exciting developments, the most notable being the May Day Rally and the appointment of a new Prime Minister, Lawrence Wong.

We believe that the goals and policies discussed during these events will have a significant impact on the growth of Singapore’s Small and Medium Enterprises (SMEs). Here are our top three takeaways from recent developments, as well as what SMEs can do to benefit from the Nation’s upcoming plans.

Scaling Singaporean SMEs for the Global Stage

The May Day Rally 2024 touched on several achievements made by NTUC U SME, a Labour Movement initiative that helps small and medium enterprises (SMEs) tackle critical business issues and challenges. The movement emphasises creating a culture of innovation and work enrichment among employees. We are aligned with their belief of “better workers, better workforce” because SME capabilities are contingent on their manpower skills, be it within the digital or sustainability space.

Moreover, enhanced talents within SMEs can collectively drive Singapore’s economic development. Over 90% of enterprises in Singapore are SMEs which drive over 70% of the Nation’s total employment. The Government understands the importance of SMEs and will set aside an additional S$150 million for the SME Co-Investment Fund to support SMEs in scaling up and being globally competitive.

While the grants are paramount to help SMEs kick-start initiatives such as implementing new technologies, UOB FinLab believes it is equally as important to empower SMEs with the knowledge to scale their businesses to new heights through digitalisation and sustainability best practices.

SMEs can gain this knowledge through mentorship and training sessions provided by UOB FinLab, as well as other networking opportunities that connect SMEs with relevant industry experts.

Sustainability is Collaborative

Singapore Budget 2024 marked a critical moment for Singaporean SMEs looking to transition towards green and sustainable practices with the launch of the enhanced Energy Efficiency Grant and the formation of a S$5 billion Future Energy Fund. This grant aims to address the budget constraints SMEs face when green transitioning with subsidies of up to 70% for pre-approved energy efficiency equipment costs, with a support cap of $30,000 per company.

From our interactions with SMEs, this signifies a huge milestone. One of the hurdles SMEs face when implementing a green transition is constant pressures regarding budget, time, and knowledge.

While the monetary stimulus is a step in the right direction to get SMEs started on their green journey, education and partnerships with large enterprises need to go hand-in-hand to ensure SMEs have a long-term understanding of how to best implement such initiatives and adapt to the ever-evolving sustainability standards.

UOB FinLab understands the importance of collaboration across industries and borders. This is why we established a vast ecosystem of government agencies, SMEs and key industry stakeholders across five markets in ASEAN – enabling our programme participants to gain access to knowledge, best practices, resources and new business prospects within our network.

To achieve this, UOB FinLab developed tailored programmes such as the GreenTech Accelerator to drive business growth and innovation for aspiring and existing greentechs, and the Sustainability Innovation Programme that supports SMEs across industries to transform and go green.

At the end of the day, sustainability is collaborative. Overcoming climate change challenges, driving decarbonisation efforts, and achieving the ultimate goal of net zero is not the sole responsibility of individual stakeholders – it is a collective effort across all industries and nations.

Advancing digital transformation through collaboration

The SG Budget 2024 announced an investment of more than $1 billion over 5 years into the National AI Strategy 2.0. Part of the investment will include securing access to advanced chips for AI development and deployment.

We saw how rapidly AI was adopted across industries in the past 12 months and we foresee greater adoption to continue into 2024. This would be critical for SMEs who wish are already, or planning to implement AI in their operations.

UOB FinLab understands that technology is ever evolving, and it is crucial for SMEs to understand how they can leverage new technologies for their businesses. Collaboration is crucial to unlock the full potential of AI, learn the best practices and tailor its benefits to each SMEs’ business.

This is why we have built a vast ecosystem of over 25,000 businesses for SMEs to acquire knowledge and learn from each other through workshops, mentoring sessions and networking opportunities. Although many use-cases of AI have been highlighted in the finance sector, such as automating fraud detection, risk assessment, forecasting, and many other areas, we believe it can be applied for optimal digitalisation across any industry.

Our recent Acceleration Programme for the Arts 2024, in partnership with the National Art Council in Singapore, is a testament to this. The Programme featured panel discussions, workshops and peer discussions that taught participants to deploy AI-powered content creation tools to optimise time for digital marketing in the industry.

UOB FinLab will continue to grow our ecosystem and work collaboratively with government agencies and industry leaders to catalyse business growth for SMEs in ASEAN through our digitalisation and sustainability programmes.

To learn more about UOB FinLab programmes, click here.