Heartland businesses must innovate to stay relevant: Tharman

By Marissa Lee, The Straits Times, 26 Sep 2015

Heartland businesses are a key thread in Singapore's social fabric but they have to do more if they are to remain at the heart of the future economy, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam yesterday.

Speaking at the Singapore Heartland Enterprise Star awards, he said: "In order to make sure that heartland enterprises are part of our future, we have to make sure that they are able to innovate and survive."

And small businesses must be a source of innovation as Singapore presses forth with its "restructuring journey", he added.

"We must focus more on real innovations, not just simple solutions such as purchases of basic IT devices like laptops and other devices," he said at the event, which was held at the Shangri-La Hotel.

The annual event was organised by the Federation of Merchants' Associations Singapore and the Lianhe Wanbao daily.

Mr Tharman also urged leaders of small businesses to focus more on developing the labour force.

"That is our most important objective - to enable everyone to discover their potential and feel fulfilled. It is only by developing our people in each enterprise that we can get get real value from our investments."

He also singled out a few of the winners of this year's awards for their innovative approaches to traditional businesses. Mr Tharman cited incense and candle company Lijay Tradings, which was named the most innovative firm after growing its sales by creating fruit-shaped incense products to attract younger customers.

Herbal hair treatment firm Bee Choo Origin was also lauded by Mr Tharman as an "old economy" business that has gone global.

"Madam Cheah Bee Chew started the business 15 years ago at home in Pasir Ris, with one steamer," said Mr Tharman. The firm now has six outlets and sells hair products in 10 countries after securing international certification to improve its management system. It also tapped on a government grant to fund a project to reduce customers' waiting times.

The Government will help firms which genuinely want to innovate by stepping up "targeted help" for them, instead of using a "broad-based" approach, Mr Tharman said.

But he also urged firms not to abuse initiatives, such as the Productivity and Innovation Credit (PIC) scheme, which are meant to help companies increase productivity through new technology and innovation.

He said there was a "surge" in the formation of sole proprietorships and partnerships last year as many firms sought to take advantage of the PIC scheme, as well as cases of businesses sharing employees for the purpose of claiming PIC cash payouts.

Mr Tharman said: "We will continue to review our schemes to ensure that they are easily readily accessible by businesses, no matter how small. But we will also want to make sure that our schemes are not for those seeking to take advantage of government support without really upgrading business methods."

Source: The Straits Times © Singapore Press Holdings.

Photo: The Straits Times © Singapore Press Holdings.

Advice to SMEs: Embrace technology

By Ariel Lim, The Straits Times, 23 May 2015

Small and medium-sized enterprises (SMEs) must innovate to improve their operations and adjust to changing market conditions, said the Minister of State for Trade and Industry yesterday.

Mr Teo Ser Luck told Spring Singapore's inaugural SME Capabilities Forum that technology could help SMEs become more productive.

And small businesses must be a source of innovation as Singapore presses forth with its "restructuring journey", he added.

He cited fish products manufacturer Ha Li Fa, which increased output by more than 50 per cent after automating its production line and adopting an integrated inventory tracking system.

He added that technology could help SMEs market to customers digitally, but pointed out that they should also be innovative in their business models to adjust to changing market conditions.

Other speakers echoed Mr Teo's views.

Professor Serguei Netessine, The Timken Chaired Professor of Global Technology and Innovation at business school Insead and research director of the Insead-Wharton Alliance, advised SMEs to "start thinking about changing your business model or your competitors will change it for you".

Panellist Winnie Chan, general manager at bookbinding company Grandluxe, spoke about her firm's experience.

She said Grandluxe, which produces stationery, had been perceived as a "bookshop brand", which was not good as "bookshops are closing".

Last year, she started Bynd Artisan, a brand that allows customers to have stationery customised on the spot.

Ms Chan noted that the company's revenue had increased by 12 per cent since the introduction of the brand.

Yesterday's event also featured the introduction of five new projects under Spring Singapore's Collaborative Industry Projects (CIP) initiative, which develops solutions to help SMEs improve productivity.

Three projects, developed in collaboration with the Agency for Science, Technology and Research (A*Star), help SMEs adopt radio frequency identification (RFID) and image recognition technologies. The remaining two focus on information technology and digital marketing.

Dynamics Circuit, which repairs electronics and other equipment, participated in the CIP initiative last year and adopted an automated inventory tracking system using RFID technology.

Sales and service manager Kannan Rajahgopal told The Straits Times that the system raised productivity by 25 per cent to 35 per cent, leading to a 5 per cent to 7 per cent rise in revenue.

The company previously relied on administrative staff to track inventory manually.

Mr Rajahgopal said the system allowed them to focus on other tasks and prevented items from going missing.

Source: AsiaOne © Singapore Press Holdings.

Photo: BT File Photo