In his Budget speech, Deputy Prime Minister and Finance Minister Lawrence Wong spoke about levelling up our SMEs to meet the requirement of multinational enterprises (MNEs) operating in Singapore.
He cited the example of Zincode Technologies, a local SME that secured the contract to develop an optical inspection system for Rolls-Royce’s fan blade manufacturing facility in Singapore and has since gone on to capture new opportunities from other companies in the aerospace sector.
Why can’t SMEs level up on their own to pitch and supply to MNCs based in Singapore? The reality is that leaving it to market forces alone may not be enough for the courtships between MNEs and local SMEs to flourish.
MNEs based in Singapore have global partnerships and come with a pool of trusted suppliers already in tow. Working with a new set of local SME suppliers may require some coaxing and demonstration of capability.
On the part of local SMEs, the capability gaps they need to close to meet the requirements of MNEs may be large and require significant capital investments.
SMEs will ask themselves if they can recoup those investments, for example, through collaborations with other potential MNEs.
This is where a scheme like PACT comes in.
Enabling SMEs to go digital
There are positive examples of successful MNE-SME collaborations that give SMEs an easy arrowhead into high-growth areas and hook their sails onto innovative MNCs.
In the digital space, Google and Enterprise Singapore jointly introduced the Digital Practitioner Programme in May 2023, to help SMEs develop digital capabilities.
Through a two-month training programme and a three- to six-month practicum with dedicated Google specialists, SMEs can enrol their employees in courses to develop skills in areas such as information technology support, project management, data analytics, user experience design, and digital marketing that help them set up online stores and grow new sales channels.
As tech players roll out more AI-powered solutions targeting SMEs, a PACT programme that leverages the network, expertise and solutions of the big tech companies to diffuse these technologies through a series of workshops, on-site development, and training to develop operational use-cases will accelerate adoption of artificial intelligence among SMEs, which will in turn benefit the tech players providing these solutions.
Decarbonising supply chains
Sustainability is another area of great opportunity for MNE-SME collaboration, as Singapore presses towards net zero emissions by 2050. But decarbonisation of the economy is not only an urgent imperative, but also a business opportunity.
Schneider Electric introduced its SME Kickstarter Programme in 2022, which mentors and guides SMEs in developing their decarbonisation road maps.
Under the programme, Schneider Electric provides a one-stop shop for SMEs to grow a pipeline of skilled talent in areas like carbon emissions tracking and knowledge in decarbonisation and efficient energy usage.
SMEs can also adopt Schneider Electric’s digital solutions such as its cloud-based platform for energy management to support their sustainability journeys.
Practical experience working with MNCs can help level up talent in SMEs and aid them in seizing new opportunities in the growing global green economy.
A PACT programme that provides wage support for sustainability experts hired by a major purchaser to work through their supply chain to track, measure and manage their carbon footprint will complement this initiative.
