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."

“We are therefore taking a ‘middle’ strategy. We are gradually tightening the rules on foreign worker supply - we have...
Posted by Ministry of Finance (Singapore) on Saturday, September 26, 2015