PRODUCTIVITY OF CONSTRUCTION SMES IN SINGAPORE: AN INSTITUTIONAL APPROACH TO UNDERSTANDING THE EFFECTIVENESS OF SINGAPORE GOVERNMENT'S SCHEMES

Abstract

In recent years, raising the level of productivity in Singapore has garnered greater focus. This is especially so for the construction industry as it is known to rank poorly in terms of productivity. As a result, more funds and manpower have been deployed by the government to raise the level of productivity in the industry. However, few studies have examined the responses from the “ground level”, especially among the SMEs which make up 99% of the enterprises in Singapore. This study aims to examine the responses of the construction SMEs towards the government’s push to raise the level of productivity, while also considering the various productivity enhancement schemes implemented by the government. The study seeks to understand the problems currently faced by SMEs, in addition to the possible hurdles or barriers they faced in implementing productivity measures. Furthermore, analysis of the data yields an opportunity to provide recommendations to the government to better assist construction SMEs. The research design was carried out in three phases with the SMEs to understand their views and a formal interview with a government agency conducted to better understand the government’s stand. The findings were then studied together with Scott’s (1995) institutional pillars to provide a structured manner of studying the responses to ensure a comprehensive evaluation of the results. The study found three main difficulties hindering construction SMEs: rising manpower costs, rising material costs and strong competition within the industry. In addition, this study also revealed three hurdles which appear to account for the great resistance to the government’s productivity enhancement schemes, namely, high expertise cost, risk adverse nature of the SMEs as well as SME’s general lack of trust in the government. Other factors were also identified and classified in this study along with explanations for these phenomena.