TRANSFORMATION OF SINGAPORE: IMPACTS ON SMES - AN ANALYSIS OF THE INFRASTRUCTURE AND PLANNING TARGETED AT LOW-TECH SMES

Abstract

Identified as one of the major components in the backbone of the economy of Singapore, small and medium enterprises (SMEs) are receiving a lot of attention from the government. As the country strategizes to prepare itself for the 21st century, newly revised schemes are being introduced to help SMEs. SMEs are being split into appropriate classification hence more industries will be able to benefit from the various government grants and subsides that are available for the public. With over 170,000 SMEs in Singapore, about 70% of the population is working in a SME and a staggering 99% of the enterprises in Singapore are SMEs. However, these SMEs only contribute to about 50% of Singapore's GDP. As Singapore progresses towards to a knowledge base economy (KBE) one has to wonder how are the authorities really valuing the SMEs, as the statistics above show an anomaly. As the affluence level of Singaporeans increases, we begin to see many old industries closing down as the younger generations are drawn towards the multinational corporations (MNCs). With the ability to contribute significantly to the Singapore’s economy and the ability to provide a variety of job prospects and welfare for the employees, it is no wonder MNCs are more attractive to the younger generations now. Government understands that the SMEs are important to the local economy and in a recent analysis; it shows that there is an increase in the importance of SMEs in export oriented industrialization and the drive for increased international competitiveness. In this paper, we will explore the impacts on the SMEs as Singapore transits towards a KBE. This paper hypothesize that the medium-low tech industries within the SMEs are being left out. The government is making use of a one-size-fit-all strategy in the new SME master plan, SME21, which is largely beneficial to the medium to high tech industries. The dissertation hopes to reveal some of the weaknesses that are present in the new infrastructures and policies for the medium to low-tech industries. A series of studies on the Master Planning of Singapore will focus on the architectural aspect rather than the policy side of this transition. Essentially, this dissertation wishes to explore how well these SMEs are coping with the new environment in respect to the infrastructures and policies made.