SMEs in Singapore
What is SME?
In business, SME is commonly known as Small to Medium Enterprise where this category of enterprise makes up the majority of business in many nations. According to Wikipedia, SME describes business whose personnel numbers fall below certain limits. Yet, the definition of SME varies in different countries, depending on the country, the size of enterprises that usually consists of (turnover and number of employee parameters, annual sales, assets and so on).
Singaporean’s Definition of SMEs
SMEs in Singapore was previously defined as enterprises with fixed asset investments of $15 million and below for those in manufacturing, and employment size of 200 and below for non-manufacturing enterprises. With effect from 1 April 2011, the new parameters have set the definition of SMEs as businesses with annual sales turnover of not more than $100 million or employing no more than 200 staff. The new definition allows business to be eligible for more support, regardless of their fixed assets. On top of that, the change is also in line with international benchmarks in Asia-Pacific and Europe.
The Role of SMEs in Singapore
To date, SMEs are the backbones of Singapore’s economy where they account for 99% of the country’s enterprises. SMEs continue to support the growth of Singaporean economy with its significant contribution to GDP – SMEs contribute nearly half the GDP in Singapore. The successful part of this type of enterprises in the development of Singapore’s future is that it has created a vast amount of job opportunities for Singaporeans.
In fact, the key factor that drives the success of fast-growing innovative SMEs lies in their strategic flexibility and ability to adapt. In SMEs, governance is usually done by one or two people who could have a very close relationship with customers, know the operations well, and understood the business environment. As such, the ability to evolve rapidly allows SMEs to grow and respond quickly to current trends in the marketplace. Furthermore, the flexible nature allows SMEs to make the necessary transitions that respond to their competitive positioning.
On a Final Note
The SMEs are the lifeblood of the Singaporean economy. The Singaporean government has mapped out strategies and measurements to promote SMEs as well as to aid the growth of SMEs in the country. Measurements like tax exemptions, company with a home-based office and so on have indeed encouraged the registration of SMEs and the rapidly growing start-ups in the country.