Supplementary Budget 2020 and COVID-19: How Are SMEs Benefiting from PSG?
Small and medium enterprises (SME) are the heart of Singapore’s economy as they employ two-thirds of our workforce, accounting for approximately half of Singapore’s GDP.
For these businesses to continue growing and sustaining, productivity is crucial in establishing services or products they offer are effective and efficient. With the increased digital productivity, businesses can also focus on acquiring and retaining new customers as well.
To ensure improved productivity, SMEs need to adopt technological solutions and introduce these innovations into their core business operations. These solutions make internal processes more efficient and productive and allow SMEs to remain competitive, relevant and explore new opportunities in new industry markets.
Introducing the Productivity Solutions Grant (PSG)
However, while undergoing digital transformation, SMEs can face major obstacles like insufficient business funding, lack of expertise and time. Due to size and resource constraints, it also takes a longer time for Singapore SMEs to scale up, and more importantly, expand their operations beyond the country’s borders – an essential component of any Singapore business’ long-term sustainability.
To combat this, the PSG was introduced and came into effect on 1 April 2018. It was established to encourage the adoption of digital productivity solutions among Singapore businesses.
The PSG combines three existing productivity schemes: Innovation and Capability Voucher, the Landscape Productivity Grant and the SME Go Digital Programme, into one channel. This enables Singapore SMEs to access a wider range of digital productivity solutions at once, which can then be used to scale and upgrade their business capabilities.
To qualify for the PSG, a company needs to be registered and operating in Singapore, and the solutions that are purchased, leased or subscribed must be used within Singapore. For selected solutions, the company needs to have 30% local shareholding.
How can SMEs benefit from the PSG
The PSG supports smaller Singapore businesses and SMEs by making funding and support more readily available to them, with support offered at detailed, specific levels that SMEs can pick and choose to upgrade their digital capabilities.
Offering support for sector-specific solutions, the Productivity Solutions Grant (PSG) covers industries like landscaping, construction, precision engineering, logistics, food, and retail. If your SME does not fall in any of the industries, there are technological solutions that cut across these industries – such as inventory tracking, financial management, data analytics, digital customer relationship management and human resource management systems.
These solutions have been pre-scoped by various government agencies such as Enterprise Singapore, National Environmental Agency (NEA) and Singapore Tourism Board (STB), so credibility is assured.
Enhancements to PSG for SMEs Amid COVID-19
To help SMEs address the urgent COVID-19 challenges, an IMDA-approved enhanced SMEs Go Digital Programme was announced during the The Supplementary Budget 2020 statement.
Introduced jointly with Enterprise Singapore (ESG), the programme includes:
- Expanding the scope and raising co-funding support for pre-approved solutions eligible for the Productivity Solutions Grant (PSG) to help businesses implement safe distancing and business continuity measures.
- Providing support for businesses to digitally transform by adopting advanced digital solutions in order to deepen digital capabilities and strengthen them for the eventual recovery.
Additionally, from 1 Apr 2020 to 31 Dec 2020, the maximum support level for PSG will be raised to 80% and businesses will receive more co-funding support for digitalisation, reducing the cash outlay required during this period.
The expanded suite of PSG-supported solutions will now cover:
- Online collaboration tools
- Virtual meeting and telephony tools
- Queue management systems, and
- Temperature screening solutions
The enhanced SMEs Go Digital Programme also encouraged the implementation of digital solutions for new enterprises and industry sectors like:
- Advanced security and facilities management systems for buildings. These solutions will help enterprises balance the need to minimise physical contact among staff with the increased demand for security, cleaning and maintenance. It will also help to integrate security, cleaning and maintenance for more seamless facilities management.
- Integrated Business-to-Business (B2B) systems to facilitate end-to-end transactions between buyers and sellers. These would help businesses transit from paper transactions to electronic transactions by covering inter-linked transactions such as e-procurement, e-invoicing, e-payments and inventory management.
Funding support can cover costs for hardware and software, infrastructure, connectivity, cybersecurity, integrations, development, enhancement and project management. It can also cover costs of replacing or expanding legacy systems and existing infrastructures.
For more information on the support for Capability Development:
Infographic Courtesy of Singapore Budget
In conclusion, by deepening the capabilities of SMEs, it will enable them to be more resilient to other economic disruptions and to be ready to capture opportunities when the economy recovers as well.
If you’re looking for a digital solution to raise the operational efficiency and productivity of your Singapore business, you’d be happy to know that we’re an IMDA-approved digital creative agency ourselves and we’re definitely confident in supporting your business needs for the best value at a subsidised rate. Simply drop us a message and we can have a chat!
