The media landscape is not a pretty place. Whether we read, hear or see something in the media, invariably some gloom and doom news awaits us, the subject matter ranging from wars, natural disasters, sanctions, and, of course, shaky or volatile business climates.
Fortunately, there are bright spots in the global economy. For example, out of the mature G7 economies, Germany, the United Kingdom and the United States still lead the world in growth. And for the more adventurous businesses, Ethiopia, Uzbekistan, Nepal and India beckon.
On September 5, 2017, Singapore announced that two prominent government agencies, International Enterprise Singapore (IE Singapore), and SPRING Singapore, will merge into a new agency, Enterprise Singapore, by 2018, to help Singaporean companies grow and go global.
The two agencies bring formidable expertise – IE Singapore helps Singapore companies go global and SPRING Singapore helps companies develop their capabilities. The marriage is ideal, especially since Singapore is a prime regional hub for business and an excellent springboard for ambitious Singapore companies aiming to grow beyond its shores.
Small and medium businesses (SMBs) would especially benefit from this merger. After all, 80% of companies that have gone global were SMBs.
While Singapore remains an excellent incubation center, the hunger for larger markets, such as the Americas and Europe, means that SMBs must become more capable in order to thrive in these fiercely competitive mature economies
While Singapore remains an excellent incubation center, the hunger for larger markets, such as the Americas and Europe, means that SMBs must become more capable in order to thrive in these fiercely competitive mature economies, which are unforgiving in many respects, including regulatory compliance, technology, investments, human capital, marketing and branding. It is akin to a budding musician playing before a small audience in a lounge and then suddenly performing before 10,000 sophisticated music aficionados in a stadium. The quantum leap is no easy feat for SMEs.
Singapore SMBs can expand globally by setting up shop in foreign lands, leasing office or factory spaces, recruiting people, and growing organically. Or they can “marry” through mergers and acquisitions (M&As), and have an instant footprint in the countries to which they expand. Both methods present challenges and opportunities.
In the case of M&As, having transparency in the deals become paramount, as liabilities may not just be financial but infrastructural as well. For example, should a Singapore SMB merge with another entity, would their IT systems, from operating systems, business applications, data formats, and even mobile apps, be compatible and could they eventually be merged into a singular system? What kind of further investments are needed for such convergence?
Data privacy and security are also important issues to consider when expanding overseas, especially in Europe. The impending General Data Protection Regulation (GDPR), which will supersede the Data Protection Directive, will start in May 2018 in Europe. For example, a Singapore SMB merging with a European counterpart selling to consumer markets would have to ensure that its software and platforms protect the privacy and data of consumers, or face punitive measures. Therefore, Singapore SMBs need to be prepared to investigate and implement holistic software audits and tweaks for such compliance. A good starting point would be the ISO/IEC 27001 Information Security management from the International Organization for Standardization (ISO).
While human capital is a critical component for any business, it will be exceptionally trying for small and large businesses alike. There are many pitfalls, especially in mature economies. The labor regulations are intricate and complex, and Singapore SMBs must have deep expertise before setting foot in these lands so that they can quickly plant their roots there with little hassle. On September 6, IE Singapore unveiled the Wholesale Trade Industry Transformation Map (ITM), which the agency hopes will help the trading sector in Singapore to expand globally, with a focus on digitalization and skills development. The trading sector, according to an IE Singapore news release, contributed S$47.3 billion (12%) to Singapore’s GDP in 2016. Singapore businesses should document their best practices, using approaches such as the ISO 9001 for Quality Management, and the ISO 14001 for Environmental Management. Once documented, these documents can be shared with foreign employees and business units to ensure a shared vision and effective field action.
In competitive and mature economies, marketing and branding cannot be ignored. While it is possible for some businesses to survive without marketing or branding in Singapore, it is virtually impossible to gain a serious foothold unless investments in strategic marketing and branding are made in mature economies. Branding is an area that Singapore SMBs need to put extra care in. For example, the naming of a company, its brands and products need to be unique and can be trademarked. For example, generic dictionary words are not advisable. Learn from the meteoric stars in today’s digital world, and you can find many good naming examples.
Another related area in intellectual property is copyright. Singapore SMBs need to engage adequate IP counsel for copyrights and trademarks before they expand overseas – and these costs can be significant but necessary.
It is natural for Singapore SMBs to want to spread their wings and venture overseas. Many have done it, with varying degrees of success. It is now an even better time for Singapore businesses, as the concerted machinery of the government would be extra fuel for going the distance.